Made to order





A report from The Economist Intelligence Unit

Made to order

Customisation advances in emerging markets

Commissioned by

Made to order

Customisation advances in emerging markets


1. Executive summary 4

2. Great expectations 8

3. Are supply chains up for the challenge? 14

4. Scaling the barriers 18

5. Conclusion: An opportunity waiting to be taken 22

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Customisation advances in emerging markets



The rise of the sophisticated consumer is by

now a familiar story in emerging markets.

Technology-savvy and in possession of increasing

disposable income, middle-class citizens of

fast-developing countries in Asia, Latin

America, the Middle East and Africa are proving

to be discerning and demanding customers.

Emerging markets are just as ready to embrace

high levels of product and service customisation

as those in the more mature markets of North

America and Europe.

In its various forms customisation has been

practiced for many years, even centuries, in many

parts of the world. The rapid growth of digital

technologies, however – especially the Internet

and mobile devices – along with rising wealth

levels have made these options widely available

to consumers and producers in emerging as well

as developed markets.

Companies from emerging markets are just as

focused as their rich-world peers on meeting

customisation demand. Their ability to do so

relies on highly adaptive and flexible supply

chains. The demands placed upon manufacturing

facilities, supplier and distributor networks,

logistics, financing and payment systems, and data

Defining our terms

Customisation defies easy definition. For the purposes of this report, we understand the term

to encompass different degrees of product and service tailoring. At one end of the spectrum is

personalisation, which involves the tailoring of products or services to the needs of individual

customers. It occurs, for example, when customers add a monogram to a pair of jeans or a softdrink

bottle, design their own mobile phone cases or configure the components of a new car.

At the other end is mass customisation – tailoring products to fit the needs of specific groups

or segments of customers. The use of flexible manufacturing techniques enables customisation

at mass scale, thus retaining many of the benefits of mass production. Examples include the

selection of hard drives or screens of different sizes when ordering a laptop computer online, or

of different collar or cuff types when a purchasing a shirt.

When appearing alone in this report, customisation is used as an umbrella term referring to all

its forms, including mass customisation and personalisation.

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Customisation advances in emerging markets

capabilities can be formidable – especially when

the supply chain extends across emerging markets.

This report finds that companies’ emergingmarket

supply chains are currently in a low state

of readiness to support customisation strategies.

Good intentions aside, only a small handful of

companies in the survey are taking concrete

steps to implement customisation strategies.

These include making more features of their

top-selling products customisable, and placing

such initiatives at the centre of their sales

growth strategies.

Companies acting slowly may be missing a

trick. Being a first mover can entail risk, but

firms taking the lead expect to be able to earn

a substantial premium (of 30% or more) over

their standard product pricing. This window

of opportunity may eventually close when

customisation competition tightens. The

sooner companies address their supply-chain

challenges when it comes to pursuing

a customisation strategy, the better.

Other key findings from the research include

the following:

• The global structure of customisation

demand is shifting. Most executives, even

those based as far away as Brazil, China and

Japan, see demand for personalisation of

goods and services to be highest in North

America. That may change within three years,

however, with markets in Asia overtaking

North America in personalisation demand,

and remaining ahead of Europe. Respondents

currently see East Asia as the global hotbed of

mass-customisation demand; expect South-

East Asia to join it in three years.

• Supply-chain proximity to core markets

will be a key advantage. Each country’s

respondents view their own regional

and country markets as more ripe for

customisation than any other. Experts

interviewed for the study believe that in

some Asian countries, local companies

have a better ability than multinationals to

meet customisation demand close to home.

Emerging-market players should then have

an advantage over overseas rivals if they

invest in upgrading their local supply chains

accordingly. Logistics costs are often lower,

for example, when production facilities

are located closer to end-customers and

suppliers are nearby. Delivery issues are

also more easily ironed out when suppliers

and distributors are located in the same

country or region.

• But difficult supply-chain challenges remain

to be addressed. Relatively few companies

believe the supply-chain components are

currently in place in emerging markets to

support any form of customisation strategy.

All key areas of the supply chain are in need

of substantial improvement; the toughest

are proving to be companies’ data collection

and analytics capabilities, their CRM systems,

payments systems and supply-chain financing.

• Upgrading data capabilities is missioncritical.

Generating better insight into

customer demand is the most urgent supplychain

challenge facing companies looking to

pursue customisation in emerging markets.

