Download - Euromonitor emerging markets
Emerging Market Consumers: A comparative study of Latin
America and Asia-Pacific
Euromonitor International
ESOMAR Latin America 2010
Table of Contents
Emerging markets and the global recession
Demographic dynamics
Income inequality and the rise of the middle class
Spending priorities
Consumers in 2010 and beyond
Image for 2010Emerging markets and the global recession
2010: Recovery is driven by emerging markets
-9
-4
1
6
11
2006Q
1
2006Q
2
2006Q
3
2006Q
4
2007Q
1
2007Q
2
2007Q
3
2007Q
4
2008Q
1
2008Q
2
2008Q
3
2008Q
4
2009Q
1
2009Q
2
2009Q
3
2009Q
4
2010Q
1
2010Q
2
2010Q
3
2010Q
4
20
11
Q1
20
11
Q2
20
11
Q3
20
11
Q4
% r
eal G
DP
gro
wth
over
pre
vio
us
quart
er, a
nnualiz
ed
2009: 89
2010: 17Number of countries
expected to see
negative real GDP
growth
Emerging economies
World
Advanced economies
Real GDP growth: % growth over previous period, annualised
Source: IMF
Winners and losers
-10.0 -5.0 - 5.0 10.0 15.0
ItalyEU-27
United Kingdom
FranceGermany
Argentina
JapanSouth Africa
Australia
Canada
USASouth Korea
Russia
Turkey
MexicoSaudi Arabia
BrazilIndonesia
India
China
2009 2010
Annual % real GDP growth in G20: 2009-2010
Source: IMF 5
Latin America
Recovery in Latin America is not homogenous across countries. Commodity-exporting countries (Brazil, Chile, Colombia and Peru) are expected to perform better in the region, while commodity importers face a slower recovery.
Real GDP growth in selected markets: 2008-2009, Growth over previous period
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
Argentina 1.2 1.8 1.3 -0.5 0.1 0.1 0.1 na
Brazil 1.8 1.2 1.4 -3.4 -1.0 1.4 1.7 2.0
Chile 1.8 1.9 -1.3 -2 -0.7 -0.3 1.1 na
Colombia -0.4 0.6 0.2 -1.3 0.1 0.8 0.2 na
Mexico 1.2 -0.4 -0.1 -1.9 -6.9 0.3 2.5 2.0
Source: National statistics
Note: Data are seasonally adjusted
Brazil
Brazil’s economy suffered a contraction
in 2009, largely as a result of slowing
global demand for Brazilian exports,
particularly of raw commodities.
Nonetheless, the economy has
rebounded owing to the strong capital
inflows and good policy management
by the government.
The unemployment rate in Brazil
dropped to 6.8% in December 2009
returning to the same level recorded in
December 2008.
Growth of private consumption fell
during 2009, but is supported by low
borrowing costs, tax cuts and
aggressive government spending.
4.74.1
9.9
3.74.5
8.6
0
2
4
6
8
10
12
Real GDP Growth
Inflation Unemployment Rate
2010 2011
Selected macro-economic indicators:
2010-2011
Source: IMF/ILO/National statistics
Mexico
The recession in Mexico ended in Q3
2009. This was a reflection of the
improvement in industry and services
caused by the revival of external and
domestic demand.
Swine flu alone cost the country more
than US$2 billion. The recession in the
USA led to a sharp drop in exports and
remittances and the recovery is
dependent on the strength of the US
manufacturing sector.
Consumer spending fell by 8.0% in
2009 owing to tighter credit, a drop in
wages and remittances. Spending
should begin to rise again in 2010,
increasing by 1.8%.
4.03.5
6.3
4.7
3.0
5.7
0
1
2
3
4
5
6
7
Real GDP Growth
Inflation Unemployment Rate
2010 2011
Selected macro-economic indicators:
2010-2011
Source: IMF/ILO/National statistics
Asia Pacific
Asia recovered from the downturn faster than other regions owing to the highly effective policy responses taken by governments. While deflationary pressures and a strong yen could stifle Japan's recovery, China continues to display a strong recovery backed by robust growth in private demand.
