New World Order

The world is undergoing an irreversible shift eastwards Marshall Astor, Creative Commons (2006) ©

Scope
America is the economic epicentre of the world, accounting for nearly a fifth of the global economy. But with 800 million new consumers joining the middle classes by 2020 – many of them in Asia – the world is undergoing an irreversible shift eastwards.

Unveiled in early 2011, China’s latest 'Five Year Plan' had a ‘cornerstone’ strategy of stimulating private consumption after 30 years of focus on investments and exports – a shift described by Morgan Stanley economist Stephen Roach as “likely to spark the greatest consumption story in modern history”.

Determined to be included in this story, many Western companies have decided to cut themselves a slice of the action. Over 450 of the Fortune 500 companies have invested in China, while 2.9 million American jobs have been cut over the past decade to make way for increased hiring overseas. Products are being designed specifically for emerging markets, such as Häagen-Dazs' 'mooncakes', sold only in China. Back home, Western services are becoming more Asian-friendly, with London's famous Harrods employing 75 Mandarin-speaking staff and introducing domestic Chinese banking terminals to allow payments from Chinese accounts.

As a result of the East's ascendancy, however, a Western consumer backlash is already underway – leading to rising patriotism and an increased desire to buy locally produced goods. Some fear that the shift in focus may result in a weakened and neglected West, with high unemployment viewed as a precursor. Others embrace the changes, hoping for collaboration on an unprecedented global scale.

As the world shifts irreversibly eastwards, new opportunities and challenges are created for Western and Eastern consumers and companies alike. How can brands navigate the changing tide, and what new possibilities does the future hold?

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