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Where in the world is innovation?
Thursday, 2nd May 2013
Source : James Russo, SVP Global Consumer Insights, Nielsen
It's notoriously difficult for a new product to be successful, so difficult in fact, that Nielsen research suggests that about two out of every three products are destined to fail regardless of where they're launched.

In addition, more than half of all products launched won't sustain their year-one sales performance in year two—regardless of whether they're intended for India, Africa or North America.

To better understand emerging trends and factors affecting global innovation, Nielsen took a closer look at 35 years of new product concepts, from 1978 to 2013, by testing more than 175,000 concepts across 73 countries. In doing so, we discovered an exciting shift. Essentially, emerging markets, such as sub-Saharan Africa, are gaining ground as innovators.

New Product Innovation is Growing Outside of Developed Markets
We can see this recent shift take form if we focus on new product innovation between 2008 and 2012. In 2008, the world's 26 developed market countries, which include the U.S., Great Britain, France, Germany and Canada, generated 75 percent of global new product innovation, while the 47 emerging markets launched the remaining 25 percent.

In 2012, however, emerging market countries like China, Brazil, India and Mexico stepped up their innovation efforts and entered the list of top 10 innovative markets. Overall, the emerging markets contributed 31 percent of the world's new product innovation in 2012, while innovation in developed markets dropped to 69 percent.

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Perhaps the shift isn't too surprising when you consider what consumers in those markets are looking for. According to Nielsen's recent Global Survey of New Products Sentiment, consumers in emerging markets such as Latin America are more eager to try new products than their counterparts in Europe or North America, who exhibit the most trepidation. Eighty percent of Latin American respondents agreed that they like it when manufacturers offer new innovations, well above the global average of 63 percent.

Comparatively, less than one-fourth (23%) of respondents in Europe and 29 percent of respondents in North America consider themselves early purchasers of new products.

Innovation is Climbing in Sub-Saharan Africa
While a 6 percent increase in innovation among the emerging markets was notable between 2008 and 2012, we can see an even more notable trend building in sub-Saharan Africa. New product innovation grew by double-digits over those four years in every country represented in sub-Saharan Africa: innovation grew 43 percent in Kenya, 17 percent in Tanzania, 12 percent in Nigeria and 9 percent in South Africa.

Nielsen research shows that 57 percent of respondents from the sub-Sahara region are willing to switch to a new brand; they're also the most vocal globally about new product experiences. Sixty-seven percent say they're likely to tell others about the new products they purchase, compared with 59 percent globally.

Top Countries For Innovation

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Global Lessons in New Product Innovation
Uncovering a consumer need, delivering true innovation and deploying the right marketing execution all play into whether a product lives or dies. Nielsen's research shows that successful launches possess common traits that can increase the likelihood of success. In particular, new products that are driven by a true consumer need or desire will likely fare the best over the long term. Better yet, products that offer an advantage over others can help increase transaction values and deliver incremental sales.

www.nielsen.com

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