AllianceBernstein emerging consumer portfolio manager Tassos Stassopoulos said investors should “think twice” before buying shares in companies that sell products and services to the ageing populations of emerging markets as they are not the same as those in developed countries.
“Populations are ageing in the top 12 emerging economies at twice the rate [of] their developed counterparts, and this may seem like a chance to sell goods and services normally associated with older people,” Mr Stassopoulos said.
“[But] investors should think carefully about how they access the opportunity,” he said. “Our research suggests that this would be the wrong strategy.”
Mr Stassopoulos said trends suggest the socio-economic aspects of ageing populations in emerging markets differ from those of developed countries, which could impact heavily on investors’ plans to invest in companies that sell products and services to them.
“Many employees in their late 40s are in fear of losing their jobs as a younger, hungrier and more skilled generation is coming through,” Mr Stassopoulos said.
“Indeed, many older workers are either losing their jobs for this reason or are reluctant to pursue higher salaries for fear of jeopardising their jobs,” he said.
Mr Stassopoulos said this trend is having two effects that investors should consider – workers within emerging countries reach their peak income level at very young ages and they are not achieving financial security.
“Instead of ending their lives at a comfortable level on the social pyramid, they are dropping through the social classes,” Mr Stassopoulos said.
“This means that, far from wanting to spend money on cruises or expensive medicines, ageing people in emerging countries want to buy cheap goods for day-to-day consumption,” he said.
“They are not interested in luxury or leisure; on the contrary, they are totally focused on value for money.”