Real GDP growth in selected markets: 2008-2009, Growth over previous period
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
China 10.6 10.1 9.0 6.8 6.1 7.9 9.1 10.7
India 2.0 0.8 2.2 -0.3 1.4 2.5 3.0 na
Indonesia 1.8 1.7 1.5 0.2 1.1 1.3 1.5 1.5
South Korea 1.1 0.4 0.2 -5.1 0.1 2.6 3.2 0.2
Vietnam 7.5 5.7 5.9 5.7 3.1 4.5 5.8 7.4
Source: National statistics
Note: Data are seasonally adjusted. Data for China and Vietnam are year-on-year and are not seasonally adjusted
China
China’s growth continues to remain
buoyant aided by a strong rebound of
exports, robust growth in private
demand and continued increases in
foreign investments.
Domestic spending is driven by the
stimulus package and the relaxation of
restrictions on bank lending.
Concerns about asset price bubbles
still persist. Timely monetary tightening
will not only help sustain growth but
also avoid overheating.
10.0
3.0
4.5
9.7
3.5
4.5
0
2
4
6
8
10
12
Real GDP Growth
Inflation Unemployment Rate
2010 2011
Selected macro-economic indicators:
2010-2011
Source: IMF/ILO/National statistics
Indonesia
Indonesia's economy performed better
than that of many other large Asian
countries in 2009 thanks to its large
domestic market and relatively modest
dependence on exports. The
government has been introducing a
range of more liberal policies to boost
economic activity, investment and
employment.
Unemployment fell to 7.9% at the
end of 2009 – the lowest rate in
nine years.
Good harvests have boosted farm
incomes and commodity exporters
are benefiting from the surge in
China's infrastructure investment.
4.8
6.2
9.4
5.05.4
9.1
0
1
2
3
4
5
6
7
8
9
10
Real GDP Growth
Inflation Unemployment Rate
2010 2011
Selected macro-economic indicators:
2010-2011
Source: IMF/ILO/National statistics
Demographic dynamics
Demographic dynamics
A tale of two regions
Latin America
Asia-Pacific
Stark differences in major markets
2010
Total population
Median age
% aged 0-14
% aged 65+
Fertility rate
Largest city
China
1.3 billion
38.8 years
16.4%
9.7%
1.8
Shanghai - 12.0 million
Brazil
195 million
28.8 years
25.6%
6.8%
1.8
Sao Paulo – 11.4 million
Source: UN/National statistics
Income inequality and the rise of the middle class
Fundamental differences in income distribution between the two regions
Gini Index
Asia Pacific: 0.413
Latin America: 0.500
Average household income:
Asia Pacific:
US$11,159
Latin America:
US$16,254
Households with an annual income over US$15,000:
Asia-Pacific: 7.3%
Latin America:
33.2%
Source: National statistics
Income inequality in Latin America impacts on the size of the middle class
34%31%
29% 28%27%
24% 24%23% 23%
22% 21%19%
0%
5%
10%
15%
20%
25%
30%
35%
40%
% o
f household
s w
ith a
n incom
e b
etw
een
75%
and 1
25%
of th
e m
edia
n incom
e
Middle class households: 2009
Source: National statistics
It also means the Latin American rich are richer than the Asia-Pacific rich
- 25,000 50,000 75,000 100,000
Vietnam
India
Indonesia
Pakistan
Bolivia
Philippines
Turkmenistan
Thailand
China
Kazakhstan
Azerbaijan
Ecuador
Argentina
Colombia
Peru
Chile
Malaysia
Mexico
South Korea
Taiwan
Brazil
Venezuela
US$ per household
Average disposable income of decile 10 households: 2009
Source: National statistics
With some startling extremes
- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0
Kazakhstan
Pakistan
Azerbaijan
Taiwan
Chile
Indonesia
South Korea
India
Vietnam
Venezuela
Mexico
Turkmenistan
Argentina
Thailand
Bolivia
Philippines
Malaysia
China
Ecuador
