emerging consumer survey 2012

7/30/2019 Emerging Consumer Survey 2012

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Emerging Consumer

Survey 2012

January 2012

Tugt eadersip frm Credit Suisse Researc

and te wrds fremst expertsResearc Institute

Emergig Maret


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Tabe fcntents3 Editorial

4 The consumer in 2012

5 Two-fold ratioale for overall

declie i otimism

7 Cyclical eadwids slow discretioary

sedig

11 Te aetite for tecology

12 Te role of brads

12 Wo are te wiers?

14 Mergers ad acquisitios

14 Tradig u: Ubraded to braded

ad beyod

17 Structural wiers ad structurally

calleged

20 Brazil

Livig for today

22 China

A savigs culture

24 Egypt

Cage but o cage

26 India

Goig bac to scool

28 Indonesia

O a fast trac

30 Russia

Te weaest BRIC i te wall

32 Saudi Arabia

Te oil rice edge

34 Turkey

Feelig te squeeze

37 About the survey

39 Imprint/Disclaimer

COvERphOTO:ISTOCkphOTO

.COM/phOTOMORphIC,phOTO:ISTOCkphOTO.COM/ITSSkIn

For more information, please contact:

Micael OSulliva, head of Uk Researc

ad portfolio Aalysis, Credit Suisse

private Baigmicael.o'[email protected]

Ricard kersley, head of Global Researc

product, Ivestmet Baig Researc

[email protected]

EMERGInG COnSUMER SURvEy 2012_2


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EditriaWe are deligted to ublis te secod editio of te Credit Suisse GlobalEmergig Cosumer Survey. At a time we ivestors debate te sesitiv-ity of emergig ecoomies to a otetial recessio i te wester world,te aalysis carried i tis reort, togeter wit te accomayig GlobalEmergig Cosumer Databoo, rovides isigts ot available from ublicsources of ecoomic iformatio to el form teir judgemets.

Te 2012 sure goes furter ta last ears iaugural editio iextedig our sure to eigt coutries Brazil, Cia, Egt, Idia,Idoesia, Russia, Saudi Arabia ad ow Ture. To udertae tis roj-ect, te Credit Suisse Researc Istitute as agai egaged te leadigglobal maret researc firm AC nielse to coduct rimar researc oits bealf, tis ear iteriewig 14,000 cosumers across coutriestat togeter accout for 3.5 billio eole.

Credit Suisse aalysts ave draw out te ey treds ad coclusiosfrom te data. Te survey igligts te ifluece of major icome addemograic differeces ad cultural ad social drivers across te emerg-ig world. Te imortace of uderstadig suc factors could ot bemade clearer ta witessig last years evets i Egyt. Our 2011 surveyflagged acute essimism amog Egytias uderscored by te severeiequalities of icome overlooed by may.

I tis 2012 editio, we fid te emergig maret cosumer stillexressig ealt otimism about te ear aead, wic is ecourag-ig gie te cocers oer global growt. howeer, exectatios areudeiabl more subdued ta last ear. Cofidece imroed i ol

two of te coutries sureed Idoesia ad Egt. Egts recoeris from a excetioall low base toug. I fact, desite te dramaticolitical cage i Egt, te Egtia cosumer still remais te mostessimistic i te sure.

Our survey igligts tree major fidigs: First, our aalysis i tereort suggests two iflueces beid te more cautious toe i 2011 dameed exectatios for wages ad risig food rices. Te cosum-ers i coutries exosed to eiter or bot of tese ave tyically revealedte most cautious resoses. Saudi Arabia is te excetio tat asroved te rule. Looig ito 2012, te cyclical outloo still admittedlyoses cocer for wage exectatios. however, our researc suggeststat te exected ea i food rice iflatio ca deliver a ositive offset

for te emergig cosumer ad el te global outloo.Secod, te sure seds ligt o te structural treds at woramog cosumers i te emergig world. A moe awa from te esse-tial items of sedig towards more useful ad discretioar items issowig a structural cage i cosumer. Two areas ae stood out tatare smtomatic of tis tred - a icreased riorit o educatio adte icreased eetratio of tecolog, suorted b strog growt imobile oes, smartoes ad comuters as well as icreasedaffordabilit ad ig-seed iteret access.

Tird, our reort rerises a teme te Researc Istitute aalzed ite 2010 reort Te power of Brad Iestig. I our ew sure, weloo i detail ito te growig sigificace of local brads ad teimact of te most owerful global brads. Were do local ad regioal

brads old te greater tractio ad ae growt otetial? Could tebe a focus for te acquisitie Wester coma? Were could tebecome te ew global stadard?

Stefano Natella, head of Global Equit Researc, Iestmet Baig

Giles Keating, head of priate Baig Global Researc



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Te cnsumer in 2012Our sure suggests tat cofidece amog emergig cosumers is stillreasoabl strog. Of just oer 14,000 adults icluded i te sure acrosseigt marets, 35% tougt teir ersoal fiaces would imroe oerte ext six mots ad 9% exected some deterioratio. howeer,comared to last ear, cosumer cofidece is ot as strog as igeriflatio ad slower growt ae tae teir toll.


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Otimism o te fiacial outlook is strogest i Bra-zil, Idia ad Cia. I Brazil, 58% of resodets tote survey said tey exected a imrovemet i teirersoal fiaces over te ext six mots. Te Rus-sia cosumer is te most essimistic of te BRICcoutries.

At te oter ed of te scale, te greatest degree ofessimism i fiacial rosects was recorded i Egtad Ture. Desite te radical cage i te oliticalsituatio, Egtia cosumers remai te most dow-beat amog te coutries icluded i our sure, wit25% redictig a worse fiacial ositio oer te extsix mots comared to 24% exectig some imroe-met. Te icture i Ture was ot muc better: 12%of resodets exected teir fiacial ositio toworse ersus 16% wo exected it to imroe. Wewe comare te aggregate results i our latest surewit last ears sure, tere is o doubt tat cosum-ers, o aerage, are less otimistic. I Brazil, te bal-ace of cosumers exectig better rater ta worsefiacial rosects oer te ext six mots as fallefrom 59% i 2010 to 53% i 2011. I Cia, tesame statistic as slied from 39% to 31%, ad iIdia it as falle from 40% to 36%. Te mood asimroed i ol two of te marets. I Idoesia, a et31% ow exect ersoal fiaces to imroe oer teext six mots comared wit 28% last ear. Wilete Egtia cosumer is muc more ubeat com-ared wit last ear, tis is clearl off a er low basead still oor i absolute terms (Figure 2).

Tw-fd ratinae fr vera decine in ptimism1. O aerage, tere as bee a moderatio i futurewage exectatios comared wit last ear. As weillustrate i Figure 3, i te most recet sure com-ared wit last ears sure, wage exectatios for teext 12 mots ae declied cosiderabl i Brazilad ae edged dow i Cia. Wage exectatiosae iced u i Egt, but, as wit most idicatorsfor Egt, tis comes from a er low base. howeer,te oe maret were tere as bee a clear rise iwage exectatios is Saudi Arabia. Arguabl tisreflects te icrease i social sedig rograms ad

te rise i te miimum wage tat te autorities aeursued i te wae of te olitical ueaal i oternort Africa ad Middle Easter marets. Tisicrease i otimism i Saudi Arabia is te obiousbrigt sot i wat is oterwise a somewat more sub-dued cosumer stor o aerage.2. Food iflatio as also ad a sigificat imact ocosumer setimet. We we comare te roor-tio of exediture tat is directed towards foodagaist te otimism embodied i exectatios o testate of ersoal fiaces, a clear atter emerges.Te least otimistic (cosumers i Egyt) allocate over40% of teir total icome toward food exediture,

te most otimistic (i Brazil) ave te lowest relativeexediture o food.

Figure 1

D yu tink te state f yur wn persnanances ver te next six mnts wi be better,wrse r abut te same?

Source: Credit Suisse Emergig Cosumer Survey

10

20

40

30

90

80

70

60

50

100

Brazi l I ndia China SaudiArabia

Indonesia Egypt Russia Turkey

Better About the same Worse

37

58

5

5051 60 63

51

67

72

43

7

36

4

34

3

25

24

24

8

16

12

40

9

0

Figure 2

D yu tink te state f yur wn persnanances ver te next six mnts wi be better,wrse r abut te same? 2011 versus 2010 resuts

Source: Credit Suisse Emergig Cosumer Sure

10

-10

20

-20

40

30

-30

60

50

70

Brazil India ChinaSaudiArabia

Indonesia EgyptRussia Turkey

Better less worse 2011 Better less worse 2010

53

59

3640

32 32 31

39

31

28

16 17

4

NA1

-26

0

Figure 3

Percentage expecting better ess wrse usedincme in 2011 versus expectatins in 2010


10

20

40

30

60

50

70


Indonesia Egypt Russia

2 011 2 010

55

40

47

58

39 38

35 36

24

18

22 22

58

66

0

phOTO:ISTOCkphOTO.COM



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Clearl, food rice iflatio as egatiel imactedcosumer setimet. Te extet of te recet foodrice iflatio felt across te emergig ecoomies isillustrated i Figure 4. B our calculatio, te aualrate of food rice icreases for te emergig maretsi aggregate was ruig at 6.6% (i te 12 motsedig Setember 2011) ad tis comes o to of8.0% i te ear before tat. Tis uts food iflatiofor te last two ears well aboe te 10-ear aerageof just 4.5%.

Wat next?

