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Countries, companies, and customers are increasingly concerned with sustainability. What is unclear from a business perspective, however, is how much cost can be tolerated for sustainability efforts and what markets’ sensitivities are to product prices? The results of a large-scale study that I undertook with colleagues (article) indicate that product-market performance can be achieved even when costs/prices increase by 27 to 72%, and when companies implement sustainability efforts that are 5 to 30% above sustainability efforts of the company’s home country.

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China has been the world's number one importer of waste for the past 20 years. However, in an effort to address their growing pollution problem, 2018 marked the year China would begin banning imported recyclable waste from other nations. This ban applies to 24 types of materials including plastics, unsorted paper, textiles, and scrap metal and is predicted to include 32 more types by the end of 2019. As a result, countries around the world are scrambling to figure out how and where to dispose of their piling waste.

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2018 could be a very important year for the Chinese economy, with retail sales expected to exceed those of the United States this year.  In the past, China’s economy has been largely supported by its manufacturing businesses, but now, there is a decline in manufacturing and an increase consumer spending and importing.  Considering that China is the largest export economy for approximately 40 countries today, by the year 2030, many more countries may be relying on exporting to China.  This includes the United States, who currently purchase almost 20% of China’s total exports. In fact, China currently buys over 20% of total sales from major companies such as Apple, Boeing, and General Motors.  Many imports to China are coming from the United States, including approximately one out of every five cars sold in China.  One factor that has contributed to the increased spending by Chinese consumers is the fact that there have been increases in their incomes.  

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As early as last year, Japan’s Prime Minister Shinzo Abe announced that the country could expect a rate hike in consumer tax rates. Last year, it was slated to take effect beginning 2017, but the agenda has since then been moved up quite a bit. Economists are predicting the economic plan may take place as early as late 2016 or very early 2017, as opposed to the previously believed mid to late 2017 timeline. Japan is required first and foremost to think about its own economy and whether or not its consumers could handle another rate hike, but other global factors have become more pressing since Abe’s initial announcement in 2015.

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Earlier this year, we wrote about how the Brazilian e-commerce industry was growing rapidly despite a troubling economic state. This is due in part to the growth of an online payment system called EBANX. Partnered with local banks, this system allows Brazilians to make online purchases from international vendors. More than 60% of Brazilian citizens lack access to an international credit card, and before EBANX, this segment was unable to purchase from international e-commerce sites at all.

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With the holiday season on the near horizon, it’s crunch time for people across the globe to find the best deals on presents, especially those that aren’t usually affected by seasonal sales. This past weekend and subsequent “Cyber Monday” marks the annual event of the consumer discretionary sector marking down retail goods, offering exceptional savings for a very limited time. Generally, a jolt in sales due to Black Friday is expected to be a harbinger of a relatively healthier Q4 earnings report, especially if previous periods had stagnant growth or lackluster earnings. The holiday shopping season is vital to the fiscal success of many retailers and yet historically, sales during this time of year don’t follow any particular pattern or have any distinctly profound impact on overall economic trends. But for many, Black Friday is a time of year that can make or break a company’s financial statements.

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This year, economists expect that Brazil’s economy will shrink by 1% in real terms and by as much as 15% in dollars due to maxed out credit cards, rising inflation, and government increases on prices for fuel, electricity, and transportation. In the last year, consumer spending has stagnated and could even decline by 3% in 2015. However, the Brazilian e-commerce industry seems to be excelling despite all of these indicators. Price savings and the convenience of online shopping caused Brazilians to spend $30 billion online last year, which marks an increase of 9% since 2013.

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After nearly two decades of deflation, Japan unexpectedly has fallen into a recession in the third quarter of this year. In a preliminary economic report released by the Cabinet Office on November 17, GDP was reported as falling at an annualized pace of 1.6% in the third quarter of 2014. In combination with the previous quarter’s 7.3% decline, this GDP decline has caused Prime Minister Shinzo Abe to dissolve the parliament and call for snap elections two years before the next scheduled elections.

