Emerging markets shoppers turn to web for deals

October 13, 2013 1:42 pm

Emerging markets shoppers turn to web for deals

By Scheherazade Daneshkhu, Consumer Industries Editor

Consumers with internet access in developing countries are just as likely to search for money-saving grocery deals to beat food price inflation as those in the developed world, according to a new report. The online survey* of 29,000 shoppers in 58 countries conducted by Nielsen, the global information company, showed many similarities in behaviour no matter where the consumer lives – but also striking differences.In the US, half of those who responded said they would stock up on sale items as a way of beating inflation compared to one-third in the Asia-Pacific region, possibly reflecting space and transport differences.

But social media plays a bigger role in developing countries. In South Africa and South Korea, 43 per cent said they would use social media to find online deals compared to 20 per cent in the US and 24 per cent in Canada.

Overall, 32 per cent of shoppers in developing countries said they would turn to the internet as a tool to beat food price inflation, only fractionally below the 33 per cent in developed economies.

Since the survey was based on respondents with online access, Nielsen said the results indicated that “consumers in developing regions actually outperformed those in developed markets for their intention to use online sources to search for deals”.

Food price inflation is the biggest concern of global food companies, according to Nielsen, given that prices are expected to double within 20 years because of rising demand as the world’s population increases.

More than 85 per cent of those surveyed said that higher food prices would force a change in their shopping habits. While most said they would continue to buy the same amount – or more – of cereals and rice, wheat and grains, the most vulnerable categories were sweets, snacks, ready meals and fizzy drinks.

Nielsen said there were big opportunities for own-label brands with the expansion of supermarket chains. In India, where Nielsen forecasts that supermarket sales will more than double in the next two years from $1.8bn to $5bn, private label sales grew by 22 per cent last year.

“Where private label is well established, the survey results showed their potential power during inflationary times,” the survey says. “In North America, almost half respondents (46 per cent) said they would shop for more private label brands when food prices increase.”

The report, to be published this week, also found that feeling cash-strapped was not necessarily linked to income. For example, the Middle East and Africa reported the highest percentage – 49 per cent – of households earning less than $5,000 a year, yet the 17 per cent who said they felt able to spend freely was also the highest.

The wealthiest region was North America, where 46 per cent of those surveyed earned $50,000 or more, yet reported the lowest percentage – 9 per cent – of those feeling able to spend freely.

*Nielsen Global Survey of Inflation Impact (conducted between February 18 and March 8, 2013)

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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