Effective customisation strategies cannot

be executed without solid customer data,

insightful analysis and good customerfeedback


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Customisation advances in emerging markets

• New financing strategies are needed to

support customisation. Limited sources of

short- and long-term financing – perennial

challenges in most emerging markets – will

hamper companies’ efforts to upgrade their

supply chains. Working capital shortages are

a particular problem, and the need to ensure

more frequent payments to suppliers will

add to financing complexity. Seven-in-ten

respondents (more in China and South-East

Asia) agree that customisation requires

new approaches to supply-chain financing.

Greater long-term capital investment will

also be required to upgrade manufacturing

plant, data capabilities and customer

payment systems.

The purposes of this study are threefold: to compare

the prospects for growth of mass customisation

and personalisation in emerging and developed

markets; to assess the capabilities of companies’

supply chains to implement such strategies; and

to identify the main challenges that need to be

addressed to carry out these strategies.

To achieve this, The Economist Intelligence Unit

(EIU) surveyed 525 executives from 14 countries

in Asia Pacific, Europe, North America and Latin

America. We have also held in-depth discussions

with senior managers at companies who are

pursuing different versions of customisation in

emerging markets, as well as with academics and

consultants closely following these developments.

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Customisation advances in emerging markets

About the study

Made to order: Customisation advances in

emerging markets is an EIU report, sponsored

by Standard Chartered. It is part of the Growth

Crossings series which examines emergingmarket

supply chains. The report assesses the

potential for product and service customisation

in emerging markets, and the readiness of

supply chains to support such strategies.

The report draws on two strands of research

for its findings:

• In December 2015 The EIU surveyed 525

business leaders in 14 countries: eight from

the emerging world (accounting for 57% of

respondents) and six from the developed

world (accounting for 43%). Over half those

taking part (57%) hail from Asia, while 14%

are based in each of Europe, the US and Brazil.

The sample is senior, with 50% of respondents

holding C-level or board positions and the rest

vice-presidents, business unit heads and other

senior managers. (All play an instrumental

role in product strategy, product development

and/or supply chain management in

their firms.)

Survey respondents are distributed across ten

sectors: the best represented are information

technology (19% of respondents), industrials

(15%), financial services (12%) and healthcare

(10%). The sample is evenly split between

large firms, with annual revenue of more than

US$500m, and small and mid-sized firms.

• In-depth interviews were conducted with

the following senior executives and experts

(listed alphabetically by organisation):

• Amir Sharif, professor, Brunel University

• Alejandro Arboleda, chief financial officer,

Asia-Pacific, DHL Global Forwarding

• Duleesha Kulasooriya, head of strategy,

Deloitte Centre for the Edge

• Robin Hales, vice-president, Asia, marketing

and product, Interface

• Sohil Gilani, chief product officer,

Lazada Group

• Emanuel de Bellis, project leader, Institute

for Customer Insight, University of St Gallen

• John Davison, chief executive officer,

Zuellig Pharma

We would like to thank all interviewees and

survey respondents for their time and insight.

The EIU bears sole responsibility for the content

of this report. The findings do not necessarily

reflect the views of the sponsor. •

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Customisation advances in emerging markets



Mass production may have dominated the

manufacturing world for the past century, at

least for large companies, but build-to-order – a

core customisation capability – is becoming

increasingly important for businesses of all sizes.

Six-in-ten executives in our survey believe that in

three years “no producer will be able to compete

without the ability to build-to-order.” This is

because they see demand for highly customised

products, both in their home markets and

abroad, as strong and growing.

levels and burgeoning access to the Internet –

particularly using mobile devices – are helping to

fuel demand for high levels of customisation.

Figure 1: Demand for product personalisation

will soon be greater in emerging markets than

it is in developed markets



Not just a rich-world


Our research suggests that the global structure

of demand for customisation is shifting. When it

comes to personalisation of goods and services,

demand is seen as highest today in North America,

even by executives based as far away as Brazil,

China and Japan. That is expected to change

within three years, however, with markets in

East Asia and South-East Asia overtaking North

America in personalisation demand, and remaining

ahead of Europe. To drive home this point, nearly

eight-in-ten respondents believe it will not take

long for emerging-market demand for product

personalisation to overtake that of developed

markets. Demand for mass customisation,

meanwhile, is already deemed to be highest in

East Asia; in three years the latter is expected to be

joined by South-East Asia as the regions of highest

demand. In both regions, steadily rising wealth

Source: EIU survey



Neither agree nor disagree


Home markets are likely to be the focus

for personalisation efforts. Each country’s

respondents expect their own regional and

country markets to be more developed than

any other in terms of personalisation. When

it comes to mass customisation, demand is

already focused in home regions, according to

respondents, and will remain so.