Ecoomic mometum, o average, looks likely tocotiue to slow. Give tat te exort to grossdomestic roduct (GDp) ratio for te emergig eco-omies is a relatively ig 35%, tey are ievitablygoig to feel te eadwids of te slowdow adcotractio i key develoed markets. As we illustratei Figure 5, emergig markets ave cosistetly aver-aged iger growt rates i idustrial roductio overte ast decade but are clearly ot ideedet ofdeveloed market treds. Te most recet pMI read-igs are cosistet wit some cotractio i idustrial

or maufacturig roductio for bot te G4 ad teBRIC ecoomies i te mots aead (Figure 6). Tissuggests tere is a risk of furter sliage i omialwage exectat ios over te ext year across our sur-vey markets ad tus ressure remaiig o cofi-dece.

Figure 4

Weigt f fd expenditure versus ptimism npersna nances utk


10

-10

20

-20

40

30

-30

60

50

70

10% 15% 20% 25% 30% 35% 40% 45% 50%

% respondents with expectations of better less worse personal finances

Food expenditure as % total income

0

China 2010

Brazil 2010

Brazil 2011

China 2011

India 2010

India 2011

Saudi Arabia 2010

Saudi Arabia 2011 Indonesia 2010Indonesia 2011

Russia 2010 Russia 2011

Turkey 2011 Egypt 2011

Egypt 20102011 Survey2010 Su rvey


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phOTO:ISTOCkphOTO.COM/

ILBUSCA

Figure 5

Emerging versus deveped market industriaprductin (% YY)

Source: Credit Suisse researc

5

10

-10

-5

-15

-20

20

15

25

Jan 90 Jan 93 Jan 96 Jan 99 Jan 02 Jan 05 Jan 08 Jan 11

Developed markets

0

Emerging markets

45

50

35

40

30

55

60

97 99 01 03 05 07 09 11

G4 BRIC

Figure 6

G4 versus BRIC aggregate PMI eves

Source: Credit Suisse researc

Figure 7

Emerging market fd inatin versus te CRBFdstuffs index (% YY)

Source: Tomso Reuters, IMF, CRB, Credit Suisse researc

6%

8%

2%

4%

-2%

0%

10%

12%

-30%

-20%

-10%

0%

60%

50%

40%

30%

20%

10%

Dec 95 Dec 98 Dec 01 Dec 04 Dec 07 Dec 10

GEM food inflation (Ihs) CRB Foodstuffs Sub-index (rhs)

Te good ews is tat te iflatio sceario is set tobecome sigificatl more suortie oer te motsaead. We fid tat te atter of emergig maretfood iflatio fits well wit cages i soft commoditrices (as roxied b te CRB Foodstuffs idex). TeCRB idex is alread dow 5% sice te start of 2011ad, assumig rices remai flat from ere, te imli-catio is for egatie readigs i aual rates ofcage oer te ext six mots, gie te er igbases establised i h1 2011. Te imlicatio is tat

aerage emergig maret food iflatio is liel to fallto low leels, i te regio of 0%1% for h1 2012.

Cycica eadwinds sw discretinary spending

Te e structural teme tat uderis te outloo foremergig marets is ow icome ad demograicdriers could cage te mae-u of cosumer sed-ig i tese ecoomies i ears to come. Cosumersedig, wic as bee eail focused aroudmore essetial areas of sedig, is liel to cotiueto sift to te more discretioar bias tat tifies tedeeloed world. Tis is te atter tat as ticall

laed out across te deeloed marets troug telast cetur.

Aggregate emergig maret GDp er caita owstads at USD 7,600 i urcasig ower arity (ppp)terms. Over te ext five years, te IMF forecasts tattis will icrease to USD 10,100. Te USA, Frace ad



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Jaa saw similar cages i te level of teir GDp ercaita i te 1930s, te 1950s ad te 1960s, resec-tively. If we loo bac at te sifts i teir sedig at-ters durig tis trasitio, it is clear tat growt isedig o te more discretioary items was far stro-ger ta te growt i exediture o basic essetials.

Figure 8 serves to illustrate tese treds.We ca see tat growt i olume demad for

essentia items (suc as food ad beerages adutilities) was, o aerage, still ositie, but ot asstrog as te growt i discretioar sedig. Co-sumtio of wat we migt describe as usefu items(suc as trasortatio, educatio, fiacial serices orealtcare) roed to be muc more sesitie to terisig icome leels. We ote tat strog growt iouseold demad for commuicatio serices largelreflected te sift i tecolog tat was taig laceat te time, as well as te substatial declie i ricestat too lace as te tecolog gaied scale. Ideed,te fall i commuicatio costs to date ow meas tatte atter of demad for basic mobile serices is ermuc i lie wit tat of oter essetial utilities. Weoted tat te data from te sure last ear cofirmedtat similar atters of cosumer exediture were is-ible across te emergig ecoomies. Tese treds arestill clearl isible i te data from te recet sure.

Demad for small-ticet, basic essetials (suc asrotei cosumtio or mobile oes) icreases ra-idl from er low icome leels, but beod a aer-age motl ouseold icome of aroud USD 1,000(ppp-adjusted), cosumtio of essetial goods ad

serices teds to stagate i faor of more discretio-ar items. howeer, tis log-term structural siftacross te emergig ecoomies towards greater dis-cretioar sedig as stalled, o aerage, oer teast ear as te slowdow i ecoomic mometumad ig food iflatio as imacted cofidece.

Cosequetl, we we comare te growt isedig rates betwee 2010 ad 2011 for a rage ofgoods ad serices, we ca see tat ouseold co-sumtio cotracted for ma of te more discretio-ar areas of exediture oer te course of te ear.Figures 11 ad 12 illustrate tese cages. I tese

carts, we aggregate te sure results from all temarets to sow ow cosumtio or owersi of dif-feret tes of goods ad serices caged tis earcomared wit last ear.

We nte te reductin ver te curse f te

ast year in average cnsumer expsure t:

Sort soes ad fasio aarel tese sectorsae bore te brut of te declie i cosumer seti-met ad iger aerage food rices. Bot categorieswere dow strogl across earl all of our sure mar-ets, icludig Saudi Arabia were cosumer seti-met still aears to be relatiel strog.

priate ealtcare four out of te see marets(were we ca comare te recet data agaist lastears sure) recorded a declie i te umber ofouseolds wo allocated sedig to riate ealt-care. Teoreticall, tis could siml reflect a imroe-met i state roisio of ealtcare serices. how-

Figure 8

Average* annua rea grwt in te vume fcnsumer expenditure as GDP per capita risesfrm USD 7,500 t USD 10,000

Source: BEA, InSEE, Miistry of Iteral Affairs ad Commuicatios, Credit Suisse researc

* Taig te aerage of growt i te c omoets of real cosumer exediture i te USA

(19361940), Jaa (19611966) ad Frace (19501959). Tese umbers are

aroximate to some extet: differeces i categorizatio i exediture b sector betwee

tese marets limits a more recise calc ulatio.

Figure 9

Mbie pne wnersip


2%

4%

8%

6%

10%

12%

PCE

Com

munication

Transportation

Education

Recreation

Housing

Financial

services

Healthcare

Utilities

Food&

beverages

H

ousehold&

pers.goods

Average annual growth in real terms

4.6

10.4

9.7

7.26.8

6.2 6.2

5.4

4.64.3

3.0

0%

80

90

60

70

50

100

110

0 500 1000 1500 2000 2500 3000

Mobile phone % ownership

Avg monthly household income (PPP, USD)

Brazil China Russia Egypt Indonesia



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Figure 10

Expenditure n entertainment


Figure 11

Percentage f respndents tat ave bugtvarius gds and services in 2011 and te cangeversus 2010


Figure 12

Percentage f respndents tat wn variusgds/assets in 2011 and te cange versus 2010


-2

-1

6

5

4

3

2

1

-3

-4

7

100 20 30 40 50 60 70 80 90 100 120110

Change vs 2010

0

2011% respondents that own/have access to each itemEx Ch = total excluding China; Ch = China

Ex Ch Mobile phones

Ex Ch Internet accessEx Ch SmartphoneCh Smartphone

Ex Ch Computers

Ex Ch Cars Ch Computers

Ch Mobile phones

Ex Ch Property

Ex Ch Property

Ch Internet accessCh Cars

eer, i ractice, sice te detailed data sow tedeclie was most obious across te lowest icomegrous, it suggests tat ealtcare sedig was for-feited to offset ig food rices. proert owersi also declied o aggregate itis sure ersus te last sure. At te coutr leel,

te data sow tat owersi remaied flat i Ciaad Russia, but declied sligtl i Idia ad Brazil. Asa clear sig of te reailig ecoomic turmoil, roertowersi leels i Egt were dow sigificatl com-ared wit last ear.

