For investors, further weakness in Emerging Markets (EM) does not spell disaster across all sectors. In fact, it’s quite the opposite! The example of China is telling. As consumer spending evolves, shifting from products to services, health, wellbeing, and experiences in general take precedence. Travel and tourism offer a spectacular manifestation of this trend: last year, despite the sharp deceleration of growth, tourism spending increased by 53 percent! Similar double-digit growth figures can be found in other sectors such as personal care and services (spa and massage), organic food and so on.
The wellness trend is now firmly in place and will endure irrespective of the deceleration in economic growth – thanks notably to an increasing number of Chinese consumers striving to achieve a more balanced lifestyle by eating healthier and safer food, practicing preventive healthcare, and pursuing sports activities.
In a recent McKinsey report based on 10,000 interviews in 44 Chinese cities, more than a quarter of respondents said they would allocate more money on lifestyle services and experiences such as spas and travel. More than half also declared that they would focus on eating “healthy” food (often defined as organic or “green” food despite the absence of a credible organic certification body in China).
The following data gives a sense of the impressive global power of this trend: Over the next 15 years, China’s working-age population will expand by an additional 100 million people, and per capita consumption will most likely double. By 2030, China’s working-age population and its appetite for wellness goods and services will account for 12 cents of every dollar spent in cities worldwide (according to McKinsey).