A rising population with higher education goes hand-in-hand with a shift toward more sophisticated job sectors. This, in turn, drives rising levels of disposable income. This video examine causation, trends and specific markets experiencing the highest growth rates in consumers pursuing advanced degrees.
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EMEs will face a diverging growth outlook in 2015, while continuing to lead the global growth momentum. Low fuel prices will benefit energy-importing countries thanks to savings to countries and consumers and narrow current account deficits, but it will depress the revenues of commodity-exporting emerging countries. Meanwhile, increased volatility in capital inflows and currency, and further geopolitical destabilisation in some countries/regions remain the major risks for EMEs.
- In 2015, annual real GDP growth in 25 key EMEs is forecast to increase by 4.4% (fixed US$ constant terms), marginally up from 4.3% in 2014. While growth is expected to pick up in some emerging countries thanks to falling oil prices and an improving US economy, fragilities in the global economy and existing weaknesses will affect other countries’ growth prospects;
- Apart from global oil prices, China’s slowdown, the prospects of interest rate hikes in the USA and geopolitical risks are the major factors impacting the growth outlook of EMEs in 2015. China’s slower growth will have knock-on effects on commodity exporters, while a rise in interest rates in the USA will have immediate impacts on some emerging countries’ current account balances and currencies. Turkey’s current account deficit stood at 5.3% in 2014, down from 7.9% in 2013;
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Large emerging market economies will experience mixed fortunes in 2015. Russia is the standout performer, for all the wrong reasons. Much of their success is likely to boil down to their macro-economic fundamentals and reform programmes, with those with large current account deficits on the whole more vulnerable than those without. A key theme for the year will be policy reform with India and Indonesia making a strong start, Mexico is in the midst of a reform programme and even the Brazilian government is beginning to move away from unorthodox policy to a more pragmatic approach.
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Analyst Insight by Hope Lee - Senior Beverages Analyst
For years, liquid concentrates, worth around US$9 billion by retail value in 2014, seemed a neglected small category in the vast soft drinks market, and analysts once wondered if there was any glimpse of life and thought further investments might be questionable. The fact that there is no single brand in liquid concentrates reaching the billion dollar sales mark means the interest of manufacturers is exceedingly lacklustre. However, the economic slowdown or outright recession in some developed markets and new product development seemed to revive the category – the expansion of SodaStream and Kraft’s MiO and the ongoing popularity of Robinsons and Teisseire has put liquid concentrates back in the spotlight again. Some consumers who traded down to liquid concentrates when they were short of cash may well stay within the category, even when their income bounces back. Euromonitor International’s latest data show that the global off-trade volume sales increased by around 3% in 2014, and the category is expected to generate net growth of over US$900 million in 2014-2019. This figure does not seem to offer massive business opportunities compared to juices and energy drinks, but it is still worth looking at where the growth areas are and the state of play of the major companies.
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Analyst Insight by Amin Alkhatib - Alcoholic Drinks Analyst
For the past two years at least, the beer industry’s biggest talk has been about a potential consolidation move between Anheuser-Busch InBev and SABMiller Plc. For banks, the world’s number one brewer buying out or merging with the world number two brewer is a very lucrative financing deal. The latest estimate for financing required by A-B InBev has reached US$122 billion for buying a company valued at almost US$4.8 billion, according to 2013-2014 profits.
It might seem like a shrewd decision for the two brewers to combine, as SABMiller’s biggest competitor is A-B InBev competing in beer markets totalling at over US$20 billion. This is 35% of retail value sales for the British brewer and 15% for the Belgian-Brazilian entity. According to Euromonitor International, the overlap occurs in at least 67 markets, illustrating the degree of market commonality for both companies, as reflected by the bubble size below.
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The Middle East and Africa is the world’s only remaining region with a traditional population pyramid – a wide base, tapering towards the top. The average age is low, having surpassed 20 for the first time in 2009 and in 2015 38.4% of the population will be under 15 years of age. It is a dynamic region and in 2015, six of the world’s 10 fastest-growing economies will be found here.
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Analyst Insight by Karen Van Diesen
The Muslim world represents a key consumer base, with underserved needs and rising spending power. There are approximately two billion Muslims in the world, accounting for nearly 30% of the global population. This share of the general population is set to grow even higher, as the number of Muslims is expected to increase at a pace of 1.4% per year globally. Alongside a thriving Islamic economy, there is growing demand for Islamic fashion apparel. In 2013, the 57 countries that belong to the Organisation of Islamic Cooperation accounted for 7% of total value sales of apparel and footwear. By 2018, this figure is forecasted by Euromonitor International to rise to over 9%.
Muslim fashion apparel is a key area that companies should explore. One reason for this is that there has been a change in mind set over the years. Muslims increasingly see clothing as a way of expressing their fashion sense, along with their religious and cultural values. Unfortunately, Islamic fashion apparel offerings have been limited, and there is no single Islamic brand catering to the fashion needs of the Muslim population globally. Thus, there is an opportunity for modern Islamic fashion brands to be showcased.
Source: Citra Style
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