Exploring Consumer Trends: Whitepaper

Emerging markets offer attractive investment opportunities, supported by favorable economic fundamentals and a rapidly expanding middle class. But classic consumption patterns appear to be evolving, and this could have implications for emerging markets investors.

Damian Bird and Pam Macedo, thought leaders with Polen Capital Management, explain why in a newly released whitepaper.

Key points:

  • For most of the last twenty years, leading companies that cater to the basic needs of emerging market consumers have generally enjoyed healthy double-digit sales growth.
  • The thought leaders believe that in recent years the spending patterns of developing world consumers have fundamentally shifted.
  • Consumption of basic staples products is increasingly being crowded out by spending on more engaging and aspirational wants, such as smartphones, video games, and wellness products.

In this whitepaper, Bird and Macedo explore the evolution of consumer purchase habits in emerging markets. First, the authors analyze data trends, which they believe suggests that traditional S-Curve theories have become less relevant at explaining existing purchase habits.

Second, Bird and Macedo attempt to understand what factors might be driving the slowing consumption growth of consumer staples.

Third, the thought leaders present evidence that disposable income is increasingly being spent on more engaging products and services, such as video games and sportswear. The authors explore potential implications for investors and the importance of an active approach to identifying the most attractive growth opportunities in a rapidly changing emerging markets landscape.

Polen Capital Management is an Associate member of TEXPERS. The information in this post and the linked whitepaper is provided for informational purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of the date of this post and linked whitepaper, may involve a number of assumptions and estimates which are not guaranteed and are subject to change without notice.
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