The economic slowdown has failed to dim consumer optimism in developing markets like China and India.
A Boston Consulting Group (BCG) study has found that while consumers in developing markets like Brazil, China and India plan to tighten their belts in the near term, their long-term outlook remains far more bullish than that of consumers in richer economies.
It says that recent economic challenges are prompting many consumers in Brazil, China and India to trim their spending plans in the near term. Nevertheless, consumer spending in these rapidly developing economies (RDEs) is still growing faster than in developed economies.
And more consumers in these economies are trading up to higher-priced products, especially those with established brand names and in categories such as fresh foods and home appliances.
When it comes to the longer term, consumers in this economies feel far more financially secure and confident about the future than people in richer – but less dynamic – developed economies.
An average of 72 per cent of respondents in Brazil, China and India said that they are optimistic about the future – compared with only 48 per cent of consumers surveyed in developed economies.
And an average of 55 per cent of consumers in the three RDEs, but only 35 per cent of those in developed economies, reported that they feel “financially secure”.
Nearly twice as many consumers in RDEs as in developed markets said that “every year, there are more I things I want to buy”.
BCG also found out that the power of brands remains strong in emerging markets. Seventy per cent of consumers in China and 67 per cent of those in India cited “brand name and reputation” as a key reason for trading up.
