Research Institute
Thought leadership from Credit Suisse Research
and the world’s foremost experts
March 2016
Emerging Consumer
Survey 2016
Editorial
We are delighted to publish the sixth edition of
the Credit Suisse Research Institute’s Emerging
Consumer Survey, a project refecting the results
of nearly 16,000 detailed face-to-face interviews
with consumers across the nine major emerging
economies of Brazil, China, India, Indonesia,
Mexico, Russia, Saudi Arabia, South Africa and
Turkey. In conjunction with this publication, our
investment bank research analysts publish the
EM Consumer Playbook, which focuses on
related investment recommendations.
With investor sentiment now showing signs
of improvement in emerging markets, our study
provides investors timely insights with regard to
the powerful theme of a fast-developing con-
sumer culture shaped by technological innova-
tion. Should there be doubt as to the signifcance
of the story, our analysis suggests that nearly
100 million new households in our survey coun-
tries have found their way into middle-class terri-
tory in the last two years.
These signs of improvement do of course
come after a torrid 2015 for investors in the
region, and our barometers of consumer conf-
dence refect this. The percentage of our respon-
dents who now consider it a good time to make
a major purchase has fallen by 10% against a
year ago. Similar indicators for Brazil and Russia
have dropped sharply. The countries that top our
Emerging Consumer Scorecard are India, China
and Saudi Arabia. Supportive momentum to per-
sonal incomes is the common factor.
The weakest countries (Brazil, Russia and
South Africa) shared a diffcult economic cocktail
of weak currencies, commodity exposure and
political risk in 2015. We show how a weak cur-
rency is negative for consumer confdence.
Hence, a revival in fortunes of the countries above
and ongoing support for emerging consumers
rest more widely on the stability of their curren-
cies in 2016. The good news is that the improving
relative growth projections for emerging markets
coupled with currencies that seem intrinsically
undervalued suggests this can be the case.
We also fnd that the rise of the emerging
consumer is defned as much by age as nation-
ality. In nearly every survey country, the income
prospects of the youngest age brackets are the
most optimistic. When we drill down into how
this youthful dollar is spent, a “lifestyle” theme
emerges and specifcally one of a growing
healthy lifestyle. “Premiumization” is the other
watchword to come through in our interviews.
The ongoing sharp growth in e-commerce activ-
ity and the developing “sharing economy” pro-
vide a broader backdrop. In e-commerce specif-
ically, we illustrate how online retail markets
across the key countries surveyed can more
than triple annual revenues to reach USD 2.5
trillion by 2025.
Finally, a legitimate question to pose is
whether the structural themes we seek to draw
out here actually matter for an investor amid eco-
nomic stress. Clearly, the tailwind of a cycle on
the upswing and a healthy degree of risk appe-
tite are optimal. However, if investors had simply
exited emerging markets as relative growth
momentum began to fag in 2010, a fve-fold
increase in the online penetration of retail sales in
China would have passed them by, as would the
opportunities from the rural transformation in
India and successive years of growth in health-
care provision.
Even when the cycle is a challenge, structural
themes can and do still deliver. We believe this
year’s Survey and Playbook should continue to
provide an instructive guide for investors.
Giles Keating, Vice Chairman of Investment
Solutions & Products, Credit Suisse
Stefano Natella, Head of Global Markets
Research, Credit Suisse
Richard Kersley, Head Global Thematic
and ESG Research Global Markets,
Credit Suisse,
richard.kersley@credit-suisse
Michael O’Sullivan, Chief Investment Offcer,
International Wealth Management,
Credit Suisse,
michael.o’sullivan@credit-suisse
For more information, please contact
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Emerging Consumer Survey 20162
02Editorial
04The emerging
consumer in 2016
13Who’s got the
purchasing power
22A life on-line
33 Country focus:
China’s young adults
38The EM travel guide
44“Pharmerging” markets
52Brands and the
emerging consumer
in 2016
56 India – a “premiumization”
story
60Country profles
62 Brazil – Another tough year
ahead
64 China – The young
emerging middle class
66 India – Top of the scorecard
68 Indonesia – Losing its
shine
70 Mexico – A growing
consumer culture
72 Russia – Macro pressures
intensify
74 Saudi Arabia – Consumer
sentiment resilient to lower
oil prices
76 South Africa – Multiple
challenges
78 Turkey – Moving up the
rankings
81About the survey
82Imprint
83Disclaimer22
44
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3Emerging Consumer Survey 2016
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