Brazil's Business Environment: Consumption in Economic Slowdown

250_brazilBusiness-v1.0On the surface, Brazil looks like an attractive market. It is the seventh largest global economy and has a population of 200 million, with high consumer expenditure and high demand for commodities.
But Brazilians are spending less, industrial confidence is deteriorating, and inflation is rising, meaning a future of slow growth and economic recovery.

Consumer goods companies operating in Brazil need to adapt their strategy to integrate the global market place. What are the reasons behind this slowdown and how can organisations work it to their advantage? 

Download our white paper today to learn:

› How Brazil’s rapid currency depreciation has affected its economy and consumers 

› Which consumer industries are slowing down and which have new opportunities

› Why the middle class is changing Brazil’s economic landscape

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May 27, 2015

The Growth of Affordable Small Appliances in Emerging Markets

Affordable small appliances enjoyed growth from 2009-2014, mainly due to increased disposable incomes as well as increased appearance awareness. Unlike developed markets like in the US, France, Germany and Japan where luxury convenience products have posted high growth, price sensitivity remains a key factor in emerging markets.

Thidathip TawichaiVideo Features Thidathip Tawichai - Consumer Appliances Research Analyst

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Euromonitor to Speak at FederSalus 2015

FederSalus

Euromonitor is pleased to speak at FederSalus and Parco Tecnologico Padano International Workshop: Global trends, Regulation and Innovation in Food Supplement Products

Date: Friday, 29  May 2015

Location: Lodi, Italy

Event Description: FederSalus – Italian Association of Health Products Manufacturers and Distributors and Parco Tecnologico Padano organize the International Workshop: Global trends, Regulation and Innovation in Food Supplement Products

Continue reading "Euromonitor to Speak at FederSalus 2015" »

Looking Beyond the Obvious in Sub-Saharan Africa, Part 1: Venturing North in Store-Based Fashion Retailing

Bernadette-KissaneAnalyst Insight by Bernadette Kissane - Apparel and Footwear Associate

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For many fashion brands, South Africa has been the stepping stone into the sub-Saharan region due to the attractive economic growth and affluent market. But has the time now come to start expanding north? According to Euromonitor International, sales through apparel and footwear specialists in Nigeria and Kenya are expected to grow by 93% and 57% in constant 2014 value terms, respectively, from 2014 to 2019, highlighting growth opportunities outside the wealth-hub of the region. This is the first of a 2-part series of articles that sets out to examine growth drivers in the region, as well as the competitive landscape in store-based retailing; the second article will review dynamic growth in e-commerce.

Continue reading "Looking Beyond the Obvious in Sub-Saharan Africa, Part 1: Venturing North in Store-Based Fashion Retailing" »

May 26, 2015

New Travel Research: Key Findings

Caroline BremnerAnalyst Insight by Caroline Bremner - Head of Travel Research

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Euromonitor International is pleased to announce that our new Travel research will be published this week. The new research provides the latest insights into how the travel industry performed over 2014 and future expectations to 2019.

In this article we provide a sneak preview of trends and expectations. Check back throughout the week for more travel market research and subscribe to our email bulletins for more travel information.

Tourism flows hampered by geopolitics

Growth in the travel industry was tempered in 2014 by ongoing geopolitical tensions as regional conflicts took their toll on tourism demand. Russian outbound demand declined sharply in 2014 by over 15%. This downward trend is expected to continue in 2015 as the Russian economy contracted in the first quarter of the year and consumer confidence fell to its lowest level in six years as a result of the conflict in Ukraine and ensuing international sanctions, compounded by falling oil revenues. Falling outbound Russian demand had a knock-on effect on destinations far and wide, including Turkey, Greece, Switzerland and Thailand.

Continue reading "New Travel Research: Key Findings" »

May 25, 2015

Mondelez Aims to Breathe Life into Gum Sales with Launch of Trident in China

Jack SkellyAnalyst Insight by Jack Skelly - Food Analyst

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Despite an apparent slowdown in the Chinese market, it still appears to be the Holy Grail of sales growth for nearly every company in the confectionery world, with the notable exception of Lindt. Indeed, Mondelez is continuing its relentless effort to expand into Asia Pacific, where it acquired Vietnamese biscuit manufacturer Kinh Do in 2014. It has announced plans to adopt this acquisition strategy in several other countries in the region and, in May 2015, announced plans to launch its global gum brand Trident into China, despite already achieving some success in the country with its Stride range. The reasons for the move appear to be rooted in the gum world’s sclerotic growth.