Meanwie, cnsumer penetratin rates picked

up n average fr:

Mobile oes tis is redomiatl drie b terise i owersi across te lower icome marets(Idia, Egt, Idoesia ad Brazil). Growt rates co-tiue to old te greatest otetial i Idoesia (29%of our samle still do ot ae a mobile oe) fol-lowed b Egt (15%) ad Ture (11%). Smart oes at te oosite extreme to te basicmobile oe, te iger icome marets ae beete e driers of te rise i owersi of smartoes. Saudi Arabia tos te list wit a eetratiorate of 68% (a 22% icrease o last ear). Te suresows tat smart oes ae also roed oular iBrazil ad Cia. Comuters ad iteret access ae also ejoedstrog growt i eetratio rates oer te ear. Iter-estigl, tis as ot bee drie b Cia (were com-uter owersi ad iteret access is alread rela-

tiel ig). Istead, te e driers oer te last earae bee Brazil ad Saudi Arabia. Cosmetics demad aears to ae iced umargiall oer te last ear. Closer isectio of tedata sows tat te low icome grous i Brazil wereimortat driers of tis tred. Tis follows te well-establised sedig atters of te iger icomegrous i Brazil. Te coutr as a wole as oe of teigest recorded sedig rates o cosmetics adsicare (86% of our samle said te ad set otis item i te ast tree mots) i cotrast to Cia,wit oe of te lowest rates (ol 43% of our Ciese

samle said te ad set moe o cosmetics oerte same eriod). Educatio a more sigificat roortio of reso-dets i six out of seve markets said tey adallocated moey to rivate educatio courses tisyear comared wit last year. Te excetio wasEgyt were te ecoomic disrutio as clearlyudermied routies. But, Egyt aside, it is remark-able tat te growt i educatio is so cosistetacross markets tat differ so muc i terms of co-sumer referece i so may oter areas. Ad more-over, tat educatio icreased i rioritizatio i ayear tat was far from suortive from a cyclical er-

sective. Tere is a substatial weigt of istoricalevidece tat suggests tis strategy is igly likely toay ecoomic divideds ad deliver sustaiably igerGDp er caita i te log ru. Tus, tis stroglyuderis te cotiued outerformace of emergigmarket ecoomic growt.

200

300

100

0

400

500

0 300020001000 4000 5000 6000 7000 8000

Monthly spending on entertainment (PPP, USD)


Brazil China Russia

-2

2

-4

-6

-8

4

100 20 30 40 50 60 70 80 90 100

Change vs 2010

0

2011% respondents that own or have bought each item

Extra education

Watches

Spirits

Beer

CosmeticsBottled water

Carbonateddrinks

Femininehygiene

Perfume Holidays

Tissues Dairy

Fashion apparelPrivatehealthcare

Jewellery

Sports shoes



10/40


11/40

Te appetite fr tecngy

As oted aboe, te aetite for tecolog across ourcosumer uierse aears to be er strog. how-eer, we ote tat te stregt of tis demad ariesaccordig to icome grou as well as maret. As a

examle, te data sow tat te eetratio of smartoes is greater i te low-icome grous i SaudiArabia ta it is for te ig-icome grous i Brazilad Russia. Te owersi of comuters is iger forte mid-icome bracets i Cia ta it is for teig-icome bracets i Saudi Arabia, Russia or Idia.Figures 13 ad 14 illustrate te oit.

Te pssibe expanatins fr tis are treefd:

1. Stregt ad soisticatio of te distributio et-wor te greater tis is, te iger te eetratiorate. Cur rates are oe otetial idicator of tescoe ad reac of te distributio etwor. Our sur-e data sow tat were mobile ad smart oeeetratio rates are igest, a mobile adset as arelatiel sort life (ol 14 mots o aerage i SaudiArabia). I marets were oe eetratio rates arelowest, te aerage legt of time tat a adset isowed is muc loger (22 mots o aerage i Rus-sia ad 24 mots i Idia).2. Relatie rices are a obious factor to exlai rela-tie eetratio rates. Te realece of low-costsmart oes i Cia ad te cometitie ature oftat maret as arguabl boosted cosumer access tote roduct.

3. Relatie deelomet of broadbad ifrastructureels exlai comuter owersi. We fid tere is aclear correlatio betwee broadbad access adouseold comuter eetratio: were broadbadaccess is low (otabl Egt, Idia ad Idoesia) teaerage comuter owersi is also low.

howeer, te structural ositio is ol art of testor. Our sure data also igligt cages i tec-olog cosumtio oer te ast ear. Figures 15 ad16 illustrate some of te mai treds. not surrisigl,we fid tat te fastest rates of growt i stadard

mobile eetratio are i te low icome marets (Idiaad Egt) were eetratio rates are still relatiellow. Growt i smart oe owersi as bee fast-est across te iger icome grous i te igericome marets (otabl Saudi Arabia ad te ricered of te Brazilia cosumer).

Cia as witessed excetioal growt i comut-ers ad iteret access oer te ast te ears. partlbecause tese eetratio rates are ow alread ig,we fid tat growt rates i tis area oer te last earae bee better for te oter marets. Secificall,te sure data sow tat Brazil ad Saudi Arabia aeejoed te strogest tae-u of comuters ad iter-

et access oer te last ear.

Wat next?

Growt i mobile oe eetratio loos set to berelatiel strog i Idoesia (still 29% of our suresamle said te did ot ow a mobile), Idia (6% iph

OTO:ISTOCkphOTO.COM/

kALI9

Figure 13

Percentage f useds (accrding t incmebracket) wning at east ne cmputer


60

80

20

40

0

100

120

0 2000 4000 6000 8000 10000

% households with computers


Brazil China RussiaIndia Saudi Arabia

Figure 14

Percentage f useds (accrding t incmebracket) wning smart pnes


60

70

20

10

50

30

40

0

80

90

0 2000 4000 6000 8000 10000

% households with a smartphone


Brazil China RussiaIndia Saudi Arabia

total ad o mobile risig to 12% at te lower icomebracets) ad Brazil (were 11% of te lower icomegrous ad o mobile).

Mometum i smart oe eetratio is liel tocotiue to be strog i Brazil ad Cia. Saudi ee-tratio rates also loo liel to cotiue uward, albeit

te otetial growt is somewat dimiised b teexcetioall strog tae-u oer te ast ear. Su-ortig factors are (1) growt i real wages ad rela-tiel more otimistic outloo of tese cosumers, (2)size ad affluece of te mid-to-ig icome grous ieac of tese marets, (3) existig mometum (smartoe eetratio icreased b 22%, 11% ad 5% forSaudi, Brazil ad Cia resectiel oer te last ear).

For similar reasos, comuter sales loo liel to bestrogest i Brazil ad Saudi Arabia. Mometum asbee strog i te ast ear but eetratio rates arestill ol 67% ad 63% for tese two marets resec-tiel comared wit 83% i Cia.



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Figure 15

Cange in mbie pne and smart pnewnersip 2011 versus 2010


10

5

-5

15

20

25

BrazilIndia China SaudiArabia

IndonesiaEgypt Russia

Smartphones Mobile phones

-2

4

109

11

8

34

5

1 1 1

22

0

% change in ownership vs 2010

0

Figure 17

Purchases of local brands/dairy as apercentage of total purchases


60

70

20

10

50

30

40

0

80

100

90

0 20001000 3000 4000 5000 6000 7000


BrazilChina RussiaIndia

% of respondents buying local dairy brands

Figure 16

Cange in cmputer wnersip and internetaccess 2011 versus 2010


7

5

4

3

2

1

6

8

9

10


IndonesiaEgypt Russia

Computers Internet access

7

6

9

8 8

7

1

6

1

2 2

1

2

0

% change in ownership vs 2010

0

Te re f brands

Ruig alogside te structural stor of te trasitioof emergig maret cosumtio from essetial itemstoward discretioar sedig, tere are imortatimlicatios for cosumer brads. I last ears sure,

we flagged tree secific temes wic were ermuc aaret i te data. First, at relatiel low leelsof ouseold icome, ubraded goods are a sigifi-cat feature of total cosumtio. Secod, as icomeleels imroe, refereces for braded goods ic u;ad tird, as icome moes to relatiel affluet leels,remium brads attract a greater maret sare. Tradi-tioall, iteratioal brads ae ad te uer adi te remium ratigs wile local brads ae tededto aeal to te lower icome mass maret. Our datasuort tis tesis for most of te goods we sureedat te discretioar ed of te sectrum.

howeer, our sure also sows tat for goods tatcould be classified broadl as essetial items, te ref-erece at iger icome leels for iteratioal bradsoer local brads is ot articularl strog. To illustratetis simle oit, Figures 17 ad 18 lot te relatiedemad for local ersus iteratioal brads b icomebracet for dair ad cars. Te stabilit i te aetitefor a ubraded/domestic essetial item suc asdair across te icome scale cotrasts wit te raiddeterioratio i te brad alue of a domestic car asicome leels become rogressiel iger. Te sameatter ca be see across a large umber of oterroduct categories tat fall ito te essetial ersus

discretioar bracets (for istace, bottled water orerfumes).

We see tree ikey expanatins:

1. Local maufacturers for essetial goods ad sericesalso offer attractie remium brads ad ca cometesuccessfull wit te iteratioals. Tere are umerousexamles of tis, articularl i te dair maret.2. Emergig cosumers are a to stic wit teirlocal brads for essetial items, artl out of iertia,but eras also as te offer o status beefit icosumtio terms.

3. Brad ower for essetial items is ot as strog asit is for discretioar items. Ee iteratioal bradsare ofte mareted o rice ad alue.

Te broad coclusio is tat as icomes cotiue toimrove iteratioal brads offer greater growt ote-tial ta teir local eers i te discretioary sace.however, te growt outloo for local brads sould beat least as good as iteratioal brads for essetialgoods ad services. Tis suggests cotiued strogM&A otetial i te essetials sectors as iteratioalcomaies may be moved ideed i some cases avealready bee moved to acquire tese local brads.

W are te winners?

If tis is te broad icture, wat are te secific illus-tratios of brad otetial or ulerabilit? Te sureallows us to isolate secific brads at a er graular



13/40


ELDADCARIn

Figure 18

Panned purcases f ca car brands as apercentage f tta purcases


60

70

20

10

50

30

40

0

80

100

90

0 20001000 3000 4000 5000 6000 7000

China RussiaIndia

% of respondents buying local car brands


leel b categor of sedig, b coutr ad b teature of te cosumer cocered, weter b icomeor a wide rage of demograics. Te Credit SuisseResearc Istitute reort Te ower of brad iest-ig ublised i Februar 2010 uderlied te sigifi-cace for iestors i uderstadig te driers ofbrad deelomet ad ositioig.

