Why We Think Consumption Habits in Emerging Markets have Evolved and the Potential Implications for Investors
Emerging markets offer attractive investment opportunities, supported by favorable economic fundamentals and a rapidly expanding middle class. But, classic consumption patterns appear to be evolving, and this could have implications for emerging markets investors. Here’s why:
- For most of the last twenty years, leading companies that cater to the basic needs of emerging market consumers have generally enjoyed healthy double-digit sales growth.
- We believe that in recent years the spending patterns of developing world consumers have fundamentally shifted.
- Consumption of basic staples products is increasingly being crowded out by spending on more engaging and aspirational wants, such as smartphones, video games, and wellness products.
- This research has helped shape the construction of the Polen Capital Global Emerging Markets Growth Strategy, which seeks to invest in a concentrated portfolio of competitively advantaged businesses that we believe can compound their earnings at attractive double-digit rates over the next decade.
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Past performance is not indicative of future results. The information provided in these materials is not intended as a guarantee of profitable outcomes. The opinions and estimates expressed herein constitute the judgment of Polen Capital and are subject to change without notice or update, including any forward-looking estimates or statements which are based on certain expectations and assumptions.