Gum falling out of fashion in developed markets

On the surface, Mondelez’s gum sales appear solid; globally, the company added US$1 billion in sales between 2009 and 2014, equating to a 3% CAGR. However, this hides the fact that sales underperformed in North America and Western Europe, with the company’s combined sales declining by US$330 million. While gum sales have declined in both markets, Mondelez’s poor performance accounts for over 40% of the US$800 million combined sales decline of these gum markets. The decline is due to gum becoming socially stigmatised - it is viewed as being both anti-social and a public nuisance in that it contributes to littering.

Continue reading "Mondelez Aims to Breathe Life into Gum Sales with Launch of Trident in China" »

Fibre vs Protein: Which Will Be the Winner?

Simone_BarokeAnalyst Insight by Simone Baroke - Consulting Analyst

Protein, protein everywhere. High protein is usurping high fibre, which makes little sense, at least from a public health point of view. Consumer perception that a high-protein intake is healthy and essential for achieving and maintaining an optimum body weight has been drowning out the message that fibre-rich whole grains have much to offer on multiple health fronts, including weight management. The immediate future belongs to protein-fibre combination products, but in the long term, fibre is destined to regain the upper hand. 

Protein pushes grains off the plate

Right now, it seems, all that consumers want is protein, while carbohydrate-rich grains, whole or otherwise, are low down on the list, for the simple reasons that cereals are low in protein, while animal-derived products, such as dairy, eggs, meat and fish, by contrast, offer plenty of this fashionable nutrient. Grain-based foods have just as many calories as protein foods, and in a tussle for plate space, it is grains that are losing out in the current climate. The unfortunate fact that animal-derived foods are devoid of fibre does not seem to concern consumers all that much at the moment. 

Continue reading "Fibre vs Protein: Which Will Be the Winner?" »

BRIC Consumers in 10 Charts

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In 2015 BRIC consumers will be responsible for almost one-in-five US$ spent globally. But where do their differences and similarities lie?

In 2014, the average Brazilian consumer spent seven times more than the average Indian consumer:

1. Per Capita Consumer Expenditure in BRIC: 2014

Consumer Expenditure 2014

Source: Euromonitor International from national statistics/Eurostat/UN/OECD

 

In the same year, the average Chinese person was fourteen years older than the average Indian: 

2. Median Age in BRIC: 2014

Median Age

Source: Euromonitor International from national statistics/UN

 

India is the only one of the four countries which will see its share of working age population grow in the coming years:

3. Working Age Population: 2015/2030

  Working Age Population

Source: Euromonitor International from national statistics/UN

Note: Data refer to % of population aged 15-64 years.

 

Despite huge differences in income levels, the proportion of household budgets directed at the essentials of food and housing is surprisingly similar:

4. Proportion of Consumer Expenditure on Essentials v Discretionary Goods and Services: 2014

  Consumer Expenditure on essential goods

Source: Euromonitor International from national statistics/Eurostat/UN/OECD

Note: “Essentials” refer to spending on food and non-alcoholic beverages and housing.

 

The majority of BRIC households own a colour TV, but Chinese and Indian households lag sharply behind their Brazilian and Russian counterparts in terms of car ownership:

5. Household Possession of Selected Durable Goods: 2014

  Durable Goods

Source: Euromonitor International from national statistics/International Telecommunications Union (ITU)

 

In 2015, Indian consumers are the only BRIC consumers living in an era of accelerating economic growth:

6. Real GDP Growth in BRIC in 2013-2015

  Real GDP Growth in BRICs

 

Source: Euromonitor International from national statistics/Eurostat/OECD/UN/International Monetary Fund (IMF)

 

57% of the 500 million babies expected to be born in BRIC between 2015 and 2030 will be born in India:

7. Live Births in BRIC: 2015-2025

  Live Births in BRICs

Source: Euromonitor International from national statistics/UN

 

The extremes of rich and poor are most acute in Brazil. The rich in Brazil earn 32 times more than the poor whereas in Russia the differential is 16:

8. Annual Disposable Income of Decile 1 and Decile 10 Households in BRIC: 2014

  Annual Disposable Income

Source: Euromonitor International from national statistics

 

According to our middle class home survey, 60% of Indian middle class households see their homes as a place for entertaining, compared to just 25% of Russia middle class households. Interestingly, in their spare time, Indian respondents are also the most likely of all BRIC respondents to prefer to spend time at home rather than go out.

