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08-Nov-11
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The Changing Consumer: Beyond the BRICs
The countries behind the acronym 'BRIC' are well known. What is not well known is which countries are on course to follow in their growth footsteps.
In this research note, we present the first of a multi-step process for identifying the next generation of developing markets that could soon command an acronym of their own that has deep, economic meaning. This undertaking is a data-driven exercise that looks at economic and demographic growth metrics for a universe of developing economies – 46 to be exact.
Indonesia scored highest in our analysis. The Middle East was also well represented – Iraq, Iran and Saudi Arabia – while other interesting names included Bangladesh, Colombia, Ghana, Nigeria and Pakistan. Whether those countries continue to make the grade will be decided in upcoming reports linked to the Briefing Research investment theme, "The Changing Consumer."
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12-Oct-11
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China's Burgeoning Luxury Goods Market
The quest for luxury is the result of a decade of economic prosperity for the Chinese consumer. One of the underpinnings of our investment theme, "The Changing Consumer," is this structural change taking place across the income frontier in the developing world.
Certain markets are already emblematic of that shift. China's luxury goods segment is one such market, where expectations of double-digit growth will aid it in surpassing Japan by the middle of this decade and eventually challenging the U.S.
As retailers expand in China, they are focused on improving the customer experience. Ultimately, winners and losers among retailers will be decided by consumer tastes, and their current tastes are sheer luxury.
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21-Apr-11
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The Race for Share in the World's Largest Auto Market
China's automotive market is emblematic of a shift in the behavior of the Chinese consumer. The country's auto sector has and will continue to evolve as the consumer base widens through urbanization and China attempts an economic transition into a domestic demand-driven economy. The sector has already become the world's largest in terms of units sold, and this report will break down the international automakers operating in China based on their local joint ventures, market share and expansion plans.
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07-Mar-11
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The Changing Consumer: Assessing the BRIC GDP Outlook
The aggregation of the BRICs into a collective, apart from the remainder of the developing world, served as a means to highlight these fast-growing economies. However, the grouping also serves to mask the unique qualities of each as to drivers and inhibitors of their respective long-term growth. Disaggregation uncovers the differences between each distinctive economy in order to assess the risk -- upside or downside -- to current GDP growth forecasts.
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31-Jan-11
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The Changing Consumer - Demographic Doomsday Awaits?
When most people think about population shifts, they immediately refer to the changing demographics of the Baby Boomer generation in the U.S. or the aging population in Japan. While both are consequential, this isolated attention is misguided. The reality is the aging population shift is not just relegated to the U.S. and Japan. In fact, many countries -- advanced and developing -- are soon going to experience the potential negative economic effects of an aging population.
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21-Jan-11
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The Changing Consumer: Advanced Economies
Change is inevitable in a dynamic, global economy, whether it is population and societal shifts or technological revolutions.
For some time now, the U.S. consumer has been the dominant force in global consumption. That will remain the case for the foreseeable future, yet the legacy of the Great Recession and a long-term demographic shift appear ready to drive changes that will lessen the U.S. consumer's role as the major change factor for the global economy.
The world's other leading consumers -- Japan and Western Europe -- also have an important demographic evolution underway as aging populations, coupled with ongoing economic headwinds appear ready to alter their position in the global economy.
The overriding message is that a long-term demographic evolution will lessen the role of advanced economies in favor of the developing consumer.
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10-Jan-11
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The Changing Consumer
Just as economies evolve, so do consumers. This evolutionary process stems from a multitude of reasons that vary in influence and impact across the globe: economic; political; ideological; technological; societal; and cultural.
In advanced economies, that process is reaching a maturing stage as populations age and consumption growth slows. In developing economies, consumption is on the rise as a transition to policies geared toward driving growth through domestic demand has resulted in an increase in per capita income and the broadening of the middle class.
As we embark on a new year, we are introducing a new long-term investment theme: The Changing Consumer.
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20-Apr-12
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Brazil -- An Easing Cycle, a Credit Story... and Added Risk
The central bank of Brazil continued its current easing cycle Thursday, cutting its benchmark Selic rate by 75 bps to 9.00%. Whether it continues to cut rates or holds steady, one thing is clear with the current policy: it will bolster consumer balance sheets since it will lower debt repayment obligations.
Brazil's real GDP growth slowed to 2.7% in 2011 and the IMF only expects it to rise to 3.0% in 2012 before returning to its trend rate of around 4%. A refinancing cycle for consumers could quicken that return to trend growth.
But it has also increased speculation that a credit bubble is forming in Brazil. In other words, Banco Central do Brasil’s easing cycle is inviting more risks beyond inflation.
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07-Feb-12
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A Resource-Paved Road toward Economic Growth, Consumption
Our strategic long-term view of the capital markets is rooted in structural themes. Sometimes these themes converge, raising the long-term investment potential. This is the case with two of our investment themes: "Commodities – A Structural Imbalance" and "The Changing Consumer." Similar to the BRICs, we believe resources will play a transformative role in determining the next generation of developing economies that have the potential to spur development and invigorate the consumer sector.
As part of our "Beyond the BRICs" series, we have undertaken a data-driven view of the developing world with the goal of generating what we see as a compelling list of potential next-generation resource players. Argentina and South Africa scored highest in our analysis. Other interesting names include Indonesia, Iran, Kazakhstan, the Ukraine and Venezuela.
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