Growth in urbanization has been the driving factor for rise of emerging economies internationally. The quickly spreading urbanization has also bought a spree of diverse buying trends among its consumers over the years. According to a Market research, the customers’ spending in the emerging markets such as China, India and others is expected to increase three times by the year 2020. Consumers of this new era are increasingly demanding new things and seeking services/products that are customized as per their requirements and needs.
Here are the top five goods and services which the emerging economies are spending on –
Customers are increasingly spending on consumer goods, for example personal care goods, and especially on big capital goods, particularly the air conditioners. As per a market research the greatest increase in beauty and personal market will come from India and Turkey. However, this earlier growth is often disturbed by the demand for cell phone. Some experts opine that the much of the emerging market consumers will give up nutrition for connection. Research studying the Chinese smart phone market explains that the number of users in the market had reached up to USD 700 million by the end of 2013.
Food and Beverage
As the per capita income rises, the most obvious change is the rise in disposable income, which in turn has increased the consumption of more expensive prepared food stuffs, for example, snack food stuffs in Mexico, cooking sauces in china and breakfast cereals in India etc. Comparatively, even the UK, which is a mature market, the rise in snack is visible and is further encouraged by the launch of new products. Consumers are now splurging on calories. As per a Food and Beverage research report around USD 1,500 of the customer’s annual per capita income is spend to acquire more of these calories.
The food service market is profiting to a great extent as well. Growth is speedier in most emerging economies, especially in India and China, where the expansion of coffee shop chains, and restaurants and business spending has encouraged the demand.
A study on Malaysia illustrates the consumers have started to spend approximately 23% of their income of food and beverages. The only exception this trend is the Mexico, where people prefer to eat at home.
A noticeable never-ending trend in such economies is that as the market matures, there is a strong demand for premium level of alcohols- like Lambanog in Philippines, Ruou in Veitnam, and Baijiu in China. Market research has shown that when people have more disposable income in their hands, they tend to splurge quite a lot on beverages, both on non-alcoholic and alcoholic drinks.
The healthcare segment is another sector in which there has been an outstanding amount investment from the emerging market consumers. Research shows that the newly wealthy people are increasingly spending on better health care options.
Emerging markets like China, Brazil, India and Russia are among the top sixteen emerging markets that will make up almost a one third of the global spending on drug within four years.
Recent trends show that the OTC drug market where consumers can get drugs or any medicines without prescription is increasing in value and volume in the emerging economies.
The emerging markets are estimated to continue the growth of healthcare consumer goods as a direct result of expansion in the middle class.
Other than consumer goods, health and food & Beverage, consumers look to spend on better and more comfortable transportation, however progress in this aspect is not as one would expect. For example, in India it isn’t unusual to see a family of four ride a motorbike, even though the general expectation for them would be to get a car, which they might purchase- unless there are too many buying cars, in which case people would opt for a two-wheel vehicle in order to get around in traffic, where a car is most likely to get stuck.
As the budget on expenditure increases, a growth in demand for the luxury products is being witnessed in the emerging markets. Until recent years, the world of luxury goods was only exclusive to the wealthiest of customer market like Western Europe, Japan and America. However, consumers from Asia, Latin America, Middle East and Russia are increasingly participating in the international luxury goods market, as they continue to purchase luxury goods like iconic watches, cars, jewelry, wines, fragrances and leather goods.