With a rising consumer class in emerging markets, retail spending will only increase. Yet many of the most compelling emerging markets lack the retail infrastructure to support steadily rising demand. In addition, there is significant political risk and corruption to overcome in these markets. Currently, there is also the threat of inflation and slowing growth in some markets. Yet despite these concerns, the potential for investors to profit from the rise of the emerging-market consumer is enormous.
Because of the challenges Western companies face when bringing goods to new emerging markets, it pays to get creative. One way to overcome the lack of retail infrastructure in these appealing growth areas of the world is to go directly to the consumer. One firm that does this better than just about any other is Tupperware Brands (NYSE: TUP). The company, which grew famous in developed markets for selling its namesake products through in-home Tupperware parties, is bringing the party overseas. The company is growing rapidly in emerging markets, and I think it represents one of the safest opportunities for investors to capture emerging-market growth.
As I said, Tupperware specializes in using parties (which simply consist of neighborhood gatherings at a host's home) as its non-retail strategy to sell its goods. These goods consist of namesake lines of kitchen cookware and storage and serving products that can be used to store food, microwave leftovers and prepare food. It also sells a line beauty products, including cosmetics, toiletries and perfumes.
The company relies on an army of 2.6 million individuals that serve as its sales force. Last year, these individuals hosted 18 million Tupperware parties in about 100 countries. These social gatherings represent an easy method for Tupperware to sell in nearly any location in the world.