Economics

Investing In The Emerging Millennial Boom

Millennials are becoming a powerful force in emerging markets (EM). Understanding the social and consumer dynamics of this generation can lead to surprising investment opportunities in diverse sectors.

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People born in the 1980s and 1990s are coming of age. Commonly known as millennials, this segment of the population is becoming increasingly important as contributors to society and drivers of consumption growth.

In emerging Asian countries, the millennial engine is racing ahead. Millennials account for a larger portion of the population (Display 1) and are wealthier in aggregate than their developed-market peers (Display 2). Since they’re often better educated than their parents, they enjoy brighter job prospects. And Asian millennials have vastly different habits and tastes from past generations. Businesses that successfully cater to this generation can enjoy prolonged growth, in our view.

Emerging Millennial Boom

Emerging Millennial Boom

China Leads the Way

China deserves special attention. With 415 million millennials and a relatively high per capita income, spending power of the younger generation in China is much greater than in other emerging countries.

In China, 35% of people born in the 1990s are expected to graduate from college, up from just 4% among their parents, according to a Goldman Sachs report. Since 70% of Chinese millennials already own a home, they have more disposable income than young Americans, who are typically saddled with student loans. It is no surprise that recent surveys show greater optimism about the future among EM millennials than their western counterparts.

Article by Laurent Saltiel, Sergey Davalchenko, Naveen Jayasundaram, Kate Huang of AllianceBernstein, Read the full article here.