New Report: Asian millennials to drive global consumption wave
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New Report: Asian millennials to drive global consumption wave

Global investment giant KKR released a report last week that clearly pinpoints one group as poised to “reshape the global consumer market”. That group, as long-time readers of this newsfeed may already suspect, is one we talk about a lot: Asian millennials. There are good reasons for that: Asian millennials are part of a rapidly-expanding middle class with increased purchasing power; and they’re part of an emerging generation that is driving (and being driven by) technological advancements, from smart phones to advances in water treatment. Lastly, they’re a growing cohort: there are six times as many millennials in Asia as there are in Europe and the US combined!

Chinese millennials in particular are redefining the global retail space

The KKR Global Outlook report reiterated many of the points we make on a regular basis. In a potted summary, the authors wrote: “With increasing purchasing power, millennials are driving a secular trend of consumers moving away from ‘things’ and towards ‘experiences’. As we travel around the globe, particularly in Asia (where there are more than 800 million millennials), we see that technology has made the movement towards experiences over things a secular trend with far ranging implications in major sectors such as healthcare/wellness, leisure, financial services and entertainment.”

The poster child for this generational shift is China, where 330 millennials have swiftly embraced middle class consumerism and the latest tech. Not only do they vastly outnumber the US’s 66 million millennials, but they appear to save less and devote a larger proportion of their income to leisure spending. That, of course, has widespread ramifications for the future of consumerism globally.

The report concludes: “As corporations around the globe look to optimize their global footprints in a world that is increasingly turning domestically focused, we believe that this transition will create a significant opportunity for investors to buy, repair, and improve non-core assets from regional and global multinationals. In our humble opinion, the game has changed.”

Disclosure

The evolution of Asian consumers has been a determinative investment consideration since the company’s inception. Many of the holdings in Dominion’s Global Trends Luxury Fund are, therefore, directly or indirectly exposed to the themes discussed in this article.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.