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April 16, 2014

Vorsprung Durch China: Sales Restrictions in Chinese Cities Will Not Stop Audi Becoming the World’s Best-Selling Premium Brand

Neil-KingAnalyst Insight by Neil King - Automotive Analyst

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There has been a flurry of announcements recently regarding the record sales of Audi, BMW and Mercedes-Benz cars in March and the first quarter of 2014. Better weather in the US, the recovery of car sales in Europe and the later timing of Easter this year are all cited as reasons for the on-going surge in demand for the German premium carmakers’ offerings. Whereas these are all contributory factors, the omission of any reference to the swelling ranks of wealthier consumers around the world who can afford upscale cars, especially in China, is noticeable. After all, it is this ever expanding pool of new consumers in their largest market that will ultimately make Audi the best-selling premium brand in the world. Car sales restrictions in Chinese cities will naturally slow proceedings but Audi’s investments in both its dealer network and local production of compact models is bound to more than compensate.

Two years ago, I discussed the correlation between sales of Audi, BMW and Mercedes brand cars and the development of households with over US$100,000 annual disposable income and the predictions made then still hold up today. First, China became the largest market for the combined sales of Audi, BMW and Mercedes in 2012. In fact, China became the largest single market for Audi in 2011 and for BMW in 2013, with only Mercedes still more dependent on sales in the US and Germany. Second, global sales for the three German premium brands are still on track to easily exceed 5 million units in 2015 – in fact, the 5-million milestone is likely to be reached in 2014 given the recovery in the US and Europe and the continuously rising number of affluent households around the world. Third, despite the model offensives of BMW and Mercedes, Audi’s leadership in China will propel it to become the largest premium carmaker, albeit not before 2015.

Continue reading "Vorsprung Durch China: Sales Restrictions in Chinese Cities Will Not Stop Audi Becoming the World’s Best-Selling Premium Brand" »

April 15, 2014

Diageo Makes Offer for Controlling Stake in United Spirits

Andy TivertonBrownAnalyst Insight  by Andy Tiverton-Brown - Head of Alcoholic Drinks and Company Analysis

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Diageo’s renewed offer to gain a controlling interest in United Spirits confirms its commitment to emerging markets, following a spate of acquisitions over the last 5 years securing access to local brands and all important routes to market. Initial results have been mixed, with sales in the six months to December 2013 softening below expectations, this however is part and parcel of operating in changeable immature markets, over the long term given demographics and economic development this has to be the right strategy.  

Diageo became the largest shareholder in United Sprits in 2012 acquiring a 28.8% stake, exerting considerable influence and gaining a controlling interest has long been anticipated. The attraction for Diageo is clear, by volume India is globally the second largest spirits market behind China and is forecast to experience a 3.5% CAGR between 2013 and 2018, accounting for over 15% of global volume growth. In Diageo’s key whisky category the argument is even more compelling, India is the world’s largest market by volume, almost four times larger than the US in second place. Granted, the vast majority of these sales comprise of low cost local whisky, but there is clear demand for higher value scotch and this will be realised as economic growth continues.  In 2013, only 5% of Indian households had an annual disposable income of over US$10,000, but this still equated to 74million, by 2025 this is predicted to increase to 195million.   

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April 14, 2014

Chinese Cities Lead the Way in Average Household Spending Growth


With Ugne Saltenyte - City Analyst

Six out of the top ten leading cities for household spending growth in 2014 are located in China. The country's rising income levels are creating ideal conditions for spending increase, and businesses in these cities are likely to find growing opportunities for sales in sectors such as communication, education and health goods and services. The top 10 growth cities for household spending will see their average spend expand by 5 to 10 percent in 2014, compared to a worldwide expansion of just 1.2 percent.

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April 13, 2014

China and the US at Odds in Online Games

Rob-PorterAnalyst Insight by Rob Porter - Toys and Games Analyst

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Globally, online games is forecast a gain of more than US$4.7 billion in absolute terms over 2012-2017, making it one of the fastest growing categories in video games. However, not all markets will contribute to this growth. In the US, online games sales have shifted from a subscription payment model to a free-to-play system, hence the country’s weaker forecast. China, however, is anticipated strong growth globally in absolute sales over the coming years as online games there have witnessed a move in the opposite direction, from free-to-play to a subscription model.

Absolute Sales of Online Games in the US and China, 2012-2017

Source: Euromonitor International

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Temasek Buying Watsons Foreshadows Expected Consolidation in Asian Drugstores

Temasek Holdings, an investment firm based in Singapore, recently purchased almost 25 percent of drugstore chain AS Watsons for US $5.7 billion. Watsons has a strong presence across all of Asia and reached sales of US$ 4.9 billion in 2013. As drugstore chain sales continue to grow in Asia, more consolidation and takeovers are expected as well as store expansions and increased product portfolios.

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April 12, 2014

Blueberries the Most Dynamic Fruit in 2013

Simone_BarokeAnalyst Insight by Simone Baroke - Contributing Analyst

Blueberries’ exceptional consumer appeal made them the fastest-growing fruit of 2013, and there is no end in sight for their ardent growth trajectory. Blueberries have a number of coveted characteristics which make them superior to other types of fruit, including a good shelf life, convenience and superfruit status. Strawberries, cherries and grapes may, to date, be more popular in terms of volumes sold, but blueberries have excellent potential for catching up. High price points are still an issue, although this may soon be resolved as producers are making a concerted effort to boost supplies.

