Emerging markets are providing significant growth opportunities for fast-moving consumer goods businesses, according to a white paper produced by economic forecaster The Economist Intelligence Unit and research firm Mintel.
The collaborative white paper, Convergence With Divergence—which analyzes how household spending in China, India, Mexico, Turkey and South Africa will change in comparison to the U.S. and U.K. over the next three years—says consumer spending in these emerging markets is expected to grow between 7.7% and 15.2% a year between 2013 and 2016 compared with 4.5% in the U.S.
In the U.S., the report cites several trends including a prediction that alcohol's boom spurred by growth in sparkling wine isn't expected to last and will flatten out in the next three years. Clothing, beauty, personal care and household products are expected to bounce back, with beauty in particular experiencing a resurgence. It also says the nonalcoholics market is set for a rebound, up to over 3% annually, as carbonated drinks benefit from new innovations.
Key findings for each of the markets analyzed include the prediction that China is likely to see a growth in laundry detergents due to growth in washing machines (grown from 1% of rural households in 2000 to 16% in 2010). Also noteworthy is that India’s prepared food market has more than doubled with cereal consumption increasing. Household products are expected to grow by over 20% a year in the forecast period. In addition, South Africans are acquiring more expensive tastes in drinks and coffee is expected to see an annual growth of 8.8% a year.