Business Standard

How to profit from women spending power: report

Women make or influence 60-80% of all the consumption decisions: report

Related News

in emerging nations are aiming higher and they represent one of the highest growth opportunities for an investor today. A research report released by Espirito Santo Investment Bank, (Emerging Markets Women Aiming Higher) by José Martins Soares, highlights on how investors can play the increasing role of women in emerging markets.

The study has selected 13 emerging markets for the analysis: Brazil, China, Czech Republic, Hungary, India, Indonesia, Republic of Korea, Mexico, Poland, Russia, South Africa, Turkey and Ukraine. These nations currently represent one-third of world GDP, and are expected by 2016 to represent half of the world economy.

It is a known fact that western world women have made progress and have almost achieved equality in terms of narrowing the existing wage gap. However, most women from the emerging economies have lagged this progress. The study reiterates the fact that globalisation makes this situation unsustainable and herein lies the investment opportunity.

Over the past 30 years, China has multiplied its GDP by 40x in PPP (Purchasing Power Parity), with India multiplying it by 14x. Over the same period, most of the developed World multiplied their wealth by 4-5x. By 2016, the so-called Bric countries are expected to represent 80% of the GDP of the US, Japan and EU-15 put together, from the current 60%. 

According to BCG, 1 billion women now participate in the workforce globally and control 50% of the wealth in the US. But importantly, along with the increase in purchasing power, women make or influence 60-80% of all the consumption decisions. This makes women the largest addressable market globally.

The factors which influence the consumption patterns in India are diverse. With changing demographics, rising incomes and under-penetration emergence of women, both as a consumers and decision maker is playing a tremendous role. According to a recent IMRB survey of about 9,000 urban Indian women, the income of women living and working in cities increased to Rs 9,457 a month in 2010, up from Rs 4,492 in 2001.

Women are emerging as decision-makers when it comes to purchase of most consumer durables, health and beauty items and also groceries. An interesting study by Nielsen in 2011 found that Indian women are the most likely to spend (rather than save) any extra cash they might happen to have on themselves over the next five years. Nearly all, 96%, anticipated buying clothes, while 77% said they would buy health and beauty products and 44% planned to purchase home electronics.

Women in the emerging markets still face obstacles in their pursuit of equality, despite all the progress so far. In as early as 2011 also, it has been seen that emerging market women were still getting married at a significantly early age. 47% of 20-24 year old Indian women were already married before the age of 18. However despite early marriage, women have been able to delay motherhood. This helped them in joining the workforce and getting independent.

Due to adoption of role models as seen on TV or via access to other cultures (globalisation) or because now husbands and wives are now distracted from contraception, there has been a considerable reduction in birth rate.

Educating the girl child has resulted in the ratio of girls to boys in primary and secondary education in India has increased from 67% to 95%. Several studies point to the fact that when the deciding agent is a female, more likely than not, the welfare of the children and the family is put first.

Emerging markets have mirrored the growth and growth patterns of the developed countries. Contribution of women to consumption in the western world is well documented and it is not unlikely that they will be replicated in emerging markets too. Initial data shows cosumption picking up. Consumption as a percentage of GDP over the last 30 years, for top 13 countries has risen from 12% of the total consumption to almost 30%.

Investors can focus on few sectors with key exposure to emerging markets women: - Food, health/Beauty, Apparel, financial services, health care, consumer durables, telecom services and real estate.

Espirito Santo says that Marico, and closely track the consumption story.

Also read:- Women are the world's largest addressable market: Report

Read more on:   
|
|
|

Read More

BSE launches carbon index

Premier bourse BSE, in collaboration with the UK government, today launched BSE Carbonex, the first-of-its-kind index in India or any emerging market ...

Quick Links

 

Market News

India's dependence on imported edible oil to hit new record

Import bill to rise 5%, over 65% of 19.4 million tonnes supplies to be met through imports, robust directconsumption of seed to lower ...

Jaggery prices shoot up, in line with those of sugar

Farmers have shifted a large amount of high-quality cane (about 10%) to jaggery units so that these fetch 5-10% premium over the standard price ...

Cotton exports hit as China shifts policy

Raw cotton export may fall 20% in the next crop year as against 6% this year; rise in finished yarn exports adds to woes

Sugar exports: Industry restive over delays in subsidy revision

For February-March, the rate decided was Rs 3,300 a tonne; that for April-May was to be announced in the last week of March

Sugar output down 4%, says Isma

Indian mills had produced 1.54 mt raw sugar by the end of March and of that 850,000 tonnes was exported

Back to Top