Wen taken t te micr eve, we see treespecific temes aready at wrk and tat migt

devep furter:

1. Te scoe for idustr cosolidatio ad mergersad acquisitios (M&A) actiit.2. Tradig u oortuities as cosumers sift fromubraded to braded roducts we teir icomesimroe.3. Te otetial structural global ad local wiigbrads alogside tose tat ma see teir brad statuscalleged.

To exlore tese temes, Figures 20 ad 21 disla a

umber of e coutr brads tat cosumers ig-ligted i te sure. Tis is a small, but sigificat,subset of te data from te udreds of brads i tesure as a wole. Te two tables slit te brads itofood ad beerages to iclude some lower ticet adessetial items, ad te discretioar sedig.


14/40

Eac table sows te categor of sedig, a ecoutr brad ad its eetratio i te lowest adigest icome grous witi te maret. Our tiigere was to illustrate ow strog te maret ositio-ig of certai brads was sould icome rise amogstemergig cosumers. We ae also sow wic com-

a ows te brad, wic els idetif weter tebrad is local or global i ature.

Te brads selected fall ito oe of tree categoriesad are color coded accordigly brads i te surveytat see teir maret eetratio amog cosumersicrease as we move from low to ig icome (blue);tose tat decrease as icome rises (orage); ad tosetat old teir ow across te icome scale (yellow).

Mergers and acquisitins

M&A activity is rovig to be a major ogoig teme iemergig marets. Global cosumer comaies avetae advatage of te growt oortuities i emergigversus develoed marets ad also te relaxatio of regu-latory costraits tat ermit it. Te sectors tat are morefragmeted ad were local brads roliferate loo mostliely to beefit from greater M&A activity i te future.

Taig te two tables togeter, te dair ad cos-metics sace roide good illustratios of M&A ote-tial, albeit for differet reasos. As our earlier worsuggested, global brads suc as nestle, Daoe adkraft gai limited tractio i essetial items. Tedomiace, ad ideed resiliece across te icomescale, of comaies lie Megui ad yili i Cia illus-

trate ow te stregt lies domesticall. Ulisted com-aies ad co-oeraties (e.g. Moter Dair ad Amuli Idia ad Botao i Brazil) also la a major role.Beod te lies of te co-oeraties, te owersiof local brads b major global comaies is still low (icotrast to muc of te beerages segmet). howeer,pesis Wimm-Bill-Da acquisitio i Russia ad itsowersi of two dair brads sows tat tis eed otbe te case. Tere is eer reaso for more. Te globalcomaies ow brads meet wit limited aetite;te ma be better off buig te local brads ad er-as leeragig teir suerior caabilities i brad

awareess ad distributio to create alue.

Cosmetics are a differet stor. Global laers arereset ad icome sesitiit does imact teir attrac-tio. howeer, as i dair, te data from our surewould suggest tat tere are well-osi tioed localbrads tat offer strog maret ositio, growt ote-tial ad tat are ot alread i te ads of te global

laers, for examle, natura i Brazil, paracute iIdia ad Cistaa Liia i Russia.

Trading up: Unbranded t branded and beynd

Wile te rocess of ow cosumers sift from low-edbrads to remium brads catures lety of cosider-atio; te reality is tat may cosumers across teemergig world still buy ubraded roducts i may cat-egories. I te discretioary areas, tis is at its extremeamog low-icome earers but, as we ave igligted,ca also be widesread i essetial items. Beig wellositioed to exloit te sift from ubraded to bradedroducts offers sizeable otetial gais for comaies.

Figure 19 breas dow by coutry ad by categoryte roortio of resodets suggestig tey bougtubraded roducts. Te relevace of ubraded ur-cases seems greatest amog te discretioary areasad i essetials lie dairy.

If we cosider a sceario were icomes imrove atte low ed ad te aetite for braded roducts grows,tere sould be immediate beefits for tose well osi-tioed amog te lowest icome earers. Liig tisito secific brads icluded i our survey, Figures 20ad 21 would igligt te strog ositio witi te

lower icome grous i fasio/retailig for brads sucas Bata i Idia, herig ad Marisa i Brazil; i cosmet-ics, agai, for natura ad paracute; i sortswear

Actio I Idia ad Liig i Cia. Te data suggeststat pesis dairy acquisitio i Russia also loos strate-gically well laced.

We are somewat scetical about te quality of telow resoses to te questios o ubraded alcool.Buyig ubraded alcool may be deemed illegal isome areas (also ote tat te questio was ot ased iIdoesia, Saudi Arabia ad Egyt for cultural reasos.)however, eve taig te data at face value, we ca see

a read troug to relative ositio of beer brads suc as

Figure 19

Percentage f purcases by sectr tat are unbranded


Brai Cina Egypt India Indnesia Russia Saudi Arabia Turkey

Dair 9 7 68 15 14 32 0 23

Soft dris 6 1 1 2 2 16 0 4

Beer 1 4 - 5 - 20 - 7

Sirits 13 19 - 6 - 16 - 34

Cosmetics 6 13 38 8 68 14 7 15

perfumes 9 23 72 45 81 32 31 66

Fasio 46 43 78 53 72 67 38 80

Leater goods 67 43 79 31 46 76 35 68

Sorts soes ad wear 24 13 54 19 37 29 10 37



15/40

Figure 20

Fd and beverages: Brand market penetratin accrding t incme grup


Sector Coutr / Brad % eetratioat LOWER

icome

% eetratioat hIGhER

icome

Differece paret coma (if alicable) Listed /

priate

Dairy

Juaa (EGypT) 35% 73% 38% Juaa Food Idustries JUFO Ey

Domi Deree (RUSSIA) 27% 50% 23% pesiCo Ic. pEp US

Cudo (RUSSIA) 13% 29% 16% pesiCo Ic. pEp US

Batao (BRAZIL) 30% 44% 13% Batao Cooeratia Agroidustrial priate

parmalat (BRAZIL) 39% 48% 9% AEp Iestmets, Ltd. priate

nestle (InDIA) 2% 11% 9% nestl S.A. nESn vX

Daoe (SAUDI) 7% 15% 8% Daoe Bn Fp

yili (ChInA) 55% 63% 8% Ier Mogolia yili Idustrial Grou Co., Ltd. 600887 Ch

Megiu (ChInA) 63% 68% 4% Cia Megiu Dair Coma Limited 2319 hk

piar (TURkEy) 41% 44% 3% yasar holdig priate

Acor (SAUDI) 20% 21% 1% Foterra Co-oeratie Grou Limited priate

Moter Dair (InDIA) 26% 25% -1% natioal Dair Deelomet Board priate

kraft (SAUDI) 30% 28% -2% kraft Foods Ic. kFT US

Tirumala (InDIA) 16% 7% -9% Tirumala Mil products (p) L priate

Softdris

Guara Atarctica (BRAZIL) 46% 64% 18% Aeuser-Busc IBe nv ABI BB

Mirida pesi-Cola (SAUDI) 41% 53% 12% pesiCo Ic. pEp US

Coca-Cola (InDIA) 25% 33% 8% Te Coca-Cola Coma kO US

Limca (InDIA) 29% 33% 4% Te Coca-Cola Coma kO US

Guoziguole (ChInA) 10% 9% -1% Cia huiua Juice Grou Limited 1886 hk

Cerogoloa (RUSSIA) 10% 9% -1% OST Grou priate

Doll (BRAZIL) 19% 13% -6% Doll priate

Beer

Budweiser (TURkEy) 6% 23% 17% Aeuser-Busc IBe nv ABI BB

Carlsberg (InDIA) 0% 12% 12% Carlsberg Grou CARLB DC

heiee (BRAZIL 0% 11% 11% heiee hEIA nA

Brama (BRAZIL) 12% 19% 7% Aeuser-Busc IBe nv ABI BB

Tsigtao (ChInA) 23% 26% 3% Tsigtao Brewer Coma Limited 600600 Ch

yajig (ChInA) 11% 13% 2% yajig Beer (Guili Liqua) Co., Ltd. priate

hawards (InDIA) 11% 12% 1% SAB Miller SAB Ln

kigfiser (InDIA) 42% 37% -5% UB Grou priate

Baltia (RUSSIA) 23% 18% -5% Carlsberg Grou CARLB DC

klisoe (RUSSIA) 16% 10% -6% Aeuser-Busc IBe nv ABI BBSow (ChInA) 30% 16% -14% SABMiller SAB Ln

Sol (BRAZIL) 45% 30% -15% Aeuser-Busc IBe nv ABI BB

Efes pilse (TURkEy) 85% 58% -26% Aadolu Efes AEFES.IS

Sirits

Joie Waler (BRAZIL) 5% 24% 19% Diageo lc DGE Ln

Bacardi (BRAZIL) 9% 18% 9% Bacardi Limited priate

niulasa (ChInA) 17% 24% 7% Beijig Suxi Agriculture Co., Ltd 000860 Ch

Smiroff (BRAZIL) 31% 38% 7% Diageo lc DGE Ln

Roal Stag (InDIA) 11% 13% 2% perod Ricard RI Fp

5 Ozer (RUSSIA) 11% 11% 0% Alcool Siberia Grou, Ic priate

Bagiers (InDIA) 14% 13% -1% UB Grou priate

Jac Daiels (TURkEy) 22% 18% -4% Brow-Forma Cororatio BF/B US

Xifeg (ChInA) 10% 3% -7% Saaxi Xifeg Liquor Co., Ltd priate

McDowells no.1 (InDIA) 42% 27% -15% UB Grou priate

Absolut (TURkEy) 35% 14% -21% perod Ricard RI Fp

Brads icreasig sare from low to ig icome Brads maitaiig sare Brads seeig decreases i maret sare