That emerging-market demand for customisation

may surpass that in the rich world is no surprise

to Duleesha Kulasooriya, head of strategy at

Deloitte’s Centre for the Edge. Speaking of Asia, he

(continued on page 10)

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Customisation advances in emerging markets

Figure 2a: Regions where demand for

mass customisation is greatest

% of respondents

Figure 2b: Regions where demand

for personalisation is greatest

% of respondents

Central & South America

Middle East & North Africa

East Asia

South Asia

South-East Asia

Western Europe

Eastern Europe

North America

Source: EIU survey






0% 20% 40% 0% 20% 40%















In three years















Customisation-ready cultures?

The proposition that the ground for customisation may be as or more fertile in Asia’s emerging

markets than elsewhere is entirely plausible to Emanuel de Bellis, project leader of the Institute

for Customer Insight at the University of St. Gallen in Switzerland. Cultural factors play an

important role in this, he believes. In much of East Asia, says Mr De Bellis, traditional collectivist

attitudes have ceded ground to individualism, at least when it comes to people’s consumption

behaviour. Consumers in urban China and Singapore, for example, “have come to love product

customisation to a much greater degree over the past 10-15 years.”

Consumer comfort with customisation is stronger in some Asian societies than others,

however. In collaboration with fellow academics from the University of St. Gallen and Nanyang

Technological University in Singapore, Mr De Bellis conducted field research (the results of which

were published in 2015) demonstrating that car buyers in China and Singapore are much more

likely to take advantage of customisation options provided by manufacturers than those in Japan

and Taiwan. He and colleagues attribute this to a stronger penchant for “uncertainty avoidance”

in the latter two societies. Mr De Bellis and colleagues conclude that Chinese and Singaporean

consumers are comfortable choosing among numerous product options when customisation is

available; Japanese and Taiwanese consumers, by contrast, feel intimidated by them. 1


Emanuel de Bellis, Christian Hildebrand, Kenichi Ito and Andreas Herrmann, Cross-national differences in uncertainty avoidance predict the

effectiveness of mass customization across East Asia: a large-scale field investigation, 2015.

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Customisation advances in emerging markets

says: “If you go back maybe two decades in some

of these markets, everything was personalised or

customised.” Mr Kulasooriya explains that prior to

the advent of mass production in South Asia and

East Asia, local demand for customised products

existed and that local companies produced at

small enough scale to satisfy it. “These trends

aren’t brand new there,” he says.

The mobile revolution is another personalisation

catalyst in emerging markets, according to Sohil

Gilani, chief product officer of Lazada Group,

a Singapore-based e-commerce firm. “The

mobile device is about as personal a product as

you can have, and it has taken personalisation

to a new level [in South-East Asia],” he says.

Mobile devices and applications also provide a

major source of data about customers and their

preferences, which companies use to formulate

personalisation strategies.

Setting the wheels in motion

Large numbers of companies in our survey believe

they are ready, or are gearing up, to meet such

demand. Mass customisation and personalisation

both figure strongly in companies’ product

strategies over the next three years. More

than half (51%) of respondents say their firms

will pursue the former to some degree, and

nearly as many (47%) say the same in regard to

Figure 3a: China the customiser

Business leaders who say mass customisation will be a part of their product strategy over the next

three years (% of respondents)







South-East Asia








Figure 3b: The personal touch

Business leaders who say personalisation will be a part of their product strategy over the next

three years (% of respondents)











South-East Asia




Source: EIU survey

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Customisation advances in emerging markets

personalisation. Mass customisation figures most

prominently in the strategies of Chinese and

Indian companies, while US firms are the most

heavily focused on personalisation. Pursuing the

latter requires well-developed online interfaces

with customers supported by sophisticated

CRM [customer relationship management]

systems, areas where US firms traditionally

Figure 4a: Personalisation plans

Share of product features that could be personalised today and in three years (% of respondents)

Developed markets

Emerging markets

Up to 10% of the features





Up to 25% of the features





Up to 50% of the features





Up to 75% of the features





All of the features (100%)





None of the features





Do not know





0% 20% 40% 60% 0% 20% 40% 60%


In three years

Figure 4b: Customisation is coming

Share of product features that could be customised today and in three years (% of respondents)

Developed markets

Emerging markets

Up to 10% of the features





Up to 25% of the features





Up to 50% of the features





Up to 75% of the features





All of the features (100%)





None of the features





Do not know





0% 20% 40% 60% 0% 20% 40% 60%


In three years

Source: EIU survey

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Customisation advances in emerging markets

excel. Chinese and Indian firms, by contrast,

may feel their existing capabilities better suit

mass customisation tailored to specific customer

groups rather than personalisation enabled for

individual customers.

