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No Disitermediation In Emerging Markets

Emerging market consumers are not ready to discard their trusted media anytime soon

To paraphrase Mark Twain, reports of the media’s death in Asia and Latin America have been greatly exaggerated; what are the implications for brands?

Roger Darashah

The World is moving online, of that there is no doubt; and emerging markets are no exception to this trend.  Today, Brazil is Facebook’s second largest market and the second most active WhatsApp market globally. Adoption of the Internet is set to grow from 55.7% last year to 61.1% by 2019[1].   India’s figures are equally compelling; nearly 40% of the local population are currently connected, a figure second only to China[2], while the number of mobile-based Internet users is expected to top 371 million by the end of the year[3].

For brands, therefore, social media and digital are the only game in town . . . . These markets are following the well-trodden path towards ‘disintermediation’ where brands are communicating direct to consumers.  The current US Presidential campaign also underlines this trend where both main parties’ candidates are ignoring partisan media altogether and going ‘over the top’ to their constituents through public engagements and social media.

A digital only strategy, however, would be misplaced.   Across the emerging economies of Asia and Latin America, for instance, during the five-year period from 2009, newspaper circulation rose 32.7% in Asia, 3.7% in the Middle East and Africa and around 3% in Latin America; while it fell 8.8% in North America; 21.3% in Europe and 22.3% in Australia and Oceania[4].

From the same report, 22% Brazilians subscribed to paid editorial sites in 2014; today, in Chile, 78.4% of the adult population still read print media; compared to 19.3% who read via a PC or laptop[5].  Across India, print circulation actually continues to prosper; last year, the registered publications in India recorded a growth of 5.8% over the previous year with Hindi publications claiming a combined circulation of over 25 crore followed by English at over six crore, according to the latest annual report of RNI[6].

The trend confirms that – despite the technology and availability of multiple platforms – consumers in such markets still recognise and value the role of journalists as trusted arbiters of information.  In such emerging markets, editorial continues to play a far more profound role in terms of validating, sharing and responding to content than in the US or Europe.  The circulation and advertising freefall across the traditional print media witnessed in the US (and illustrated starkly, below), has not occurred in Asia or Latin America.

The above does not suggest that alternative media sources and business models are not gaining ground in Asia and Latin America. In fact, according to Reuters research[7], 23% Brazilians regularly source news from their mobile devices, and a further 15% from their tablets.  Though India’s millennials are turning to mobile as their primary source of news and information, traditional media (including newspapers and broadcast) remains their most trusted resource[8].

What this highlights is the continued importance of an ‘editorial approach’ to communication and information sharing; consumers in emerging markets such as Asia and Latin America may not be as ready to disintermediate the journalist as quickly as their European and US counterparts.   It’s not simply that traditional (print) media remains important in these markets, but the role of independently validating, verifying and endorsing (or otherwise) content – irrespective of the platform – before sharing, remains  predominant.

What do these insights mean for brands? We believe that while platforms continue to multiply and evolve, the editorial approach remains; this means that consumers still value the role of a trusted third party – a journalist, a blogger or an informed observer – to validate and assess the information in the first instance.  Disintermediation is far from inevitable in emerging markets; brands which remember to engage these intermediaries, will stand the best chance of delivering their message, now and into the future.




[4] Reuters Institute Digital Report ‘14

[5] Ipsos Media/ComScore



[7] Reuters Institute Digital News Report 2013


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