What Does the Growth of Megacities Mean for Global Brands?

Originally written for the Guardian Media Network MAA Partner Zone.

Megacities are the largest metropolitan complexes in the world, each containing more than 10 million people. They are hubs of consumerism, urban development and economic growth. Megacities open doorways to wider markets and provide a testing ground for new campaigns. Marketing has become increasingly important within megacities to provide people with a sense of place and wellbeing which is often lost in city life. Megacities aren’t showing any signs of slowing down either. If you’re looking to expand your brand into new markets, it’s wise to consider a megacity marketing strategy.

Follow Adidas’ lead

It’s not surprising that global brands such as Adidas have begun to focus their marketing efforts geographically on megacities around the world that “play a crucial role in determining consumer trends”. They will pay particular attention to: Los Angeles, New York, London, Paris, Shanghai and Tokyo.

Megacities are, “the ‘halo’ locations where the perceptions of brands will be shaped. From there, they will spread to the rest of the world,” said Mr Hainer (Adidas). “Our business in London today is bigger than our business in Finland. If we win running in London, we will win running in the UK,”

The facts & figures

The rise of the megacity is striking: 65 years ago, just Tokyo and New York fell into this category, joined by Mexico City in 1975. By 2010 megacities combined population grew to 460 million people, equal to 6.7 percent of the entire global population. What’s remarkable is that together megacities had a gross domestic product of 14.6 percent, substantially above what you’d expect from their population.

The number of megacities has rapidly increased and now there are 29 in total, accounting for 7.2 percent of humanity. All except eight are located in the developing world. The largest by far at 37.6 million inhabitants is Tokyo, followed by Jakarta (30m), Delhi (24.1m) and Seoul (23m). Shockingly some megacities are not that well known in the West, at least among the general public, including Guangzhou which counts 18.3m inhabitants.

The expansion doesn’t stop there

Guangzhou plans to merge with nine cities including Shenzhen to create a city 26 times larger than Greater London. A staggering £190 billion will be spent on merging transport, energy, water and telecommunications to develop an infrastructure to facilitate this growth.

By 2020, it is predicted that there will be 37 megacities across the world. These areas will account for 14.6 percent of global GDP, but will also consume a disproportionate share of the world’s resources. (London being the exception to the rule here as electricity consumption is decreasing whilst GDP increases.) According to forecasts the number of megacities is only set to increase further with approximately six more in two decades’ time.

Aviation megacities are soaring

According to an Airbus official, the world’s leading commercial aircraft manufacturer, there will be a total of 91 aviation megacities in the world by 2033, accounting for 2.2 million daily long-haul passengers traffic to, from and via these super hubs. Economic contribution of aviation megacities is set to increase to 35 percent of the world’s GDP in 2033, up from 22 percent recorded in 2013.

So, how should you market to megacities?

The growth of megacities will continue to drive both economic and political dynamics globally. Understanding megacity dynamics will help you tailor your marketing plan for results you can measure. But how should you begin to target megacities?

1. Look at megacities as launch pads to help you spring in to secondary cities. Megacities are the ideal places to build brand buzz and to take the lead for wider promotion. They are important sites to test propositions with different consumer groups in a tight and nimble way such as pop up retail and restaurant offers. They allow you the opportunity to build relationships and develop an understanding with consumers, channels, retailers and media networks.

2. Turn towards localisation, personalisation and a handmade aesthetic to avoid consumers in megacities feeling disconnected.

Learn from Coca Cola’s #shareacoke campaign when you could purchase drinks with your name on the bottle, and the pre-digital designs of Graze snack boxes delivered conveniently straight to your door. Micro target your audience in multilingual, culturally adapted campaigns for key consumer groups to capture their spend.

3. Shift your marketing from one of shouting about how great your brand is to one of listening and providing helpful customer service across all platforms.

Great after care will become vital in megacity markets. In 2012 47% of customers looked for help and assistance on social channels. If you can tweet a solution to a customer complaint within 2 hours the likelihood of them recommending you to a friend increases, dramatically.

Megacity marketing – A brief summary

So, here’s the breakdown:

  • Focus on megacities for insights into wider national markets
  • Use megacities to build brand buzz and leadership for wider promotion in secondary cities
  • Create personalised, transcreated marketing campaigns to humanise your global brand
  • Megacities are increasing rapidly – listen to this audience, answer their problems and you’ll see increased ROI
  • If you have any other megacity marketing tips, please add them to the comments below.

 

 

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