16/40

Sector Coutr / Brad % eetratio

at LOWER

icome

% eetratioat hIGhER

icome

Differece paret coma (if alicable) Listed/priate

Autos

GM (ChInA) 8% 12% 4% Geeral Motors Co GM US

Maruti Suzui (InDIA) 38% 41% 4% Maruti Suzui Idia Limited MSIL In

TATA (InDIA) 40% 41% 1% Tata Motors TTM US

Toota (SAUDI) 23% 23% 0% Toota Grou 7203 Jp

Lada/vAZ/Ziguli (RUSSIA) 17% 11% -5% Reault SA RnO Fp

volswage (ChInA) 22% 16% -6% volswage AG vOW3 Gy

Fiat (BRAZIL) 38% 22% -16% Fiat S..A. F IM

Cosmetics

Boticrio (BRAZIL) 15% 50% 35% O Boticrio priate

niea (RUSSIA) 14% 31% 17% Beiersdorf AG BEI GR

pods (InDOnESIA) 27% 43% 16% Uileer Idoesia UnvR Jk

natura (BRAZIL) 51% 62% 11% natura Cosmeticos SA nATU3 BZ

paracute (InDIA) 33% 42% 8% Marico Limited MRCO In

Satoor (InDIA) 14% 15% 1% Wiro Limited WpRO In

LOreal (SAUDI) 10% 10% 0% LOreal SA OR Fp

Cistaa Liia (RUSSIA) 19% 17% -3% kalia kLnA RU

Fair & Loel (InDIA) 46% 32% -14% Uileer UnA nA

via (InDOnESIA) 26% 7% -19% SiFood priate

Oriflame (RUSSIA) 61% 20% -42% Oriflame Cosmetics S.A. ORI SS

Fasio

Cow Taifoo (ChInA) 5% 28% 23% Cow Taifoo Co. priate

herig (BRAZIL) 4% 20% 16% Cia. herig hGTX3 BZ

Burberr (SAUDI) 4% 16% 12% Burberr Grou pLC BRBy Ln

Zara (RUSSIA) 2% 13% 11% Idustria de Diseo Textil, S.A. (Iditex) ITX SM

Fast Trac (InDIA) 12% 22% 10% Tita Idustries Ltd TTAn In

Alle Soll (InDIA) 1% 11% 10% Adita Birla Grasim GRASIM BO

Reer (BRAZIL) 21% 28% 8% Lojas Reer S.A. LREn3 BZ

Omega (ChInA) 4% 11% 7% Swatc Grou UhR vX

LvMh (ChInA) 1% 6% 5% LvMh S.A. MC Fp

Zara (SAUDI) 16% 17% 1% Idustria de Diseo Textil, S.A. (Iditex) ITX SM

Marisa (BRAZIL) 41% 33% -8% Maris Lojas SA AMAR3 SA

Sortswear

Adidas (RUSSIA) 27% 42% 15% Adidas AG ADS Gy

nie (SAUDI) 12% 14% 2% nie, Ic. nkE US

Liig (ChInA) 20% 20% 0% Li nig Coma Limited 2331 hk

Ata (ChInA) 12% 12% 0% Ata Sorts products Limited 2020 hk

X ste (ChInA) 10% 4% -6% Xte Iteratioal holdigs Limited 1368 hk

hadsets

Ale (ChInA) 13% 28% 15% Ale Ic. AApL US

Ale (BRAZIL) 5% 17% 12% Ale Ic. AApL US

Samsug (BRAZIL) 26% 33% 7% Samsug Grou 005930 kS

huawei (InDOnESIA) 10% 9% -1% huawei Tecologies Co. Ltd priate

LG (BRAZIL) 15% 12% -3% LG Cor. 066570 kS

noia (BRAZIL) 37% 28% -9% noia Cororatio nOk1v Fh

Tv/Comuters/Iteret/

Tele

coms

So (RUSSIA) 8% 30% 22% So Cor. 6758 Jp

Ale (SAUDI) 11% 21% 10% Ale Ic. AApL US

Tata poto (InDIA) 13% 23% 10% Tata Teleserices Limited TTLS In

hCL Tecologies (InDIA) 3% 12% 9% hCL hCLT In

Airtel (InDIA) 11% 11% 0% Barti Ai rtel Limited BhARTI In

Leoo (ChInA) 29% 24% -5% Leoo Grou Limited 992 hk

hewlett pacard (InDIA) 11% 6% -5% hewlett-pacard Coma hpQ US

Dell (InDIA) 19% 13% -6% Dell, Ic. DELL US

Acer (InDIA) 17% 4% -13% Acer Icororated 2353 TT

Figure 21

Discretinary spending: Brand market penetratin accrding t incme grup


Brads icreasig sare from low to ig icome Brads maitaiig sare Brads seeig decreases i maret sare



17/40

Baltia ad klisoe i Russia. If you believe tat tebeer/sirits resoses below uderestimate te localo-braded cosumtio, it is wort otig te localbrads tat domiate te low icome bracets suc aste lies of Sow i Cia ad Sol i Brazil.

Ma of tese brads tat target te low icome

cosumer, articularl beerages, ae bee acquiredb te global cosumer comaies suc as ABI adSAB Miller. Tsigtao i Cia is oe otable tat stillrests outside of global owersi. Uileer ows stroglow icome local brads i Idia ad Idoesia. how-eer, oe of te cosmetics ad fasio brads is aset owed b global comaies.

Structura winners and structuray caenged

Wile tis otetial ositioig for a low-ed oortuityas a immediate relevace i some areas, te log-term

teme i tis reort is to cosider a multi-year sift todiscretioary sedig tat exteds well beyod te low-est of icome earers. Cosumers wo ave moved fromubraded to effective low-ed or value-braded rod-ucts are ot goig to sto tere if teir icomes imrovefurter. Brads tat ave critical mass at te low ed, butsustai it or grow it u te icome scale could rove to bemajor structural wiers.

For examle, as strog as te aetite may be forSow ad Sol at te low ed, it tails off raidly beyodte low icome earers. Sows effective eetratioalves betwee low ad ig icome earers. I te cos-metics segmet i Russia, Oriflame sees its eetratio

fall from 61% to 20% betwee low- ad ig-icomegrous. As muc as tey are missig out o te otetialstructural sift u te icome scale, tey are very dee-det o oe icome segmet today. Oriflame as foudtis a aiful exeriece i te last year, give te ressureo te real icomes of low-icome Russia cosumers.

Ma of te brads tat disla te ideal mix of beigstrog across te board are i te ortfolios of teglobal comaies aboe, e.g. ABIs soft dri bradGuaraa Atarctica or beer brad Brama. Te globallaers owig brads suc as tese will geerallcotiue to beefit. howeer, a umber of te local

brads we ae metioed aboe tat stood out forteir low-icome attractios ad sittig i ucosoli-dated sectors emerge ere as well.

For examle, our sure sows tat just as aroud aquarter of cosumers urcase Tsigtao i te low-icome bad, a quarter at te ig ed do liewise.natura ejos sares of 51% ad 62%, resectiel,betwee low- ad ig-icome bads ad Liig as astable 20% from to to bottom. Brads tat do otejo te same icome resiliece would ultimatel aeto deise a rebradig or reietio or ru te risof beig left beid as icomes steadil imroe

beod te most basic leels.A fial tougt is to wat extet ca tese localbrads sulat te global layers i te bigger ticketareas? hig-ed luxury seems ulikely. Brads sucas Burberry cotiue to grow aace. Tecologyseems to be a area to watc. We ave igligtedte structural growt tat te sector cotiues toexeriece eve i te curretly weak cyclical evi-romet. Te Wester brads are i may areas tir-ig. Brads suc as Dell ad hp ave a decliigaeal i Idia amog iger earers, wile Leovodomiates across te board i Cia. nokias sare isdecliig i most markets as huawei establises itself

i a umber of tem. Of te major global tecologybrads, our survey sows tat oly Ale dislaysstrog market ositioig ad growt. Tere seemsevery reaso to believe tat domestic brads caerode te brad value develoed comaies aveejoyed i tis area.ph

OTO:ISTOCkphOTO.COM/

WEBphOTOGRAphEER


18/40

Credit Suisse EmergingCnsumer Survey 2012

BRAzIl (11%*)

GDp USD 2,447.8 bn

Cosumtio USD 1,520.1 bn (62%)

GDp growt (2011E) 3.77%

TURKEY (11%*)

GDp USD 846.5 bn

Cosumtio USD 601 bn (71%)

GDp growt (2011E) 6.59%

number of resodets: 14,232

Across 8 coutries

70% i urba areas; 30% i rural areas

Nte:

1. Total GDP for the country shown in nominal USD (2011E)

2. * % of survey sampled from this country

3. Country GDP from IMF

4. Consumption from UN data



19/40

RUSSIA (11%*)

GDp USD 1,894.3 bn

Cosumtio USD 945.3 bn (50%)

GDp growt (2011E) 4.29%

SAUDI ARABIA (11%*)

GDp USD 580.7 bn


GDp growt (2011E) 6.47%

EGYPT (11%*)

GDp USD 248.6 bn

CosumtioUSD 174 bn (70%)

GDp growt (2011E) 1.22%

ChINA (18%*)GDp USD 6,476.2 bn

Cosumtio USD 2,085.3 bn (32%)

GDp growt (2011E) 9.47%

INDIA (18%*)

GDp USD 1,700 bn


GDp growt (2011E) 7.84%

INDoNESIA (11%*)

GDp USD 813.9 bn


GDp growt (2011E) 6.4%



20/40

Emerging Consumer Survey 2012


Across 5 geograic locatios

70 % i urba areas; 30 % i rural areas


CELSOpUpO

Te Brazilia cosumer cotiues tostad out as te most otimistic acrossour sure. Te mometum of icomegrowt roides a uderiig to dis-cretioar sedig as it as oer telast ear. Te Brazilia ticall sedsot saes. Tere is a aetite for realassets suc as roert if ot fiacialassets.

