Deglobalisation - and what it means for global brands and marketers

What’s happening?

Speaking in a BBC interview recently, Jim O’Neill, the former chairman of Goldman Sachs, declared: “We’re seeing the end of globalisation. We’re seeing countries become more insular, we’re seeing countries become more focused on their own domestic issues.”

Meanwhile Mintel announced ‘international localism’ as one of the key trends that will affect consumer behaviour over the next 5 years and beyond. The research firm predicts that people around the world will increasingly reconnect with what is ‘local’ to them. This is supported by evidence from Kantar that found that nearly two-thirds (65%) of consumers now prefer to buy goods and services from their own country.

How did we get here? Following years of hyper-globalisation, standardisation and international coordination, geo-economic uncertainties (e.g. the illegal invasion of Ukraine, Brexit), supply chain pressures and lastly the global pandemic have upended established interdependence and integration between countries – and people alike.

In short, we’re entering a period where borders, physical or mental, matter again.

A deglobalising world in which geography and geo-cultural factors on the one hand strengthen the sense of community and identity. On the other hand, they are creating a multipolar landscape with widening gaps, new barriers and stronger contrast between nations, their people and beliefs.

Why should I pay attention to this? 

For global brand marketers this fragmentation will have a significant impact on their advertising strategies:

  • Changes in consumer behaviour: In disruptive times, consumers tend to prioritise products and services of a local origin or theme. Why? They offer familiarity and reassurance by aligning with local identity and cultural norms. Often local brands demonstrate how they benefit the local community and environment.
  • Economic uncertainty: Deglobalisation can create economic uncertainty, which may affect consumer spending patterns, varying on a market by market basis. Consumers may be more cautious with their spending. Leading them to evaluate purchases differently, depending on emotional or functional factors that are unique to their geo-cultural conditions.
  • Shifting competitive landscape: As deglobalisation reduces the dominance of global brands in certain markets, local brands may emerge as strong competitors. Resetting the power play in those markets, forcing global brands to rethink their local strategies towards differentiation and distinctiveness that allow them to build stronger connections with consumers in specific regions.
  • New Regulations: Deglobalisation will likely lead to the introduction of new regulations or changes in existing regulations that affect how global brands can advertise their products and services. For example, new restrictions emerging locally, without international coordination, might affect what a brand can or can’t say in their advertising executions.

What can I do about it?

To stay competitive as a global player in a world that embraces ‘localism’, little steps can go a long way:

  • Don’t get stuck in the old ways: Instead keep monitoring the international playing field. Map market developments and establish commonalities or differences. Identify where synergies (and efficiencies) can still be achieved or where a hyperlocal strategy is required.
  • Be in tune with local culture: While this sounds like common sense, it is easy to miss nuances in international markets from a faraway boardroom. Global brands that not only empathise with what’s going on locally but embrace local pride will find it easier to build community connections. And adding a hyperlocal lens to creative work. 
  • Powerfully global, distinctively local: Modify advertising creative to emphasise the brand’s local connections or to highlight the local aspects of products and services. All while leveraging the media and brand power of a global organisation that local competitors can’t compete with.
  • Set yourself up for a world where collaboration with field marketing is key: Embrace the national marketing unit’s expertise and extensive experience with the local consumer. Instead of rigid governance from a helicopter perspective, embrace the role of a facilitator. Allowing for autonomy where needed and support with best practices as well as universally valuable marketing programmes that can be localised.
  • Plan for both, volume and modularity: The more markets drift away from each other, the more brands will need to cater for unique needs. This will likely lead to the requirement for more localised assets that can be deployed in the markets. Either by originating market-specific creative which will require a creative operations setup that can manage high volumes of assets. Or by adopting a smart modular adaptation approach where creative is planned with multi-market deployment in mind. Meaning only specific elements are adapted to market requirements while the core idea and ‘creative template’ are universally relevant and thereby can be retained for all markets.

Who is doing it well?

A company that has always embraced a balance between standardisation in a global brand and cultural awareness is McDonald’s. While trade barriers and supply chains will surely cause headaches at McDonald’s headquarters, their marketing teams should be in safe waters.

  • Menu adaptation: The brand with the two arches has always adapted their menu offerings to suit local tastes and preferences. In Malaysia for example the household staple of ‘Nasi Lemak’, a rice dish with local condiments like sambal, has been on the menu for a long time. Offering familiarity on a menu with the typical McDonald’s standards.
  • Marketing approach: McDonald’s adjusts its marketing approach to align with the local culture and values. For example, in China, McDonald’s has focused on highlighting the quality and safety of its ingredients, as concerns about food safety are top of mind for Chinese consumers.
    In Malaysia the brand has been embracing the nickname people gave the brand: Mekdi. Showing appreciation for the love that people have for the brand. Promotions are closely tied to local cultural moments. Community connection is fostered through partnerships with charities that give back to local communities.
  • Restaurant design: McDonald’s also tailors its restaurant design to reflect local tastes and preferences. In Japan, for example, McDonald’s has created restaurants with a more upscale feel, featuring lounges with comfortable seating and free Wi-Fi to appeal to the local culture of spending time in cafes.

Overall, McDonald’s localisation strategy has helped the company to establish a strong global brand while also appealing to the unique tastes and preferences of local consumers in each market it operates in.

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