Some companies consider both approaches to

be integral to their ability to boost sales over

the next few years. Product quality and price are

naturally pre-eminent factors in any firm’s ability

to achieve this, and this is certainly the case for

the survey respondents. However, one-in-five

respondents considers mass customisation to

be integral to sales growth in the next three

years – following in importance just after product

variety and customer experience. The ability to

personalise products to individual customers’

needs figures less prominently as a sales driver,

but over one-in-ten respondents still cite it.

Fewer than a third of executives say up to 50%

of the features of their top-selling products can

currently be tailored to the needs of individual

groups; one-sixth report this for up to 75% of

product features. More respondents expect that

this will be the case in three years’ time. An even

larger share of executives say their top products

lend themselves to high degrees of personalisation

today, or will in three years’ time.

We have identified a cohort of survey

respondents whose firms are currently using

Customising to improve last-mile distribution

of medicines

National healthcare policies are by necessity designed with mass scales in mind – to ensure

that as great a percentage of the population as possible receive adequate care. Pharmaceutical

companies usually produce medicines on mass scales, often taking their lead from national

health departments. In emerging markets, says John Davison, chief executive of Zuellig

Pharma, this is not always a recipe for success. “Something like 50% of vaccines manufactured

worldwide end up in the dustbin because they do not reach their point of usage in a safe and

quality-managed manner. That statistic is something that we as stakeholders in the healthcare

industry—all of us—need to drive down.”

In its Asian markets, Zuellig Pharma is responding with something closer to a mass

customisation approach. For example, for the European pharma clients whose medicines it

distributes, it breaks bulk production into smaller batches of packs that can be moved into

markets with lower demand, such as Vietnam and Myanmar. It is also expanding its temperaturecontrolled

facilities (cold chain) in South-East Asia and upgrading them to new international

drug-storage standards being rolled out worldwide. And it has introduced a patented box

allowing the storage of vaccines for five additional days at their original temperatures.

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Customisation advances in emerging markets

mass customisation as a sales growth strategy;

these are referred to as mass customisers. We

have similarly identified a cohort of personalisers.

They are a small minority of the overall survey

sample (8% are mass customisers and 6% are

personalisers) but arguably in the stronger

position to take advantage of growing demand for

highly customisable products and services.

An important reward for those firms which are

able meet this demand will be additional revenue

from the premiums they are able to charge over

the price of their standard product. Both mass

customisers and personalisers clearly expect to

reap this reward: more than half (51%) of the

former group believe they can add a premium

of 30% or more to the price of their flagship

products or services in the next three years.

This level of premium is realistic for 42% of

personalisers. Such premiums will likely shrink,

however, when more players in a market offer

high levels of customisation, and personalisation

or mass customisation become prerequisites to

remaining competitive.

Premium decline will happen sooner in

some industries than others. Interface, a

US producer of office carpeting, has been

providing customisation options for its Asian

customers for 20 years. According to Robin

Hales, the company’s vice president of

marketing for Asia, the company’s maximum

customisation premium is 10%, and often it

charges none. Customisation for Interface, he

says, is mainly a means of locking in customers

and improving relationships. •

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Identifying demand for highly customised

products is one thing; meeting it is quite

another. A lot hinges on the adaptiveness and

flexibility of the supply chain. In companies that

have been in business for at least a few years,

their supply chains have likely been geared to

support the mass production of standardised

products. Pursuing mass customisation or

personalisation means the supply chain must

support multiple and often very small scales of

production, and on demand. To do so efficiently

and economically, it should be able to secure

inputs from suppliers on a just-in-time basis,

and deliver final products to customers in a

timely fashion.

The requirements are demanding on all facets

of the supply chain, says Amir Sharif of Brunel

University. “There must be sufficient investment

in demand capture, enterprise resource

planning and CRM, as well as all of the

constituent parts of the production supply

Figure 5: Supply-chain readiness

How ready are your supply chains to support mass customisation in emerging markets?