At 58%, te weigted aerage bal-ace of resodets is more ositie iBrazil ta i a oter coutr. I addi-tio, tis measure of otimism as seeol a mior ste dow at te lower-icome ed relatie to last ears sure.Te geeral breadt of te otimismacross te oerall oulatio looigaead teds to set Brazil aart, otwit-stadig te istorical uequal icomedistributio.

Icome exectatios are uderiigtis sese of otimism. O average, Bra-zilia cosumers exect oe of te ig-est rates of ouseold icome growtamog te coutries surveyed, wit te

majority exectig icreases i excess of10%, or aroud 5% i real terms. Strogomial icome growt i te last yearalso sielded te cosumer i Brazil fromiflatio more ta i oter coutries.

Te sure reeals tat sedigbeaior roed more robust i te lastear ta elsewere, icludig sedigi te more discretioar areas. Sub-zero readigs o te ertical axis i Fig-ure 23 reflect te umber of categoriesseeig lower readigs i sedigbeaior i tis sure comared wit2010. It cotais te fewest categoriescomared wit oter coutries. Tiscart also igligts tat tecologeetratio i Brazil is seeig strogositie readigs. We also fid temometum beid te readigs o oli-das bacward ad forward looig

is er strog.Fiall, amog te wealtier cosum-

ers i te sure (GDp er caita ofUSD 12,400), te saigs beaior isstriig i tat so little of icome is

saed. Barel 7% of ouseold icomeis registered as saed ad oer a alf ofresodets suggest te ae o extracas for saigs. Gie te stregt ofrojected real icome growt, tis isextraordiar. It is more tical of tecoutries were te cosumer is beigseriousl squeezed ta oe werefiaces seem robust.

peras a aswer lies i ercetioof roert as a asset. proert ur-case itetios are iger ere ta foroter coutries ad ae icreased oerte ear. Moreoer, 73% of resodets

exect ouse rices to rise igerta a of te BRIC coutries. Couledwit a istor of ig iflatio, realassets eras commad more of astructural attractio.

BraiLiig for toda

Figure 22

Key ecnmic and demgrapicindicatrs

Source: IMF, EIU, Un

GDp (2011) USD 2,447.8 billio

GDp er caita (2011) USD 12,423

poulatio (2011) 197.04 millio

Geograical area 8.51 millio m2

number of cities 6(i excess of 2 millio eole)

Gii coefficiet (2009) 55.0

Aerage iflatio (2011E) 6.6 %


Real GDp growt (2011E) 3.8 %


Curret accout % of GDp -2.3 %(2011E)


Cosumtio as a % of GDp 62.1 %(2011)



21/40

10%

20%

30%

40%

50%

60%

70%

80%

Total 800 1400500 2400 4100 5600 7300 More than

8200

Income (BRL)

Balance better vs worse

30%

40%

50%

60%

80%

70%

90%

800500 1400 2400 56004100 7300 More than

8200


Income (BRL)2011 2010 2011 average 2010 average

-2

2

4

6

0

8

10

12

0 2000 4000 6000 8000

Nominal growth in household income (%)

Income (BRL)Last 12 monthsNext 12 months

0

10

5

-20

-15

-10

-5

15

0 20 40 60 80 100

Recorded spending in 2011 vs 2010

10

20

40

30

50

60 % of respondents saving by each method

Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

Housing+

PublicUtilities

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

5%

10%

15%

20%

25%

45%

30%

35%

40%

0%


0%

Smartphone

Watches Spirits

Cars

Internet access

Computers

Beer

Cosmetics

Dairy

Carbonateddrinks

Sports shoes

PerfumeProperty

Mobilephones

Fashion apparel

Holidays

Privatehealthcare

Extra education

Figure 26

Spending mmentum and market penetratin


Figure 27

Mnty spending by categry (%)


Figure 28

Savings by distributin canne (%)


Figure 25

Nmina grwt in used incme (%)


Figure 24

Persna nances 2011 versus 2010 (%)


Figure 23

State f persna nances ver next six mnts




22/40


Te outloo for te Ciese cosumeris robust toug exectatios ae soft-eed i te last 12 mots. Te exec-tatios of te ric ad oor remai amared cotrast, desite goermetolic iitiaties aimed at addressig teimbalaces. For ow, te iger-icomecosumers loo liel to remai te re-sere for discretioar sedig ad teacquisitio of iger-ticet items.

At 38%, te weigted balace ofresodets exectig to see teirfiacial ositios imrove is still robust toug we would ote softeigsomewat from last year ad belowtat of Brazil ad Idia. As Figure 31sows, te ste dow as bee rettyuiform from ric to oor. I tatresect, we would also ote tat ot-ig as caged to close te sizeable

ga betwee te outlook of te ricad oor.

Te imlied atters of sedigover te last year reflected i Figure 34are of lower sedig o a rage of

stales suc as dairy ad beverages aswell as more discretioary items sucas fasio aarel, cosmetics ad er-fumes.

Te areas of sedig tat aesee uward mometum are still rela-tiel muted i teir degree toug testregt of tecolog sedig isclearl aaret. howeer, te two cat-egories tat stad out are ealtcaread educatio. Te ol coutr witcomarable mometum i ealtcaresedig is Saudi Arabia. Ol Saudiad Idia ad stroger readigs o extraeducatioal sedig.

Te saigs beaior of te Ciesecosumer is also a otable feature. Lastear we igligted te ig roesitto sae. Tis remais ucaged. Aressure o icomes as ot bee off-

set b a reductio i saigs. At earl30% of motl icome, it is te igesti te sure. howeer, as Figure 35illustrates tere is let of scoe todiersif ito oter saigs caels.

Fially, we ote te iterestigresoses i Cia to some additioalquestios icluded i our latest survey.We asked about te imortace ofevirometal rotectio relative toecoomic growt, a et 28% of reso-dets tougt tat te evirometsould take riority over growt, wellabove ay oter coutries surveyed.Tis suggests tat wealt accumulatiois also temered by cocers about tecommo good ad a degree of socialcosciece is emergig. At te sametime, Ciese cosumers tik teir

govermet is very effective. Secifi-cally, 62% of eole tougt tat teirgovermet was quite effective or veryeffective at solvig teir roblems, sec-od oly to Saudi Arabia.

CinaA saigs cultureEmerging Consumer Survey 2012




Figure 29





poulatio (2011) 1.34 billio








Curret accout % of GDp 5.2 %(2011E)





23/40

10%

20%

30%

40%

50%

Total 3500 4500Up to

2500

5500 6500 7500 9000 More than

10000

Income (RMB)


0

10%

20%

30%

40%

50%

60%

Up to

2500

3500 4500 5500 6500 7500 9000 More than

10000


Income (RMB)

-1

0

1

2

3

6

5

4

7

2000 4000 6000 8000 10000 12000


Income (RMB)Last 12 monthsNext 12 months

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

5%

10%

15%

20%

25%

35%

30%

2011 2010 2011 average 2010 average2011 2010 2011 average 2010 average

Housing+

PublicUtilities

10

20

40

30

50

90

60

70

80

Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

0

8

4

2

6

-8

-6

-4

-2

10

0 20 40 60 80 100



Smartphone

Watches

Spirits

Cars Internetaccess

Computers

BeerCosmetics

Dairy

Carbonateddrinks

Sports shoes

Perfume

Property

Mobile

phones

Fashion apparel

Holidays

Privatehealthcare

Extra education

0%

0%

Figure 33



Figure 34



Figure 35



Figure 32



Figure 31



Figure 30





24/40



Across 4 geograic regios

52 % i urba areas; 48 % rural


hOLGS

Egt otabl stood out as b far temost egatiel ositioed i last earscosumer sure. Drawig a defiitiecoclusios from our sure for Egttis ear is clearl azardous, gie aolitical bacdro tat is so fluid. how-eer, we ca illustrate wat cages areisible i tis ears data. Te realit isless as caged ta oe migt aeoed. I fact, te reailig ouseoldfiacial ositio loos worse ta it dida ear ago.

Wile we would mae o claims as toerfect foresigt, we would ote tatlast ears sure for Egt geeratedb far te most egatie readigs of acoutr i te sure across eerbarometer of setimet. A extremeiequalit of icome ad a ouseoldbudget cosumed b eer more exe-

sie food rices erodig its real aluewere ard data oits. Wats caged?

Te outloo of te cosumer asimroed wit our weigted readigs ofotimism moig from 5% to +8%.

howeer, tis is still te lowest i tesure. how te readigs ae cagedacross icome grous as sow i Fig-ure 36 are otewort. Te oorest admiddle-icome earers ae see aimroemet from te er egatieercetios a ear ago, wile te ricae see a corresodig declie, a-ig arguabl bee te greater beeficia-ries of te old regime.

