This is the sixth edition of our global intelligence newsletter, Market Mosaic by Rwazi. How time has flown since we published our first edition and started the journey. And we just couldn’t be more excited you chose to read our cutting-edge market insights and global economic trends as a valued subscriber. 📈 You should be generous to give us your feedback in this survey.

This week’s edition dives into the shockingly shifting global consumer landscape. From China's abrupt spending slowdown to emerging market hotspots, we unpack the most important consumption trends you must know today and share.

Here we go into the insights together as we usually do! Shall we?

— Insights Team, Rwazi

Our Edition this week:

• Data Spotlight

• The Pulse

• Sector Scan

• Our Competitive Watch

DATA SPOTLIGHT
China's consumer spending engine stalls

Our data analysis found a significant slowdown in Chinese consumer spending across multiple sectors over the past six months. This comes after a decade of surging consumption fueled China's rise as a critical growth market.

In the technology sector, smartphone sales to Chinese consumers fell 27% year-over-year in Q1 2023. Market leader Apple saw China’s revenues decline 7.5% despite the launch of the iPhone 14. The luxury segment also felt the squeeze, with Estee Lauder's China sales plummeting 28%.

The drivers behind this spending pullback range from lingering COVID impacts and supply chain disruptions to rising youth unemployment and a slowing property sector. Local consumer confidence has weakened noticeably after years of ardent purchasing.

This abrupt deceleration necessitates a strategy rethink for multinational brands that view China as a reliable engine for top-line growth. Diversifying growth engines across emerging markets and building resilient revenue bases at home has become imperative.

Key Insight: After fueling growth for years, China's consumer market has hit turbulence — forcing a hunt for new spending frontiers.

THE PULSE
Featured Chart: Downward year-on-year change in China's Consumer Price Index (%)

SECTOR SCAN
Where are the next consumer hotspots?

As growth fundamentals soften in China, companies must rebalance their portfolios toward markets with more favourable consumer trajectories. Several regions appear poised to emerge as new spending powerhouses:

• Southeast Asia's rising middle class and young demographics signal a multi-trillion dollar consumption opportunity by 2030, per our analysis. Regional champions like Thailand and Vietnam could see spending surges.

• India remains a long-term prize given its massive youth population. Expenditure on consumer goods and services could triple by 2030 as incomes rise.

• -Select African markets like Kenya, Nigeria, and South Africa boast some of the fastest consumer spending growth rates globally, fueled by urbanisation and digital proliferation.

However, succeeding in these environments requires localising products and business models while navigating regulatory hurdles. In the end, companies willing to invest patiently could be rewarded.

OUR COMPETITIVE WATCH
Assessing the U.S. consumer resilience

While emerging markets represent future upside, the trajectory of U.S. consumer spending also remains critical for most multinational companies in the near term.

Leading indicators suggest the robust consumption levels of the past two years are set to moderate. Inflation-adjusted spending has decelerated from double-digit growth to 3% as of Q1 2023.

Digging deeper, concerning signals emerge: Revolving credit balances hit new records as stimulus savings were depleted. The personal savings rate dropped to 10-year lows.

Consumer packaged goods, hospitality, and discretionary retail are most exposed to potential belt-tightening. Companies in those segments must brace for a demand reset by shoring up pricing power, doubling down on loyalty programs, and protecting promotional efficiency.

Key Insight: After a spending binge, the U.S. consumer money reservoir is running dry — requiring defensive strategies.

WHAT’S HAPPENING AT RWAZI?
ICYMI: Feature on Alumni Ventures

We were featured on One Startup to Know, a series that examines some of Alumni Ventures’ most impactful and innovative portfolio companies. You can read the feature here.

Thank you for reading and joining us on Market Mosaic this week. We hope this edition provides valuable, actionable insights to decide with data. 📊 

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