Where some see problems, others opportunities. The record level of smog that cloaked Beijing earlier this year sparked a turnaround in the mindset of Chinese consumers, that fund managers should not ignore.
So says Shaun Rein, MD of China Market Research and one of the more perceptive commentators on China’s consumer boom.
He told a bunch of China fund managers at the Citywire Asia 2013 event that consumers have really woken up to the issue of pollution, particularly now that they can be constantly informed of air quality via dedicated pollution monitoring apps installed on their smartphones.
These apps gave Chinese consumers the power to gauge the severity of pollution, which could hit highs of 500 to 700 points. In Los Angeles, the same app gives a reading of 30, says Mr Rein.
They are also much more concerned about food quality issues after the health scare involving KFC chicken meals, whose sales are still slumped.
Apart from buying vendors of face masks, how can fund managers play these investment themes?
One can predict a boom in demand for testing and QA services — see this earlier story — and also for food suppliers that consumers feel they can trust, such as producers of Manuka honey, high-end dairy and good quality meats.
Another consequence of the chronic smog is people are less inclined to go outside to do the shopping, so sales of hypermarkets have suffered while e-commerce is booming.
More investment ideas from Shaun Rein in this Citywire story.