9. The Home as a Space for Entertaining: 2013

Space for Entertaining

Source: Euromonitor International Middle Class Home Survey

Note: Question: To what extent do the following phrases describe your home? A place for entertaining. Data refer to those who selected “Exactly like my home” or “Very like my home”.

 

Amongst BRIC consumers, Russians are the least likely to describe themselves as “very healthy”. Perhaps unsurprisingly, a baby boy born in Russia in 2014 only has a 50% chance of surviving to age 65.

10. Personal Health Ratings by BRIC Consumers: 2013

  Personal Health

Source: Euromonitor International Global Consumer Trends Survey

Note: Survey results are drawn from online consumers ranging in age from 15 to 65+ Question: Please rate your personal health level on the following scale, where 0 is 'extremely unhealthy' and 10 is 'extremely healthy'.  Take into account chronic conditions, overall fitness level, dietary habits, and any other health-related factors.  Do not take into account temporary illnesses, such as a cold or the flu.

 

Interested in learning more about how to succeed in emerging markets? Download the free white paper today.

 

Have a question or a thought to add. Leave us a comment below.

May 24, 2015

Top 3 Drivers of Consumer Expenditure in Emerging and Developing Economies

An HodgsonAnalyst Insight by An Hodgson - Income and Expenditure Manager

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With emerging and developing countries accounting for nearly 90.0% of the global population and in the context of sluggish demand growth in developed markets, insight into what drives and shapes demand in emerging markets is vital in helping businesses grow and succeed. Euromonitor International forecasts that between 2015 and 2030, real consumer spending growth in emerging and developing markets will be three times faster than in developed markets. The top three drivers of this long-term gain will be population growth, rapid urbanisation and rising incomes.

Population and Consumer Expenditure in Emerging and Developing Countries: 2009-2030

Consumer-Expenditure

Source: Euromonitor International from national statistics/Eurostat/UN/OECD

Note: Data for 2015-2030 are forecast; Consumer expenditure data are in constant 2014 prices, fixed exchange rates. 

Continue reading "Top 3 Drivers of Consumer Expenditure in Emerging and Developing Economies" »

Whole Foods to Open Low-Cost Chain

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Whole Foods recently announced that the company would be launching a low-cost variant of its existing brand targeted at millennial consumers.  This move is in line with overall trends in the US grocery market, where discount grocers have seen rapid growth over the last few years.  This podcast goes in-depth into the competitive landscape and potential strengths for this new brand.  Listen for complete insights.

Continue reading "Whole Foods to Open Low-Cost Chain" »

Frenemy with Benefits: How can Toys Makers Capitalise on the Rise of Toy Rental in Asia? – Part 2

Jane-NguyenAnalyst Insight by Jane Nguyen - Research Analyst

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As highlighted in the first article, a deep understanding of the factors affecting consumers’ renting behaviour is necessary for toymakers to capitalise on the toy rental trend. In general, consumers choose the rental option if toys have a high price, low usage or take up a lot of space. In Singapore, kitchen sets and playhouses are among the top rented items. Price is not the major concern for local people, but the amount of space these toys occupy really matters. In Indonesia parents often rent bulky toys such as ride-on vehicles and expensive pre-school toys. In Vietnam, branded toys imported from the US, Japan, etc., are high in rental demand as parents do not trust the quality of generic brands in the market.

Toys-and-games-by-category

Note: Preliminary data, based on 11 markets researched

Continue reading "Frenemy with Benefits: How can Toys Makers Capitalise on the Rise of Toy Rental in Asia? – Part 2" »

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Recent Posts

The Growth of Affordable Small Appliances in Emerging Markets

Euromonitor to Speak at FederSalus 2015

Looking Beyond the Obvious in Sub-Saharan Africa, Part 1: Venturing North in Store-Based Fashion Retailing

New Travel Research: Key Findings

Mondelez Aims to Breathe Life into Gum Sales with Launch of Trident in China

Fibre vs Protein: Which Will Be the Winner?

BRIC Consumers in 10 Charts

Top 3 Drivers of Consumer Expenditure in Emerging and Developing Economies

Whole Foods to Open Low-Cost Chain

Frenemy with Benefits: How can Toys Makers Capitalise on the Rise of Toy Rental in Asia? – Part 2