(% of respondents saying they are ready)

Brazil China Europe India South-East Japan US


Manufacturing facilities


16% 23% 31% 47%



Supplier network


12% 19% 27% 39%



Supply chain finance


11% 20% 24% 36%



Distribution network


15% 20% 31% 32%



Inventory management, warehousing


9% 23% 28% 29%



Online customer interfaces


13% 28% 24% 32%



Data and analytics capabilities


11% 19% 21% 36%



Customer relationship management (CRM)


13% 17% 32% 36%



Payment systems


17% 20% 25% 35%











Source: EIU survey

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Customisation advances in emerging markets

chain – inventory management systems,

production planning, management systems,

shipping, logistics, reverse logistics,

warehousing. All of this needs to be in place.”

Relatively few executives in the survey believe

their firms currently have the components

in place in emerging markets to support a

personalisation strategy. No more than onequarter,

for example, say they have the data

collection and analytics capabilities to do

so. Only 30% say the same about their CRM

and payment systems, and even less believe

their supply-chain financing and distribution

networks are ready to support personalisation.

The numbers are similar (and in some cases even

lower) for personalisers, which underlines how

deep-seated most of these problems are – even

companies firmly set on personalisation are

finding it difficult to address them.

It is a similar picture with supply-chain

readiness for mass customisation. In most

aspects, little more than one-quarter of

respondents believe they have the supply-chain

components in place to carry this strategy off.

The confidence levels of mass customisers are

decidedly lower than in the rest of the sample.

A plausible explanation is that this narrower

group have closely studied the supply-chain

improvements needed to implement the strategy

and thus have a clearer view of the difficulties.

How the West and East


Western companies often benefit from greater

penetration of enterprise technology in

developed markets and their greater supplychain

sophistication. But they do not

necessarily have a higher degree of readiness

to support customisation strategies. In

many areas emerging-market companies’

confidence in the ability of their supply chains

to manage customisation is as high or higher

than that of their peers in the US and Europe.

For example, respondents from South-East

Asia, Brazil and India appear to have greater

faith than US and European peers in the

personalisation-readiness of their manufacturing

facilities, inventory management, supplier

networks and payment systems, among

other facets.

This helps explain why most respondents in

the overall sample believe that businesses

in emerging markets are better placed than

developed-world peers to meet personalisation

demand close to home.

Figure 6: Emerging-market companies

are better positioned than developedmarket

companies to meet demand

for personalisation in their markets


Source: EIU survey




Neither agree nor disagree


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Emerging-market respondents similarly express

greater confidence in their supply chains’ masscustomisation-readiness

than US and European

peers in almost every aspect. (China is the

notable exception to this – see box.)

Deloitte’s Mr Kulasooriya sees a number of ways

emerging-market companies can best their

developed-market peers. One is the ability to

produce at minimum scale. “In the developed

world,” he says, “incumbent manufacturers

have the advantage of knowing how to produce

at scale, but most are not set up to build small

volumes. I’ve come across some factories in

China that are really focused on the minimum size

batch. They’re trying to build it to the smallest

possible scale so that they don’t have to produce

100,000 units at a time.”

Brunel University’s Mr Sharif agrees that

emerging-market companies may have a scale

advantage over their rich-world peers. In the case

of South Asia, he ascribes this to historical factors.

“Personalisation is an easier concept for firms

in emerging markets than in the West because

there is still a very strong ethos of artisan-based

production. In India it might not be such a big leap

for companies as for those in the West because

they already have that ethos of personalising.”

Provided they upgrade their local supply

chains, emerging-market players should enjoy

an additional advantage over overseas rivals

in pursuing customisation strategies close to

home. One reason is that logistics costs are

usually lower when production facilities are

located closer to end-customers. Another is

that personal relationships matter enormously

between producers, suppliers and distributors

in emerging markets, particularly in Asia. When

delivery issues arise, they can more easily be

resolved when the principals are located in the

same country or region.

Interface’s carpet customisation strategy works,

says Robin Hales, because it’s key suppliers of

fibre are located very close to its manufacturing

plants in China and Thailand. “We work very,

very closely with them,” he says. “We couldn’t do

customisation any other way.” •

China: big hopes, bigger challenges

Executives of China-based companies are pinning high hopes on mass customisation – higher

than those from any other country in the survey – as a means of increasing sales in the coming

years. If the survey is any judge, however, they will encounter significant difficulties in making

such a strategy work. When it comes to the state of their manufacturing facilities, their

supplier and distribution networks and their inventory management and data capabilities

– across every key facet of readiness – Chinese respondents uniformly express the least

confidence of their global peers in their supply chains’ ability to support mass customisation.

