Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it.Issuer of report: The Hongkong and Shanghai Banking Corporation LimitedView HSBC Global Research at:https://www.research.hsbc.comVoting opens 1st June – 21st AugustIf you value our service and insight, please voteClick here to voteAsiamoney Brokers Poll 2020 Tectonic shifts ahead in the next decade; India’s population should grow bigger than China, while China’s is set to shrink Meanwhile, Asians are living longer, residing in smaller households, flocking to mid-tier cities, and saving more We identify some big picture implications: empty-nesters trading up, a female future, and rising spending on health We build on our previous research on Asia’s demographics with a new series. This report focuses on long-term investment themes shaped by demographics, while in the accompanying notes we work with fundamental analysts to highlight stock opportunities, starting with the consumer sector: Asia Demographics – Tectonic shifts ahead for the consumer sector, 4 August 2020. Big changes are not only around the corner... Before the end of this decade, India is expected to surpass China as the world’s most populous country, which should swiftly be followed by China’s population declining. Markets will start to consider the implications well before this happens. For instance, companies need to position themselves for slower volume growth, and instead work on their ability to raise prices – possibly by offering better quality products.…they are also happening now: Asians are getting older, living longer, and flocking to mid-tier cities. They’re also residing in smaller households while women are having fewer children and working more. All this impacts consumer spending. While COVID-19 continues to cast a shadow over the region’s economy, it is also accelerating some long-term trends that were already underway like more online shopping. An academic view: We also interviewed Dr. Stuart Gietel-Basten, Professor of Social Science and Public Policy at HKUST. He stated that it is possible for very low fertility rates to become more common in the region. Further, he suggested that it would be prudent to start planning for a time when families in Asia are not able or willing to care for their older members, and to start thinking about new types of insurance, care, and financial products to deal with this. Opportunities: (1) We expect Chinese ‘empty-nesters’ to buy more premium products – better quality at higher prices – on almost everything from food and clothing to home furnishings. (2) More women in the workforce, which contributes to higher household income and how it is spent. (3) New forms of urbanisation are unfolding too with growth higher in mid-tier ci...