Curret olitical eets eras owcall ito questio te durabilit of teimroemet at te bottom ed of tescale. Tere is also te ogoig red flagraised b exosure to food wit its ear50% claim o te ouseold icome ofEgtia cosumers. Iroicall, las tocut goermet sedig o food subsi-dies to stregte state fiaces, couldi itself icrease iflatio ad udermie

cosumer setimet.Wat we ae see durig te eriod

tis sure catces as bee a ic-ui buig i te lower-ticet discretio-ar items, e.g. fasio ad cosmetics.

Tis is eras reflectie of te imroedcofidece amog low-icome earers.Tis cotrasts wit retrecmet iroert. proert owersi as falleb 13% tis ear to 57% o aerage.Also stri ig, ad eras cocerig,tere ae bee major reductios iareas of ealtcare ad educatio roi-sio b idiiduals.

Te structural bullis stor tat existsfor te cosumer i Egt is tat sed-ig leels are so low. Recorded actiiti almost eer categor is lower taoter coutries. Te e is fidig te

stabilit ad imetus to uloc it. Atreset, ad olitics aside, low omial-icome exectatios wic, if deliered,will still be sigif icat real declies areot te rigt latform.

EgyptCage but o cage

Figure 36



GDp (2011) USD 248.6 billio















25/40

-15%

-10%

-5%

5%

10%

20%

15%

Total

Income (EGP)


0

-40%

-50%

-30%

-20%

-10%

10%

20%

30%

1000 1500 2500 3500 4500 5500 60001000 1500 2500 3500 4500 5500 6000


Income (EGP)2011 2010 2011 average 2010 average2011 2010 2011 average 2010 average

70

80

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

-20%

10%

-10%

20%

30%

50%

40%

Housing+

PublicUtilities

10

20

40

30

50

60

Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

2.0

1.0

4.0

3.0

5.0

6.0

7.0

8.0

0.0

0

10

5

-30

-20

-25

-15

-10

-5

20

15

0 20 40 60 80 100



Smartphone

Watches

Cars

Internetaccess

Computers

Cosmetics

DairyCarbonated

drinks

Sports shoes

Perfume

Property

MobilephonesFashion apparel

Holidays

Privatehealthcare

Extra education

0%

0%

500 1500 2500 3500 4500


Income (EGP)Last 12 monthsNext 12 months

Figure 40



Figure 41



Figure 42



Figure 39



Figure 38



Figure 37





26/40


Otimism amog Idia cosumers isol surassed b tat of Brazil. how-eer, te sedig riorities ae beelower ticet. Distiguisig features ofte Idia cosumer are a cotiuedaetite for extra educatioal exedi-ture ad a roesit to sae. Tere is astructural oortuit i tecologsedig.

Te Idia cosumer remais tesecod most cofidet i is/er er-soal fiaces looig forward (afterBrazil). O a weigted basis, tis asstregteed oer te ear, but tedetailed breadow sows tis sift wasdrie b te igest icome earers.

Te ast majorit of categories weillustrate ae sow a icrease iactiit aboe te rates see elsewere.

Te are tedig to be lower-ticet iature cosmetics, clotig, beer-ages, mobile oes (ot smartoes), for examle. I cotrast tooter coutries, tecolog sedig

as bee more muted (if still ositie).howeer, a strog structural stor existsi tecolog, wit owersi ad receturcases of tecolog still low com-ared wit elsewere.

70% of Idias say tey ave ocomuters i te ome. Oly 19% ofresodets register avig access tote iteret. Bot measures are tesecod lowest i te survey after Ido-esia. If we begi to see a sift awayfrom sedig o essetial items(ousig ad food make u aroud35%), tis sould be oe of te areasto beefit, articularly if we seeicreased ifrastructure sedig itelecoms.

We igligted last ear te igsare of sedig te cosumer sets

aside for educatio. At close to 10% ofte ouseold budget, tis remais afeature. I fact sedig o extra edu-catio is recorded at a greater rate itis sure comared wit last, bot i

absolute terms ad relatie to otercoutries. 32% of cildre articiate ieducatio outside of tical scooligersus 23% last ear. Adult articia-tio i extra courses as rise from 3%to 12%. Tis micro stor uderis alog-term bullis macro stor for Idia.

Fially, te savigs culture we ig-ligted last year remais aaret. Tesurvey registers te igest bakaccout eetratio ad te fewestumber of eole claimig tey aveo extra moey for savig. Te life

isurace idustry (via tax icetives)ad real assets suc as gold ad ro-erty are te mai o-cas omes forte ruee. Tis mix sets Idia aartfrom te oter great saver Cia.

IndiaGoig bac to scool

Figure 43



GDp (2011) USD 1,700 billio



















27/40

10%

20%

30%

40%

50%

60%

70%

Total 5000 6250 8750 12500 17500 25000 35000More than

40000

Income (INR)


0%

20%

10%

40%

30%

60%

50%

70%

6250 8750 12500 17500 25000 35000 More than

40000


Income (INR)

0.0

3.0

4.0

5.0

2.0

1.0

6.0

50000 10000 15000 25000 30000 400003500020000


Income (INR)Last 12 monthsNext 12 months

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

5%

10%

15%

20%

25%

2011 2010 2011 average 2010 average

Housing+

PublicUtilities

0%

0%

10

20

40

30

50

100

90

70

80

60

% of respondents saving by each method

Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

0

10

5

-25

-20

-15

-10

-5

15

0 20 40 60 80 100



Smartphone

Watches

Spirits

CarsInternet access

Computers

Beer

Cosmetics

Dairy

Carbonateddrinks

Sports shoesPerfume

Property

Mobilephones

Fashion apparel

Holidays

Privatehealthcare

Extra education

Figure 47



Figure 48



Figure 49



Figure 46



Figure 45



Figure 44





28/40


Te Idoesia cosumer offers a strogstructural growt story, wit arguablymore BRIC caracteristics ta te Rus-sia. GDp er caita may be te tirdlowest i te survey, but otimism is tetird igest. If food rices are removedas a urdle, uder-eetrated discre-tioary sectors offer cosiderable growtotetial as icomes cotiue to grow.

Idoesia ma ra as oe of teoorer coutries i te sure, but itras amog te most otimistic adalso sows otimism tat is risig earo ear. Otimism i te regio comestird igest i our sure (just belowIdia ad Brazil), wit a weigted et38% of resodets exectig teirositio to imroe i te comig six

mots. Tis is u four ercetageoits from last ear ad as riseacross eer icome categor.

Wile te ricer dislay te greatestcofidece close to te igest i te

wole survey te oorer ed of tescale sows robust levels of cofidecei te 20%30% rage. Te driver oficome is a suortive oe. It may be auequal oe i terms of rogressio,but agai te exectatios of te oor-est levels i te icome scale areimrovig more raidly ta elsewere,albeit from a icome level tat is low iabsolute terms.

Te ris tat alwas exists for teIdoesia cosumer is te sesitiit offood rices. As i a of te oorerecoomies, food cosumes a large ro-ortio of te ouseold budget. Oursure suggests it is close to a tird.hece, uward ressure o riceswould treate to crowd out oter dis-

cretioar sedig.We ca arguably see a elemet of

tis i comarig tis survey to lastyear a eriod we food rices avebee a issue. Recorded sedig

activity is ositive i a wide rage ofsectors, but i a more modest fasiota oter coutries were otimism isrecorded at a similarly ig level. how-ever, if food rices become less of aimedimet, tere is cosiderableotetial to ulock uder-eetratedmarkets suc as autos (cars ad motor-cycles) ad tecology.

As oe would robabl exect, tedeelomet of fiacial serices issmall. howeer, we ae see small

rises i te umber of resodets ro-fessig to ow a ba accout ad lifeisurace olicies (39% ad 3%,resectiel), toug oldig cas is stillte mai form of saigs.

IndnesiaO a fast trac





Figure 50




GDp er caita (2011) USD 3465














29/40

10%

20%

30%

40%

50%

60%

70%

80%

Total 12501000 1750 2500 6250 87504000 More than10000

Income (IDR '000)


0%

10%

5%

15%

30%

25%

20%

35%

50%

45%

40%

55%

12501000 1750 2500 4000 6250


Income (IDR '000)

0

8.0

7.0

6.05.0

4.0

3.0

2.0

1.0

10.0

9.0

11.0

-1.0

1000000 3000000 5000000 7000000 9000000 11000000


Income (IDR '000)Last 12 monthsNext 12 months

10

20

40

30

50 % of responding saving by each method

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

5%

10%

15%

20%

25%

40%

35%

30%

Housing+

PublicUtilities

0

10

5

-30

-20

-25

-15

-10

-5

15

0 20 40 60 80 100



SmartphoneWatches

Cars

Internet

access

Computers

Cosmetics

Dairy

Carbonateddrinks

Sports shoes

Perfume

Property

Mobilephones

Fashion apparel

Holidays

Privatehealthcare

Extra education

0%

0%


Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

Figure 54



Figure 55



Figure 56



Figure 53



Figure 52



Figure 51





30/40


MORDOLFF

Desite te structural suort tere asbee for te Russia ecoom i recetears from commodit rices, tere asot bee a otable tricle dow to teaerage cosumer. Otimism remaiste lowest of te BRICs. Te iequalitof icome suggests tat growt oor-tuities are laed mail at te ig-icome ed i Russia.

