The fastest growing consumer markets in 2014 are not China, India or Brazil. According to a new report from Euromonitor International, the fastest growing consumer markets in the world are not obvious at all and will come as quite a surprise to most economists.
The first country cited by Euromonitor is Malawi, a landlocked country in Southeast Africa, which has only 16.4 million consumers. Malawi is smaller than the state of Pennsylvania but Euromonitor expects Malawi’s total consumer expenditure to grow by 18.2% in real terms in 2014 with total consumer expenditure reaching $5.6 billion by the end of the year--about $335 per capita.
With such a reduced level of spending, low consumer demand is inevitable and there are plenty of obstacles in Malawi which can hinder business opportunities including a general shortage of foreign exchange which affects the country’s ability to pay for imports as well as poor infrastructure such as roads, energy and telecommunications. The government will have to step in and support the country’s improved economic performance by raising consumer incomes as well as helping to slow price inflation by raising consumer demand.
Euromonitor’s choice for the 2nd fastest growing consumer market is Sierra Leone, a small Western Africa country is which is set to grow this year at a rate of 14.7 percent. This nation’s consumer market is even smaller than Malawi, both in consumer numbers (6.1 million in 2013) and in total consumer expenditure, which should reach US$4.3 billion in 2014, equivalent to US$688 per capita.
The recent outbreak of Ebola, however, may bring down the forecasted growth by adding to the already existing challenges that plague the country which include poverty, unemployment and corruption.
Euromonitor foresees heightened expansion over an extended period of time in Turkmenistan, the 3rd fastest growing consumer market. Per capita consumer expenditure in Turkmenistan, which is slightly larger than California, is expected to hit $3,594 in 2014, nearly doubling to $6,422 in 2020.
Turkmenistan’s high economic growth sustained over a protracted period of time has translated into strong income gains and growth in consumer expenditure since 2008 and is set to expand by 14.4% in 2014. According to Euromonitor, Turkmenistan is currently sustained by one of the fastest increase in disposable income anywhere in the world and with a rapidly expanding middle class, opportunities exist over the long term across many sectors, especially communications, education, and leisure and recreation.
The 4th nation on the list is Saudi Arabia which, whose per capita expenditure, set to reach $7,786 in 2014, is the highest of any other country. Saudi Arabia has the largest consumer market in the GCC, worth US$241 billion in 2014. Its enormous size, together with the world’s second fastest growth in annual disposable income will help boost consumer growth in Saudi Arabia by 15.6 percent in 2014.
Hotel and catering are cited as the best performing consumer spending category, followed by miscellaneous goods and services, which is expected to rise 14.0% over the previous year.
Rounding out Euromonitor International’s fastest growing consumer nations is Mongolia, which despite it having the smallest population of only 2.8 million, is expected to grow by 11.8% in total consumer expenditure, with per capita spending set to reach US$1,785 in 2014.
Mongolia is an east central Asian country, bordered by Russia to the North and China to the east, south and west and its small population could lead to some restriction in the growth of consumer demand in the future. But it has made enormous strides in tackling poverty and has boosted overall consumer incomes over the last few years, making it one of the world's fastest growing economies.