Emerging Markets
Which is the World’s Largest Mobile Phone Market?
I have written before about the explosion of cell phone growth subscriptions in emerging markets. A new study by Euromonitor confirms that Asia Pacific is te world’s largest mobile phone market.
Some key points from the report:
- China has the world’s largest cell phone subscribers at 707 million in 2009
- Asia Pacific had 46% of the global total subscriptions
- The mobile phone penetration rate remains below global average in China and India
- In 2009, Asia Pacific had 2.1 billion phone subscriptions
Charts
Mobile phone subscriptions and population penetration rates in Asia Pacific: 2009
Real growth of per capita consumer expenditure on communications: 2004-2009
Capital Flows into Emerging Markets Gains Momentum
After a pause last year and in the first quarter of this year, net capital flows into emerging market economies has picked up in 2nd quarter and has gained momentum in the last quarter. Net private capital flows into emerging markets is projected to be $349B th year compared to $649B in 2008. In 2010, it is expected to reach $672 B. This is because historically a long low rate interest environment in developed will lead to higher capital flows to emerging markets.
Countries that are the receipents of the largest amount of portfolio equity investments are Asia (Korea, China and India), South Africa, Brazil and Russia.
The effect of all these capital flows into emerging markets are driving those markets higher. Asia and Latin America are leading the Emerging Europe as the chart shows below:
Sources:
Capital Flows to Emerging Market Economies, Institute of Internationl Finance
Impact of the Global Financial Crisis and Its Implications for the East Asian Economy, IMF
Top Destination for Foreign Direct Investment: Asia-Pacific Region
The FDI Magazine keeps track of FDI investments worldwide.”In the first six months of 2009, fDi Markets tracked 6644 FDI projects, representing a combined capital investment of $474.6bn and the creation of 1.3 million jobs.”
Compared to the same period last year, this was a decline of 14% .Despite the economic crisis, many large global firms continue to invest in foreign markets in order to gain a foothold and expand market share.
Foreign Direct Investment Tracking
Source: FDI magazine
The Asia-Pacific region remained as the top destination for FDI in 2009, attracting 32% of investments. In Asia, China remains the top country for FDI for the seventh consecutive year.
In terms of foreign direct investment, US companies are still the number one. For eg – US companies like Pepsi, GE are investing heavily in China to capitalize on its domestic growth.
Cost of Living Comparison: USA vs. Asian Countries
The research firm CLSA Asia-Pacific Markets has recently released an interesting study on the cost of living among various countries in Asia and the USA, the UK.
The chart below shows the Purchasing Power Parity of various currencies against the US dollar:
Click to enlarge
It costs 40% less to buy a basket of the same goods in Indonesia than in the US. However in Australia, Japan, Singapore and the UK it would cost more than a dollar for the same goods. The basket of goods used in this study are listed in the chart below.
The US $ price comparison of a basket of goods in different markets:
In the chart above, we can see that electronics goods and food items are cheaper in the USA than any other country. FOr example, an Apple i-pod costs $149 in the US compared to $170 in UK, $208 in India and $200 in Japan.
However monthly broadband internet costs $40 in the US, the second costliest in the chart.Asian countries generally have cheaper internet services with just $17 in Singapore and $18 in Thailand for the broadband connection.
The Toyota Camry costs the cheapest in USA. In Singapore, the same car costs more than 3 times the US price at $66,000+.
For more details checkout: Finally, A Sensible Cost Of Living Study – An Important Posting
Energy Demand to Soar in China and India
The International Energy Agency (IEA) projected in its 2008 World Energy Outlook that emerging markets’ energy demand will soar from thru the year 2030. Among the developing countries India and China are estimated to be big consumers of energy as the graph shows below.
Energy demand in developed world is estimated to be in slow growth mode. The OECD Observer article noted:
“Some of today’s largest energy consumers are of course not members of the agency, a fact that directly influences how we work. Our own projections show that non-OECD countries collectively will account for 87% of the increase in primary energy demand between 2006-2030, with China and India alone claiming over 50% of this growth.”
Emerging Markets Have The Highest Cell Phone Growth
Developing countries have the highest growth in mobile phone growth as per an article titled Dial Growth in the latest edition of Finance and Development magazine of IMF.
From the article:
“Just a decade ago, there were still some countries with no mobile service at all. Since then, wireless telephone coverage has enveloped the globe. Mobile phone subscriptions have skyrocketed from 1 billion in 2002 to an estimated 4.1 billion by the end of 2008, covering more than half of the world’s population. The fastest growth rates have been in low-income countries. In Africa mobile phone penetration has soared from just 1 in 50 people at the turn of the century to 28 percent.
The World Bank (2009b) says this growth has been driven primarily by new wireless technologies and liberalization of telecommunications markets, which enabled faster and less costly network rollout. The total number of mobile phones in the world surpassed the number of fixed-line telephones in 2002; and mobile phones now represent the world’s largest distribution platform.”
Charts:
Source: Finance & Development, September 2009, IMF
The article talks about how cell phones are changing lives in many African and other developing countries.