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Customisation advances in emerging markets

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Customisation advances in emerging markets



There are few illusions among businesses

about the challenges that must be met to

support customisation strategies. These

are numerous, ranging from poor Internet

connectivity to inadequate financing options.

Some are within the power of companies to

address; others are more intractable and

require action by governments and other

external stakeholders.

Foremost among the challenges are insufficient

insight about customer demand, a shortage

of reliable distribution options and a lack of

working capital.

Delivering insights

from data

The lack of insight about customer demand is

largely a result of inadequate data and analytics.

Effective customisation strategies cannot be

conceived without solid customer data, insightful

analysis and good customer-feedback mechanisms.

The ability to deploy analytics tools, and make

decisions based on their results, are fundamental

to understanding the specific product and service

features that customers desire, whether customer

segmentation can be refined, and how new

Figure 7: The biggest obstacles to mass customisation and personalisation strategies

% of respondents

Lack of quality transport infrastructure



Mass customisers


Inadequate payment systems



Lack of working capital



Lack of reliable distribution options



Inadequate Internet connectivity



Lack of customer insights



Shortage of local production skills



Shortage of local marketing skills



Inadequate/insufficient financing



None of the above



0% 10% 20% 30% 40% 50%

Source: EIU survey. Note: The cohort of “mass customisers” is comprised of respondents who deem mass customisation as critical to their firms’

ability to grow sales, and are also well along the way in making the features of their top-selling products customisable. “Personalisers” are those who

deem personalisation as critical to sales growth and whose top products lend themselves to a relatively high degree of individual tailoring.

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Customisation advances in emerging markets

segments – or individuals – can be marketed to. This

is a challenge in emerging and developed markets

alike. Insufficient insight into customer demand is

the top-rated personalisation and customisation

challenge among both Chinese and US respondents,

and also of great concern to those in India.

Emerging markets may, however, have particular

difficulties dealing with certain aspects of data

analysis due to the lower penetration there of

advanced analytics tools. For Lazada Group’s Sohil

Gilani, the lack of structured data is a big challenge

in this area. He points out, for example, that most

of the products its sellers in China and other Asian

countries provide may not have a barcode; the

company uses a mix of image recognition and other

mapping technologies to provide incremental

product information critical to its users. “There is

no shortage of data in this region,” Mr Gilani says,

“but too much of it is unstructured and thus difficult

to mine. New technologies only becoming available

now are helping us to get around this problem.”

Financing customisation

In many emerging markets, limited sources of

both long and short-term financing have often

hampered the development of companies’ supply

chains. Those pursuing customisation are likely

to find the financing challenges getting tougher,

because it requires the types of flexible financing

options that have not generally been available

there. Seven-in-ten respondents (eight-in-ten

in China and South-East Asia) agree that such

strategies require new approaches to supplychain


Extremely low interest rates are currently a boon

to some manufacturers pursuing customisation,

making it less costly to hold inventory than it has

been for some years. But Alejandro Arboleda,

chief financial officer in Asia-Pacific for DHL

Global Forwarding, also believes low financing

costs have removed some of the impetus in Asia

for financing innovation.

Figure 8: Mass customisation and personalisation require new approaches to financing


Customisers vs non-customisers


Personalisers vs non-personalisers


26% 15% 0% 25%


85% 71%








Agree Neither agree nor disagree Disagree Agree Neither agree nor disagree Disagree

Source: EIU survey. Note: See Figure 7 for an explanation of what constitutes “mass customisers” and “personalisers”.

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Working capital shortages are the most

problematic area of financing for ‘personalisers’,

and in some respects for ‘mass customisers’,

felt keenly by executives in South-East

Asia and Brazil, but also in developed

markets such as Japan. With working capital

tight, firms can ill afford to tie up too much

of it in inventory (although low interest

rates mean they have more flexibility with

inventory today than previously), yet they

also need to hold enough inputs to respond

efficiently to highly customised orders. More

flexible terms of working capital finance are

likely to be required.

