New Frontiers: Strategy Briefing on the Next Eight Emerging Economies

EXECUTIVE SUMMARY

Overview

Summary 1 Opportunities and Threats

Introduction

Chart 1 The New Frontier Markets Table 1 Overview of GDP and Population 2008 The rise of the G20

Global Snapshot

Chart 2 G20: GDP (2008 US$ billion) Chart 3 G20: GDP at Purchasing Power Parity (PPP) 2008 (US$ trillion) Chart 4 G20: GDP per Household (2008 US$’000) The crash (or not) Table 2 G20: GDP Growth 2007-2011 (% growth) The rise of the developing economies The market opportunity Chart 5 New Frontier Markets: Consumer Expenditure as a % of GDP (2008) Spending priorities Chart 6 New Frontier Markets: Share of Consumer Expenditure 2008 (%) Summary 2 Common Themes Uniting New Frontier Markets Increasing gap between rich and poor Chart 7 New Frontier Markets: Gini Index (2008) Chart 8 New Frontier Markets: Savings Ratio 2008 (% Income Saved) Urbanisation – gap between city and country Chart 9 New Frontier Markets: Urban and Rural Population (%) 2008 Table 3 New Frontier Markets: Trends in Urbanisation 1980-2020 Emerging middle class in emerging markets Table 4 New Frontier Markets: Household Average Annual Income by Decile 2008 The global and local middle classes Table 5 New Frontier Markets: % of the Population by Personal Income Band 2008 The first global generation – the impact of the Millennials Delaying commitment for career Chart 10 New Frontier Markets: % of the Population Aged Under 25 Years 2008 Youth unemployment Table 6 New Frontier Markets: Youth Unemployment (% Unemployed by Age Group) 2008

NEW FRONTIER MARKET SNAPSHOTS

Argentina

Political/economic context Table 7 Argentina: Economic Indicators 2004-2008 Social/demographic context Chart 11 Argentina: Demographic Profile 2008 Daily life Chart 12 Argentina: Household Structure and Ownership of Durables 2008 Consumption infrastructure Chart 13 Argentina: Grocery Retailers – % Share of Total Grocery Spending 2008 Consumer spending Chart 14 Argentina: Spending by Category – Trend (2004-2008 % CAGR) and Recessionary Impact (2007-2008 and 2008-2009) (%)

Indonesia

Political/economic context Table 8 Indonesia: Economic Indicators 2004-2008 Social/demographic context Chart 15 Indonesia: Demographic Profile 2008 Daily life A degree is no guarantee of employment Chart 16 Indonesia: Household Structure and Ownership of Durables 2008 Consumption infrastructure Chart 17 Indonesia: Grocery Retailers – % Share of Total Grocery Spending 2008 Consumer spending Chart 18 Indonesia: Spending by Category – Trend (% CAGR 2004-2008 ) and Recessionary Impact (2007-2008 and 2008-2009) (%)

Mexico

Political/economic context Table 9 Mexico: Economic Indicators 2004-2008 Social/demographic context Chart 19 Mexico: Demographic Profile 2008 Daily life Upgraded lifestyles Chart 20 Mexico: Household Structure and Ownership of Durables 2008 Techno transformation Consumption infrastructure Chart 21 Mexico: Grocery Retailers – % Share of Total Grocery Spending 2008 On-line shopping does not deliver sociability Consumer spending Chart 22 Mexico: Spending by Category – Trend (% CAGR 2004-2008) and Recessionary Impact (2007-2008 and 2008-2009) (%)

Poland

Political/economic context Table 10 Poland: Economic Indicators 2004-2008 Social/demographic context Chart 23 Poland: Demographic Profile 2008 Daily life Chart 24 Poland: Household Structure and Ownership of Durables 2008 Consumption infrastructure Chart 25 Poland: Grocery Retailers – % Share of Total Grocery Spending 2008 Consumer spending Chart 26 Poland: Spending by Category – Trend (% CAGR 2004-2008) and Recessionary Impact (2007-2008 and 2008-2009) (%)

Saudi Arabia

Political/economic context Table 11 Saudi Arabia: Economic Indicators 2004-2008 Social/demographic context Chart 27 Saudi Arabia: Demographic Profile 2008 Miss Beautiful Morals Daily life Chart 28 Saudi Arabia: Household Structure and Ownership of Durables 2008 The battle for health Consumption infrastructure Chart 29 Saudi Arabia: Grocery Retailers – % Share of Total Grocery Spending 2008 Consumer spending Chart 30 Saudi Arabia: Spending by Category – Trend (% CAGR 2004-2008) and Recessionary Impact (2007-2008 and 2008-2009) (%)

South Africa

Political/economic context HIV/AIDS continues to hit life expectancy Table 12 South Africa: Economic Indicators 2004-2008 Social/demographic context Poverty plus aspiration equals urbanisation Chart 31 South Africa: Demographic Profile 2008 Daily life Chart 32 South Africa: Household Structure and Ownership of Durables 2008 Mobile phones in more households than colour TV Consumption infrastructure Chart 33 South Africa: Grocery Retailers – % Share of Total Grocery Spending 2008 e-B2B Consumer spending Chart 34 South Africa: Spending by Category – Trend (% CAGR 2004-2008) and Recessionary Impact (2007-2008 and 2008-2009) (%)

South Korea

Political/economic context Table 13 South Korea: Economic Indicators 2004-2008 Social/demographic context Chart 35 South Korea: Demographic Profile 2008 An extra day to play Daily life Chart 36 South Korea: Household Structure and Ownership of Durables 2008 “Generation one metre” Consumption infrastructure Chart 37 South Korea: Grocery Retailers – % Share of Total Grocery Spending 2008 Luxury still appeals Consumer spending Chart 38 South Korea: Spending by Category – Trend (% CAGR 2004-2008) and Recessionary Impact (2007-2008 and 2008-2009) (%)

Turkey

Political/economic context Table 14 Turkey: Economic Indicators 2004-2008 Falling FDI Social/demographic context Chart 39 Turkey: Demographic Profile 2008 Daily life Chart 40 Turkey: Household Structure and Ownership of Durables 2008 Changing coffeehouse culture Consumption infrastructure Chart 41 Turkey: Grocery Retailers – % Share of Total Grocery Spending 2008 Consumer spending Chart 42 Turkey: Spending by Category – Trend (% CAGR 2004-2008) and Recessionary Impact (2007-2008 and 2008-2009) (%)

Future Outlook

Key drivers of change Table 15 New Frontier Markets: GDP Growth Rates 2009-2013 Rising “South-South” investment Table 16 New Frontier Markets: Unemployment Rates 2009-2013 Table 17 New Frontier Markets: Inflation Rates 2009-2013 Table 18 New Frontier Markets: Consumer Expenditure – Year-on-Year Growth 2008-2013 Jobless economies