Blueberries Have What it Takes

Fresh cranberries/blueberries delivered an outstanding performance in 2013 as the fastest-growing fruit category in volume terms globally. With a growth rate of 9%, the category not only managed to double the gain achieved the previous year but also clocked up triple the growth mustered by fresh fruit overall.

There is no arguing that blueberries are the perfect berry snack. Compared to other popular berries, like strawberries and raspberries, which are highly “squish prone”, blueberries have a long shelf life. Besides washing, they need no further preparation before being consumed. From the consumer’s point of view, in terms of consumption convenience and durability, blueberries are on a par with grapes, which lack the coveted “superfruit” status.

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April 10, 2014

Euromonitor to Speak at WTM Vision Shanghai 2014

WTM_Vision_2014_Shanghai_BlackDate: 8 May 2014

Location:  The Howard Johnson Plaza, Shanghai

Presentation: Fangting Sun, Research Analyst at Euromonitor International, will offer a presentation on the Consumer Trends and Forces Driving Change in the Travel Industry globally and in China.

The global economy is on the mend and arrivals grew again in 2013 at a rate of 4%, reaching record numbers of over one billion world-wide. The Middle East and Africa demonstrated the highest growth despite continued instability and Asia, especially China, remains a key driver of demand. As smartphones become an indispensable part of modern-day life, travel companies offer consumers an increasing number of services for purchasing, researching and experiencing travel. Online and mobile developments enable consumers to bypass traditional distribution, with the sharing economy going from strength to strength. 

Chasing China outbound potential is a global phenomenon with double-digit annual departure growth too tempting to resist. Yet as a destination China suffers from weak demand following the global slowdown, increased competition and high pollution levels. China’s unique and dynamic online marketplace offers opportunities for travel players to engage with the increasingly connected Chinese consumer.

Conference:  Now in its 6th year, the WTM Vision Conferences will continue to offer you the ultimate learning experience and unrivalled networking opportunities, best practice advice and case studies from top travel brands as well as including an insightful panel session.

For more information and to register please click HERE: http://www.wtmlondon.com/page.cfm/Link=57/nocache=03042014

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April 9, 2014

Thailand had Biggest Growth in Foreign Debt Globally from 2008-2013

Foreign Debt Growth Map

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Foreign debt is debt owed by a country to another. High levels of foreign debt can be riskier than domestically owned debt, due to the increased risks of contagion. Thailand had the biggest growth in foreign debt from 2008-2013, rising by 483% in real terms due to a boom in outward foreign investment from Thailand. Burundi’s declined by 76.1% in the same period, the biggest globally, as much of its debt was written off in 2009.

Learn more about our Economy, Finance, and Trade research: http://www.euromonitor.com/economy-finance-and-trade

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April 8, 2014

Do Business Opportunities Exist Outside the Largest Cities in BRIC Countries?

UgneSaltenyteAnalyst Insight by Ugne Saltenyte - City Analyst

View Ugne Saltenyte's profile on LinkedIn

Over the last decade, the role of megacities has been rising in BRIC countries. Shanghai, Moscow and Delhi hosted larger shares of their respective countries’ populations in 2013 than they did in 2005. Such growth did not go unnoticed by international companies, which often target the largest metropolises when aiming to establish themselves in BRIC countries. Yet, these countries still possess a number of unexploited opportunities outside their traditional urban markets in emerging smaller (second-tier) cities.

Average Household Income in BRIC Cities, US$ Per Household in 2013

Source: Euromonitor International

Note: The largest cities refer to the most populous cities within the respective country, as of 2013. The most affluent cities refer to cities with the highest average household annual disposable income in the respective country, as of 2013

Continue reading "Do Business Opportunities Exist Outside the Largest Cities in BRIC Countries?" »

Fast-Processing to Support Spectacles Market in Singapore and Asia-Pacific

Euroasia_peiying.loh_LThumbWith Pei Ying Loh, Research Analyst

Contact lenses are growing faster than spectacles in Singapore as consumers view contacts as more stylish and convenient than spectacles. Consumers in Singapore are fashion conscious, and manufacturers can regain sales by marketing spectacles as a fashion accessory. The company Owndays has already started catering to this trend using a ‘fast-processing’ method allowing consumers to walk out the door with stylish frames and prescription-based lenses in hand. Euromonitor expects the fast-processing trend to expand to other countries in the Asia-Pacific region as consumers search for convenient, fashion-sensible spectacles.

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Recent Posts

Vorsprung Durch China: Sales Restrictions in Chinese Cities Will Not Stop Audi Becoming the World’s Best-Selling Premium Brand

Diageo Makes Offer for Controlling Stake in United Spirits

Chinese Cities Lead the Way in Average Household Spending Growth

China and the US at Odds in Online Games

Temasek Buying Watsons Foreshadows Expected Consolidation in Asian Drugstores

Blueberries the Most Dynamic Fruit in 2013

Euromonitor to Speak at WTM Vision Shanghai 2014

Thailand had Biggest Growth in Foreign Debt Globally from 2008-2013

Do Business Opportunities Exist Outside the Largest Cities in BRIC Countries?

Fast-Processing to Support Spectacles Market in Singapore and Asia-Pacific