Industry Impact of Consumer Trends in Emerging Asian Markets
The Asian economy has often been cited as one of the key motors of global trade. After the financial crisis of 2008, however, the real economy took a strong hit, and many international players withdrew their attention from the region, focussing instead on their diminishing sales at home. 10 years later several emerging markets are again entering the spotlight with rapid economic growth, and the fast pace with which local consumers adopt global trends. Although many such markets still present risks and face instability, Euromonitor International has outlined Bangladesh, Sri Lanka, Myanmar, Cambodia and Laos as some of the most promising for the future.
The economic structure of all emerging markets in the region look similar. All economies, and especially those of Laos and Bangladesh, are primarily agricultural. In Bangladesh farming accounts for around two-thirds of the labour force, and around a third of GDP. Many people involved in agriculture remain deeply impoverished, and are very conservative in their consumption habits.
All five markets in question have recently witnessed a rapidly-growing middle class, especially in the large metropolitan areas of cities such as Dhaka, Colombo and Phnom Pen. The new urban consumers are quickly and enthusiastically adopting global trends, often spurred by social media. Regional trends are also rapidly adopted through the fast-growing popularity of Korean pop music, Bollywood movies and Western TV series. With the opening of borders, more wealthy consumers have the chance to travel, while more economic migrants spend at least some period living and working abroad. This allows an increasing number of consumers from all layers of society to experience global consumer trends first-hand abroad, and bring their new knowledge and habits back home with them.
Over the forecast period, economic growth is expected to be underpinned by strong investment activity and gradual policy reforms. Economic imbalances, however, will also rise. All of the five focus markets are in a strategic location, and their proximity to the dynamic regions of East and Southeast Asia should serve them well, as manufacturers move around the region in search of lower labour costs. Their economies, however, remain on a narrow base, depending almost exclusively on energy and agriculture. Yet all of these countries have a young labour force and could benefit significantly from their strategic location in a dynamic region.
Potential investors in these five markets face several major obstacles. Countries such as Laos, Myanmar and Cambodia are some of the region’s most impoverished, following years of civil war, social instability and international isolation. Although those days are now in the past, many of the countries maintain only weak financial and trade links with the West. Sometimes this is determined by the political stance of local regimes. Laos, for example, is one of the world’s few remaining communist states, and coincidentally one of East Asia’s poorest countries.
This e-book aims to provide an overview of the main consumer trends in the region and address some of the challenges that fast moving consumer goods (FMCG) market players face as they attempt to expand their presence in these five emerging markets.
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