At a et weigted balace of ol20% iewig teir fiacial ositioimroig i te six mots aead, tereadig i Russia is barel a tird of teleel see i Brazil. I fact, ol Turead Egt ra lower i terms of fia-cial otimism witi te sure.

Te simle exlaatio stems fromicome growt omial ad real. Witte former er modest, te latter waser egatie to te tue of 7% as

iflatio eroded omial gais. Witiflatio forecast to remai at similar le-els, tis lid o otimism will ot beremoed easil (a tigteig i goer-met sedig ad ostoig esio

idexatios are also uelful). Agaisttis bacdro, it is iterestig ad er-as surrisig to ote tat we aesee icreased ositie readigs ofactiit i some areas of discretioarsedig, articularl ig-ticet items,icludig tecolog ad luxur goods.We would offer two exlaatios. First,a seere iequalit of icome reails iRussia ad, at te ig ed, suortremais for strog for large-ticet ur-cases. Secod, iger-ticet goodssuc as watces ad smart oesremai uder-eetrated i Russia fur-ter suortig structural growt.

Russia cosumtio of alcoolicdriks is still oe of te igest com-ared wit te oter markets. Te e-etratio of beer (66% of our Russiasurvey resodets urcased beer i

te last tree mots) is similar toCia (67%) ad Brazil (63%), butRussia cosumtio of sirits is by farte igest (49% of resodetsbougt sirits i te last tree mots

comared to Brazil i secod lace at33%). however, alcool cosumtioas ot grow over te ast year,accordig to our survey data. Te raftof measures aimed at curbig alcoolcosumtio itroduced by presidetMedvedev i 2011 is likely to lead tofurter declies i beer ad sirit salesas tey are ased i over te extcoule of years.

Te stor of low baig eetratiowe igl igted i te last sure er-sists, wit little imroemet i baaccout access. Less ta a fift of

tose sureed reorted aig a baaccout, ad oter caels of iest-met life isurace, mutual fuds,goermet bods agai registeredegligible oerall utae.

RussiaTe weaest BRIC i te wallEmerging Consumer Survey 2012




Figure 57


















31/40

-20%

-10%

10%

20%

30%

40%

Total 250001500075005000 850006000040000 More than

100000

Income (RUB)


0%

-10%

-20%

10%

20%

30%

40%

50%

5000 7500 15 000 25 000 60 00040000 More than

100000

85000


Income (RUB)

-2.0

0.0

-1.0

2.0

1.0

4.0

3.0

5.0

10000020000 40000 60000 800000


Income (RUB)Last 12 monthsNext 12 months

% of respondents saving by each method

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

5%

10%

15%

20%

25%

40%

35%

30%


Housing+

PublicUtilities

0

5

-20

-15

-10

-5

10

0 20 40 60 80 100



SmartphoneWatches

Spirits

Cars

Internet access

Computers

Beer

Cosmetics

DairyCarbonateddrinks

Sports shoes

Perfume

Property

Mobilephones

Fashion apparel

Holidays

Privatehealthcare

Extra education

0%

0%

10

20

40

30

50


Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

Figure 61



Figure 62



Figure 63



Figure 60



Figure 59



Figure 58

State f persna nances ver next six mntsSource: Credit Suisse Emergig Cosumer Sure



32/40


Te stregt of icome exectatiosuderis te ig leel of otimism ofte Saudi cosumer i te sure. Oilrices tat are a idrace elsewereare coersel a el ere. Te outloofor discretioar sedig tus remaiser strog after wat as bee a earof cosiderable mometum. howeer,tere is also let of otetial for acage i wat is relatiel usoisti-cated saigs beaior.

Wit a weigted balace of reso-dets exectig to see teir fiacialositios imrove i te ext six motsat 37%, te Saudi cosumer is amogte most otimistic i te survey. Wileotimism is at its strogest amog teigest earers, te level is relatively igacross a broad swate of te oulatio.

Otimism goes ad i ad wit

icome growt. Saudi real ouseold-icome growt oer te ext 12 motsis uiforml ositie, ad o aerage teigest i our sure. Te uer ed ofearers exect teir icomes to grow b

9% i real terms a leel usee else-were. Te icture as bee, ad is,less ros for te lowest earers, butagai omial ad real icomes areexected to grow.

Wile iflatio as bee a egatiefactor i our emergig ecoomies sur-eed, icludig Saudi Arabia, tere is astabilizig effect from goermet ol-ic. Robust oil reeues (a drier of ifla-tio for oters) ae roided goer-met sedig wit te fireower tosuort ublic sector icomes ad boostsedig more geerall. We ae seea goermet ledge to sed USD130 billio o ousig ad job creatiotis ear.

Te sedig mometum i te lastear ad te outloo is discretioarfocused. Smart oes, comuters,

roert, cars ad olidas ae all seemore robust treds i actiit ta else-were. Looig forward, 25% ofresodets see ow as a excellettime to mae a big-ticet urcase, wit

itetios to bu cars ad roert risigacross te icome scale. Awa fromsorter-term cosumtio decisios,ealtcare ad extra educatioal sed-ig as also bee stroger ta else-were, wit goermet sedig tosulemet tis.

A structural oortuit remais ite fiacials serices idustr. Te oolof saigs is excetioall large. higleels of icome coicide wit a igsaigs rate (15%). Te Credit SuisseGlobal Wealt Reort 2011 estimatedtat total wealt i Saudi Arabiaicreased from USD 0.4 trillio to USD

0.6 trillio i te last ear. Fiacialwealt er caita icreased 27.5%. Stillte saigs culture is far from soisti-cated. Gold/jeweller commads moreof a focus ta fiacial marets.

Saudi ArabiaTe oil rice edgeEmerging Consumer Survey 2012



Figure 64








Gii coefficiet (2009) n.A.










33/40

0%

40%

35%

30%

25%

20%

15%

10%

5%

45%

50%

5000 87506250 1375011250 16250 18750


Income (SAR)

4.0

16.0

14.0

12.0

10.0

8.0

6.0

14500 2250018500105002500 6000

Real growth in household income (%)

Income (SAR)Last 12 monthsNext 12 months

Food

Entertainment

Autos

Healthcare

Education

HPC

Savings

Mobilephone

Other

5%

10%

15%

20%

25%


10

20

40

30

50


Life

insurance

Bankaccount

Collectables

Cash

Gold/

Jewellery

MutualFund

Noextra

savings

Property

Stockmarket

Treasurybond

0

Housing+

PublicUtilities

0

15

10

5

-20

-15

-10

-5

25

20

0 20 40 60 80 100



Smartphone

WatchesCars

Internet accessComputers

Cosmetics

DairyCarbonateddrinks

Sports shoes

Perfume

Property

MobilephonesFashion apparel

Holidays

PrivatehealthcareExtra education

0%

10%

20%

30%

40%

50%

60%

Total 6250 87505000 11250 13750 16250 18750More than20000

Income (SAR)


0%

Figure 68



Figure 69



Figure 70



Figure 67



Figure 66

Persna nances 2011 versus 2010 (%)Source: Credit Suisse Emergig Cosumer Sure

Figure 65





34/40


MASTERLU

Ture is a ew editio to te CreditSuisse Emergig Cosumer Sure for2012. Ufortuatel, it jois at a timewe emergig maret cosumers aelittle cofidece i teir immediate out-loo. Desite GDp er caita i eeigwit te middle-icome bracet, itssedig atters are more tical of telow-icome coutries, wit food adousig costs osig a seere costrait.

After Egt, Ture registers a lowleel of cofidece i te sure witol 7% of resodets registerig etositie rosects for te six motsaead. Te essimism is most acute ite low-icome areas, toug ee atte ig ed otimism is well below tatexressed b te ig ed of te icomedistributio elsewere.

Wile Ture is a ew editio ad we

lac a 2010 sure, we would cofidetlsuggest tat 2011 as bee a ear ofrelatie difficult for te cosumer. nom-ial-icome growt as bee meager less ta 3% ee at te ig ed. Ifla-

tio will ae more ta wied tis out ateer icome leel. Wit cosumers sug-gestig tat omial icomes will grow ata similar rate ext ear, real icomes looset to erode furter.

Two categories domiate te sed-ig atters of te Turis cosumer food ad ousig/utilities. Collectivesedig o tese items reresetsearly alf of total icome. As we avesow elsewere, te coutries werefood as osed a large claim o co-sumers icome ave bee amog temost deressed. Turey is o differet.

housig is a more distictive feature.Exediture i tis area (at a esti-mated 24%) is te igest of ay cou-try i te survey. Tis looks to be moreout of ecessity ta desire. Te ro-ortio of eole registered as retig

teir roerty is amog te igest ite survey. Turkis ecoomic growtover te ast decade, ad te esuigurbaizatio, as led to ig iflatio ite ousig sector.

Take togeter wit te food como-et, te most basic eeds arearguably crowdig out may oterareas of sedig. Te survey datasow tat te owersi ad imliciteetratio of discretioary roductsi Turkey is muc lower across teboard we set agaist te surveyaverage, desite GDp er caita i temid-rage comared wit te otersurvey markets.

Cosumers ave a limited egage-met wit te fiacial sector. Bakaccout eetratio is amog te low-est i te survey, wit oly 14% avig

access to oe. Wile tis resets astructural oortuity, we would equallyote tat, worryigly, 73% of reso-dets claim tey ave o additioalicome to save.

TurkeyFeelig te squeezeEmerging Consumer Survey 2012



Figure 71






Geograical area 783,562 m2









Cosumtio as a % of GDp 71 %(2011)



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Income (TRY)Pho ne s Sma rt ph on es Compu te rs

emerging consumer survey 2012

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