Welcome to yet another issue of Market Mosaic, where you enjoy an essential brief of cutting-edge market insights and global economic trends.

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— Insights Team, Rwazi

Our Edition this week:

• Data Spotlight

• The Pulse

• Sector Scan

• Our Competitive Watch

DATA SPOTLIGHT
Consumer trends to look out for in 2024

This week’s insights are focused on the early signs of healing after a punishing consumer market inflation in 2023.

Off-the-charts commodity prices, monetary tightening, and food protectionism all created astronomical economic pain in 2023, as world inflation averaged 6.9%, the second-highest since 1996.

However, the tide may be turning now. While still quite elevated, inflation is forecasted to slow to 5.8% in 2024 from 6.9% in 2023. Global consumer confidence has also increased after hitting 2015 lows, while wallets are looking to reopen with 25% planning more spending.

The brightest outlooks are in Asia and Latin America. Indonesia, India, Mexico, Singapore, and Brazil with top optimism. This also contrasts with the ongoing economic caution in developed markets. Economists are forecasting inflation to remain moderate across major economies in 2024.

THE PULSE
Featured Chart: Housing, food top post-inflation consumer spending in H1 2024

SECTOR SCAN
Essential goods dominate spending

As consumers recover from the inflation surge, essentials will account for most expenditures going forward. We predict that housing, food, transportation, restaurants, and healthcare will gobble over 50% of spending in 2024 - reflecting demand for non-discretionary items.

While essentials like housing and food remain strong at 25% and 17%, respectively, the biggest shifts surface in more discretionary categories. We predict that transport spending will bounce back significantly, poised to rise 6% points to 14% in 2024.

This signals a tentative revival of experiences and mobility as consumers recover from the bunker mindset of high inflation times. However, these categories are more vulnerable if the economy falters. Further inflationary shocks or potential stagflation may cause consumers to retract again.

As consumer priorities shift in the inflation recovery landscape, brands across sectors must adapt go-to-market strategies thoughtfully. Pricing, messaging, product assortments, and channel approaches require localisation to resonate market by market. On-the-ground insights will prove invaluable for companies and business leaders aligning with rebounding demand to unlock post-inflation opportunities while retaining customer trust.

With consumer budgets still recovering, we believe affordability improvements can shift market share. Private labels, promotions, and economising innovations should be in the mix.

OUR COMPETITIVE WATCH
Brands adjust pricing strategies

Our analysis found consumer packaged goods (CPG) companies have taken different approaches to pricing amid inflationary pressures:

Commoditized categories saw widespread price hikes, with packaged food and household goods spiking 15-25%, directly passing through supply chain cost jumps.

Meanwhile, slight declines in promotional spending point to brands opportunistically retaining some pricing power amid demand resilience. Promotions fell 2-4% in categories like snacks and detergent.

In contrast, apparel brands balanced margins by cutting promotions 8-12% rather than raising base prices. Demand elasticity likely necessitated avoiding sticker shock.

Pricing power fragmentation across sectors reflects widening inequality. Mass brands balancing input costs and loyal value shoppers find themselves stuck in the middle.

Competitive intelligence is key. Tracking differentiated regional and category demand curves enables optimized pricing. Targeted promotions and private labels can improve access without eroding brand equity.

WHAT’S HAPPENING AT RWAZI?
Explore Market Mosaic insights further

As you keep staying ahead with us, we will also explore the market trends we discuss in the Market Mosaic newsletter and more. We will take a keen look at the unique opportunity to engage directly with our intelligence to not just predict the future of retail but reshape it together.

Learn, discover and explore more:

Thank you for reading and joining us on Market Mosaic this week. We hope this edition provides valuable, actionable insights to decide with data. 📊 You can also go read the archive of our past editions here.

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