Consumer confidence across a core group of emerging markets has improved from a year ago as the global economic outlook has brightened, local stock markets have risen and pressure has eased on countries sensitive to commodity prices, a report said.

The Credit Suisse Research Institute’s seventh annual Emerging Consumer Survey shows that while confidence has improved across this group of countries in aggregate, a sharp divergence has emerged between the most optimistic consumers who reside in the major Asian economies and those in Turkey and Mexico where geo-political factors have contributed to a slide in confidence.

Despite these contrasts, a change in the nature of consumption driven by a rapidly growing "middle class" in emerging economies remains on track, the report said.

“The 2017 Emerging Consumer Survey explores current growth opportunities presented and new consumer cultures across the emerging world. This year, we observe a changing pattern in the spending behaviour of the emerging middle class. We also find that a more "conscious" consumer is on the rise across emerging economies. Smart businesses will capitalize on these developments,” said Urs Rohner, chairman of the Credit Suisse Research Institute and Chairman of the Board of Directors of Credit Suisse Group.

“Digital technology continues to be the facilitator of changing consumer behaviour. With more than a billion consumers yet to come on-line in our surveyed countries, the potential is significant.”

The Credit Suisse Research Institute (CSRI) survey provides a granular analysis of the profile, mood and behaviour of consumers across eight major emerging economies - Brazil, China, India, Indonesia, Mexico, Russia, South Africa and Turkey.

These nations have a total population of close to four billion people and total annual consumption worth $9.4 trillion which means an analysis of their spending habits can generate valuable investment themes.

Eric Miller, head of Client and Content for Global Markets, Credit Suisse said: “Our analysis indicates that a further 10 per cent of surveyed households have succeeded in entering middle income territory in the last three years. This creates a consumer base of 1.25 billion people across the eight countries covered by our survey alone, confirming the significance of the emerging consumer story and growth opportunity for investors.”

The survey highlights some new developing consumption patterns including a more “conscious spending” approach among wealthier consumers involving a focus on healthier and more environmentally-friendly living. This has meant a greater outlay on skin care, quality foods and sportswear as well as a greater willingness to use car-sharing services than to own a vehicle as consumers engage with "the sharing economy".

The survey also finds that, as the emerging market consumer has developed, local brands are increasingly gaining leading market shares in lucrative consumer segments previously the preserve of large global brands owned by Western multinational companies. A key investment theme for the emerging markets will be the identification of “national consumer champions”.

The growth of e-commerce continues in the emerging market with the CSRI forecasting online retail spending in the surveyed group of markets may exceed $2.5 trillion by 2025, up from $1 trillion today.

However, the survey has identified a fresh fight-back from traditional retailers which are developing multi-channel offerings to re-take lost ground and could disrupt the growth trend of e-commerce for the pure play operators.

Credit Suisse partnered with global market research firm Nielsen to conduct the Emerging Consumer Survey which involved nearly 14,000 face-to-face interviews. – TradeArabia News Service