developed & developing markets

 Variations in consumers’ interest/awareness between developing and developed

countries
 Large no of contributory factors (externalities) in developing countries
 Relationship between law enforcement, company behaviour and consumer
welfare
 Highlights challenges and traces the road ahead
Consumer Interests
Developing Countries
 Low-levels of consumer awareness
 Consumers poorly organised, few Cons. Organisations
 Views of consumers seldom incorporated into laws
 No involvement of consumers in law enforcement
 Redressal mechanism ill-developed, cumbersome and costly
 Bargaining power very low/absent
 Standards often reflect views of a particular class of consumers
Developed Countries
 High levels of consumer awareness
 Consumers play active role in advocacy
 Play active role in enforcement of laws
 Redressal process transparent, simple and cost effective
 Consumers have high bargaining power
 Consumers play active part in standard-setting, etc

Contributory Factors
(Law & Regulation related)
Developing Countries
• Laws absent; or ineffective if present
• Enforcement Institutions resource-strapped
• Multiple institutions created but limited capacity on enforcement
• Interference of interest groups hamper functions
• Consumer standards not observed (goods and services)
• Poor governance and weak functions of regulatory institutions
Developed Countries
 Effective laws and better enforcement
 Dynamic process of legislative/regulatory reforms
 Effective governance mechanism and efficient functioning of regulatory
institutions
Contributory Factors
(External Factors)
Developing Countries
 Policy often inclined to benefit SoEs
  Monopolies and abuse of dominance by companies
 Unfair Trade Practices (UTPs) predominant
 Poor service standards (e.g. after sales service)
 Bad infrastructural facilities act as dis-incentive for Cos
 Use of obsolete technology; labour intensive processes
Contributory Factors
(External Factors)
Developed Countries
 Predictable business environment and rules
 Markets often competitive (level-playing field)
 Excellent service standards – high levels of consumer satisfaction
 Well developed infrastructural facilities
 Improved technology leading to improved products
Implication for Businesses
Developing Countries
 Often extractive, to source raw materials
 Non-transparent operations, little or no communication with
communities/consumers/shareholders
 Weak enforcement – help avoid actions
 Low propensity to re-invest in host countries
 Consumer ignorance used to their benefit
 Viewed with suspicion by civil society (no dialogue)
 Large no. of SMEs – little or no incentives by the State
 Old (often ineffective) marketing practices
Challenges & the Way Ahead
 Making relevant information available to consumers in developing countries –
enhancing awareness
 Promoting cooperation between regulatory institutions and consumers/groups in
developing countries
 International (donors) community to strengthen regulatory regimes/institutions in
developing countries
 MNCs to maintain consistent standards of performance across host (developed &
developing) countries