Businesses pursuing customisation will also

need to be able to pay suppliers at more frequent

intervals – and in some cases in close to real

time – to accommodate on-demand and just-intime

delivery of inputs. At the same time, many

firms are looking to lengthen payment terms

to their suppliers. Mr Arboleda observes that

standard terms today are 60 days rather than 30

days as had been the case in previous years. “We

continuously see extremely high pressure from

customers to increase their credit terms,” he says.

In short, supplier financing needs are becoming

more complex thanks to customisation, and

companies will need new options to meet them.

Figure 9: Financing needs

% of respondents

Increase the need for

real-time payments to suppliers


Require more flexible

financing options



30% 42%


Lead to increased

frequency of payments

to suppliers





Require higher borrowings

for working capital


Lead to longer payment

terms to suppliers


Require more long-term

capital investments

Mass customisation will:

Personalisation will:

Source: EIU survey. Note: In the graphic, blue data points represent the results from the cohort of “personalisers” and green data points represent

the “mass customisers.” Figure 7 for an explanation of what constitutes mass customisers and personalisers.

20 © The Economist Intelligence Unit Limited 2016

Made to order

Customisation advances in emerging markets

Greater long-term capital investment will

also be required. Manufacturers, for example,

will need to re-tool their existing equipment

– or purchase entirely new equipment – to

accommodate flexible and smaller-batch

production. Firms will also have to invest in

the advanced data-analytics systems required

to generate customer insight, as well as the

web interfaces that support sophisticated

customer interaction.

Customisation will also require some innovation

in customer payment systems. The inadequacy

of existing payment systems threatens to

derail some companies’ efforts to pursue

personalisation strategies. Lazada’s Mr Gilani

says customer payment a unique personalisation

challenge his company faces. “In the West it’s

given that if you buy online you’ll usually use

a credit card. In South-East Asia, everything

from cash at the counter, ATM bank transfer and

credit cards will be used. While we strive to make

all payment channels available to everyone,

we encourage customers to make greater use

of online payments, because that will further

facilitate personalisation.”

Infrastructure: not up to it

Poor transport infrastructure is a significant

external impediment to customisation in some

countries. It is likely to be one reason why both

‘mass customisers’ and ‘personalisers’ cite a

lack of distribution options as a key obstacle to

their success in emerging markets. In emerging

markets, says Brunel University’s Mr Sharif,

“This is where reality hits. Last-mile logistics,

getting the product to your customer, hinges on

the quality of the transport infrastructure, even

of fuel and energy availability, and emerging

economies clearly have major challenges here.”

Worries about transport may help to explain

why survey respondents point to a lack of

reliable distribution options as a serious

customisation challenge. Respondents in

India, China, Brazil and South-East Asia

feel this problem particularly strongly.

“If you don’t have good quality transport

infrastructure,” says Mr Sharif, “if you don’t have

a sustainable and secure supply of fuel to power

your trucks, or to transport goods via train, plane

or other means, you won’t have a personalised

product because you’ll never be able to deliver it in

good time.” •

© The Economist Intelligence Unit Limited 2016


Made to order

Customisation advances in emerging markets




While many companies see opportunities to

expand sales in emerging markets by pursuing

mass customisation or personalisation

strategies, only a handful are taking concrete

steps in this direction. The experts we have

interviewed believe the hopes of this select few

are not misplaced, and that in several emerging

markets – notably in Asia – consumers are

ready to take up such offers. If they are right,

‘mass customisers’ and ‘personalisers’ look

likely to benefit not only from better customer

relationships but more tangibly from revenue

growth, as the price premiums they are able to

charge are likely to be sizeable.

Not all products and services, of course, lend

themselves to customisation. But in markets

where they do, such practices will eventually

come to be commonplace, in the emerging as well

as the developed world. At that point, offering

customers the ability to customise products or

services will be a core requirement to compete

in the market. All businesses should prepare for

this; those who wait will miss the first-mover –

and revenue growth – opportunity.

Yet grasping the opportunity will be much easier

said than done. The toughest challenges for

‘mass customisers’ and ‘personalisers’ lie less

in developing consumer awareness and more

in priming their supply chains to support such

efforts. Particularly hard work lies ahead in

upgrading their data, distribution and logistics

capabilities, and getting all their financing

mechanisms in order.

Being a first mover usually involves upfront

costs and risks. Companies will eventually need

to bear the costs of making the supply chain

customisation-ready, however. The greater risk in

this case may be in waiting too long and missing

the existing window of revenue opportunity. •

22 © The Economist Intelligence Unit Limited 2016


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