Peru
Colombia
Brazil
The ratio of a decile 10 income to a decile 1 income: 2009
Source: National statistics
Spending priorities
Income inequality has a huge impact on spending patterns
-
2,000
4,000
6,000
8,000
10,000
12,000
Latin America Emerging Asia
US
$ p
er
household
Average spending of a decile 5 household: 2009
Necessities Discretionary spending
52%
A middle income household in Latin
America spends 44% more than
the equivalent household in
Emerging Asia
Despite this, the proportion of
budget devoted to necessities is
similar: 49% in Latin America
and 52% in Emerging Asia
49%
Source: National statistics
How does the spending of the rich compare?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
China Brazil
% o
f to
tal household
expenditure
Average expenditure of a decile 10 household: 2009
Alcoholic Beverages & Tobacco
Food & Non-Alcoholic Beverages
Miscellaneous Goods & Services
Hotels & Catering
Education
Leisure & Recreation
Communications
Transport
Health Goods & Medical Services
Household Goods & Services
Housing
Clothing & Footwear
Source: National statistics
And the poor?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
China Brazil
% o
f to
tal household
expenditure
Average expenditure of a decile 1 household: 2009
Alcoholic Beverages & Tobacco
Food & Non-Alcoholic Beverages
Miscellaneous Goods & Services
Hotels & Catering
Education
Leisure & Recreation
Communications
Transport
Health Goods & Medical Services
Household Goods & Services
Housing
Clothing & Footwear
Source: National statistics
Consumers in 2010 and beyond
Technology & Communications
Emerging markets increasingly plugged in
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
2010 2015 2020
Internet Users
Asia Pacific
Latin America
Staying connected on the go
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
2010 2015 2020
Mobile Phone Subscriptions
Asia Pacific
Latin America
Health & Wellness
Better living through nutrition
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2009 2014
Health & Wellness China - RMB mn
Better living through nutrition
0
25000
50000
75000
2009 2014
Health & Wellness Brazil - R$ mn
Focus on prevention and dietary gaps
Vitamins and Dietary Supplements
RMB mn
0
10000
20000
30000
40000
50000
60000
70000
80000
China
2009
2014
Vitamins and Dietary Supplements
Rs mn
0
5000
10000
15000
20000
25000
30000
35000
40000
India
2009
2014
Focus on prevention and dietary gaps
Vitamins and Dietary Supplements
R$ mn
0
500
1000
1500
2000
2500
3000
Brazil
2009
2014
Vitamins and Dietary Supplements
Mx$ mn
8200
8400
8600
8800
9000
9200
9400
9600
9800
Mexico
2009
2014
Eco-Awareness
Translating awareness into sales
Competitive pricing
Packaging redesign
Concentrated products
Communicating benefits
Retail evolution
Expansion of chained retailing – Asia Pacific
Asia Pacific Outlets 2009 Outlets 2014
Hypermarkets 4048 6786
Supermarkets 124477 154445
Discounters 1043 1545
Small Grocery Retailers 11349185 11608480
Food/Drink/Tobacco
Specialists 3747283 3803238
Expansion of chained retailing– Latin America
Latin America Outlets 2009 Outlets 2014
Hypermarkets 1770 2129
Supermarkets 9940 11111
Discounters 21636 22554
Small Grocery
Retailers 1592974 1658011
Food/Drink/Tobacco
Specialists 395421 412058
Internet retailing: a new frontier for shoppers
0
200
400
600
800
1000
1200
-100 0 100 200 300 400 500 600
China
India
Argentina
Brazil
Mexico
04-0
9 P
erc
en
tag
e V
alu
e G
row
th
09-14 Percentage Value Growth
