Asia’s consumer markets

The mystery of the pyramids

Ross O’BrienDecember 2010

The history of the future

The global growth gap

GDP Growth% change, p.a.

forecast

Source: The Economist Intelligence Unit

-4

-2

0

2

4

6

8

10

2007 2008 2009 2010 2011 2012 2013 2014

Asia

Asia (ex Japan)

Latin America

Sub-Saharan Africa

West Europe

World

Asia’s progressSlowed by the ‘global drag’ in 2011—but far from stopped

Source: The Economist Intelligence Unit

-8

-6

-4

-2

0

2

4

6

8

10

12

14

China

Hong Kong

India

Indon

esia

Japa

n

Mal

aysi

a

Philipp

ines

Singap

ore

South K

orea

Sri Lan

ka

Taiwan

Thaila

nd

Vietn

am

GDP Growth% change, p.a.

200920102011

-7.5%

-5%

-2.5%

0%

5%

2% 4% 6% 8% 10%

Growth in Private Consumption2010-2014

Re-balancing, where it counts

China$3.8trn

Value of domestic private consumption, 2014(US$bn unless stated otherwise)

India$1.4trn

Singapore$111S Korea

$724Japan

$3.4trn

Thailand$208

Malaysia$159

Taiwan$323

Indonesia$604

Vietnam$110

Philippines$213

Hong Kong$166

Source: The Economist Intelligence Unit

-10%

2.5%

Increase in private consumption/ % of GDP2010-2014

Asia has headroom

Private Consumption per head, 2010

US$

Source: Economist Intelligence Unit

Brazil

IndiaIndonesia

Russia

Turkey

2000

4000

6000

8000

10000

12000

14000

16000

1000 2000 3000 4000 5000 6000 7000 8000 9000

China

Median household income, 2010

US$

25000

60000

Japan

0% 10% 20% 30% 40% 50%

Brazil

China

India

Indonesia

Japan

Russia

Turkey

Percentage of consumer expenditure on:

Household goodsFood

Asia’s F&B growth trajectory

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

200

5 2

006

200

7 2

008

200

9 2

010

201

1 2

012

201

3 2

014

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Austra

lia

China

Hong

Kong

Indi

a

Indo

nesia

Japa

n

Mal

aysia

North

Am

erica

Philipp

ines

Singap

ore

South

Kor

ea

Taiwan

Thaila

nd

Rest of world

Asia

Latin America

2005

2010

2014

Source: EIU

Consumer sales of food, beverages & tobacco per capita

US$

Retail food sales

US$m

$75k+

$50k-$75k

$35k-$50k

$25k-$35k

$15k-25k

$10k-15k

$5k-$10k

$3k-$5k

$1k-$3k

<$1000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Number of households with annual income by EIU bracket (000s)

Vietnam

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Asia

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Malaysia

How fast the trickle-down?

050,000

100,000150,000200,000250,000

300,000350,000400,000

450,000500,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

China

Fast, ForwardAsia is becoming the new centre of global economic gravity...(relatively)

GDP, purchasing power parity (PPP) US$ trn. 2020.Source: Economist Intelligence Unit, Country Data.

0

5,000

10,000

15,000

20,000

25,000

30,000

Ch

ina

US

Ind

ia

Jap

an

AS

EA

N

Ger

man

y

Bra

zil

Ru

ssia

Fra

nce

Mex

ico

UK

2008

2020

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

2010

2012

2014

2016

2018

2020

Asia

China

Hong Kong

Taiwan

USA

GDP per capita @ PPP

China’s fleeting youth

Source: EIU

Population 15-19

Population 20-24Population 75+

0

20

40

60

80

100

120

140

160

180

200

China (m)

Source: EIU

Average real wages % change pa

-6

-4

-2

0

2

4

6

8

10

12

14

16

2007 2008 2009 2010 2011

China

India

Indonesia

Malaysia

Philippines

Thailand

Vietnam

Chinese consumers still knitting their own safety nets

Belying confidence—or underscoring it? The EIU’s 1q2010 survey of over 2,500 Chinese consumers found over 90% optimistic about the future—but they still save a third of their income for rainy days.

The spectre of inflation turns into actual threats

CPI% change pa

0 10 20 30 40 50

China

Hong Kong

India

Indonesia

Japan

Korea

Malaysia

Philippines

Singapore

Taiw an

VietnamFuel

Food

Source: The Economist Intelligence Unit

Inflation outlook shows upside risks

on-going worry for Asia’s policy makers and decision-makers

2

4

6

8

10

12

China

South K

orea

Philippin

es

Indones

ia

Vietn

am India

Pakis

tan

Contribution to CPI

%

2010

2011

2012

Are we prepared for the mega-urban future?

Cities in China with populations over 1m

1990 2000

100

200

300

400

2050

Sources: EIU, UN

Source: enchantingchallenge.com