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In 2013, global meat production reached its highest level at 308.5 million tons, a 1.4% increase from the prior year. Due to a number of factors such as growing purchasing power, urbanization, and changing diets, the WorldWatch Report has determined that meat production has increased more than fourfold since 1961. The report was accompanied by a press release titled “Peak Meat Production Strains Land and Water Resources”, which additionally stated that meat production has increased 25-fold in the last two centuries. Although this has positive side effects for those working in the meat industry, the implications for the environment could be detrimental.

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As the world's second biggest economy, China is a mainstay for several countries who depend on it for their international services. Most of these tend to be neighboring countries on the same continent, but China's influence is not limited to Asia alone. With major business also being done in Australia and North America, China has proved that its reach is global. As a result, the impact of its attempt to rebalance its markets and economy will not stay within its borders, and will most likely affect economic policies everywhere.

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The price for a cup of coffee could rise in the coming months, as a fungus, known as coffee rust, hits the coffee crop throughout South and Central America. The fungus, which cannot be treated, has significantly affected much of the crop in several major coffee producing countries, such as Brazil, Ecuador, Columbia, and Mexico. In Guatemala, officials have estimated that an incredible 70 percent of the crop is infected, worrying farmers across the country who depend on coffee sales. The loss of such a large portion of the world’s coffee supply will force prices up, impacting people in countries around the globe, as well as many major food corporations that rely on coffee.

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Japanese consumers rushed to local retailers on March 31 to purchase large numbers of goods. Even online retailers, such as “Aksul”, had their systems overloaded by the high volumes of transactions of basic goods such as toilet paper and instant rice. Why were the Japanese people in such a hurry to purchase these products? This is due to the sales tax hike from 5 to 8 percent, which was implemented the day after, April 1.

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Since 1999, the music industry has experienced years of decline and for those who care about the industry, the past decade has been nothing short of a nightmare. With piracy increasing and record sales diminishing, many were worried that the music industry would never recover. However, recent reports from the International Federation of the Phonographic Industry (IFPI) shed rays of hope for the music industry. According to these reports, for the first time in 14 years, the global music industry experienced slight growth in trade revenues—increasing by 0.2 percent in 2012. Perhaps better news is that revenues are on pace to grow yet again this year in 2013. Could this signal that the global music industry has finally turned the corner and is poised to experience a new day & age of growth and profits?

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For the first time since last October, the Japanese economy has reported figures that do not include deflationary prices. Japan's core consumer price index, which includes energy but not volatile fresh food prices, rose 0.2 percent in May from April's recording of a 0.6 percent annual decline in prices. The Bank of Japan's fight against deflation, which has persisted for 15 years and caused the Japanese economy to fall behind China as the world's third largest economy, has set their sights on reaching a 2% inflation rate within the next two years. Prime Minister Shinzo Abe has also made fighting deflation one of his top priorities since taking office 6 months ago, which he claims has been the source of waning profits, wages, and consumption.

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There are a few key observations that many have noticed about consumers in this new economy:

  • Shoppers are less impulsive, more needs-based

Some say the recession made a correction in consumer behavior especially in the U.S. The means simply aren’t there for as much shopping on impulse. Those adjusting to changing consumer behavior are advised to in turn adjust their merchandise mix and price points accordingly.

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Here's how it could be possible:

Asian economies have recovered much better from the current economic downturn than many countries. Their industrial production has reached previous levels not seen since the global crisis hit. Less and less it seems to have been because of net exports and more because domestic demand fell. When a surge in food and energy prices occured, a tighter monetary policy curbed inflation but further squeezed the demand. The recovery has come from the ending of destocking by manufacturers and the large fiscal stimulus that most governments put forth.

However these are only temporary solutions. With exports forecasted to still be low in the near future, consumer consumption should become a forefront for the Asian economies.