It’s no secret that millennials and the emerging middle-classes in Asia are helping to drive growth in the region. 
Accounting for an estimated 45 per cent of the region’s population (and expected to grow to 60 per cent by 2020) millennials, in particular, are enjoying unprecedented levels of disposable income and they are spending in ways that would have seemed implausible to most a decade ago.
I’m not just talking about the basket of food they consume either. There are several other ways that Asian Millennials are changing their consumption habits and, indeed, the ways in which they are doing so.
Here, I explore three of the growing consumer trends in Asia and how I’m gaining exposure to them:
Technology: Disruption and the exponential use of smartphones
The penetration of the mobile internet in Asia Pacific reached 45 per cent of the population by the end of 2015. By 2020, the GSMA estimates this figure will rise to just over 60 per cent. Millennials that have grown up with technology – particularly in China as the one child policy has meant children have been indulged by parents and grandparents alike – and it is now an integral part of their life including how they interact.
Smartphones and associated apps are disrupting how we do everyday things across the globe. Nowhere more so than in Asia where moving money around, booking house cleaners, ordering food and taxis is now commonplace and can often be done in just one app.
It is estimated that millennials in Asia will have more spending power than any previous generation - estimated to be $6trn in disposable income by 2020. It also estimates that ecommerce spend in Asia is set to rise 300 percent to $2.6trn by 2020.
Trying to find the ‘next big thing’ is a challenging exercise and one which can be fraught with more failures than successes. Instead, we seek to gain exposure through companies with proven track records that consolidate fragmented markets. 
You only have to look to the West to see how the likes of Google, Facebook and Amazon have all come to dominate in their space. Over 50 per cent of all advertising spend in the US now goes online.
We invest in Tencent, which has developed smartphone technology so it now integrates with the consumer’s life. Though it started as a profitable gaming company it has moved into social media with its ‘We Chat’ app and now has 800 million users. Although it’s tempting to compare it to ‘Whatsapp’, it’s also China’s answer to Facebook, Spotify, Kindle and ApplePay all under the same ecosphere.
In terms of ecommerce we invest in JD.com, an Amazon-style service which buys, curates and delivers products. As a huge Chinese ecommerce business, it recorded $37.5bn in revenue in 2016, a full 44 per cent increase on the previous year.
Tourism & travel has taken off
Long gone are the days when money was spent purely on the basics like food and drink and housing. Now, and again particularly in the case of millennials who find themselves with more disposable cash, it’s all about experiences which means travelling. For the Chinese in particular, Hong Kong and Macau were the popular destinations but now they’re heading to South Korea, Japan and Europe. According to the World Travel & Tourism Council, the number Chinese tourists travelling internationally doubled in 2015 to 120 million. They spent $215bn abroad, 53 per cent more than in 2014.
An interesting way to play tourism is via the airports which are essentially national monopolies. Both Beijing Capital Airport and Shanghai International Airport are both of interest to us at the moment.
Another good company is Ctrip (though we believe valuations are currently stretched) which has consolidated the online travel agency business and is now a dominant operator in China. With millennials increasingly managing their lives online, it is well placed to continue and grow its dominance in the sector.
Having previously played on the Korean cosmetics demand, we are now looking at Samsonite which is Hong Kong-listed with much of its business coming from Asia. It has recently bought the Tumi brand and is a global leader in quality luggage. With tourism on the rise in Asia, the company is well placed to benefit from the trend.
Entertainment
General day-to-day entertainment activities that we might take for granted in the West like going to the cinema and eating out has, in recent years, become more of a staple for millennials in Asia.
There exists a huge under-penetration of quality cinemas with a rapidly growing demand, and, new multiplexes are being built across the region at an astonishing rate.
Indeed, it’s been estimated that China could overtake the US as the world’s biggest box-office market in revenue terms as early as late 2017 and is forecast to total $15.2bn, some 28.4 per cent ahead of the US’s $11.9bn by 2020.
We currently have exposure to IMAX China, the Hong Kong-listed subsidiary of the global brand of large format, high quality cinema experiences which is growing fast in China.
We also like Major Cineplex, based in Thailand, which is expanding across the region; the Korean-owned CJ CGV which is a leading domestic cinema chain is now developing a strong presence in China, Indonesia, Vietnam and Turkey, and PVR, which has developed a presence in India’s massively underpenetrated market.
In terms of restaurants, it’s not just the large international fast food brands that are expanding rapidly in the region, although we do have exposure to Starbucks in Indonesia through a company called MAPI there. We’ve also seen the emergence of a number of local, good quality food chains such as Fairwood, based in Hong Kong, which offers Chinese fast food at a reasonable price, and Breadtalk, a regional bakery chain that also runs the award winning Din Tai Fung Chinese restaurant chain; we’re invested in both.
Rory Dickson is portfolio adviser of the CC Asian Evolution fund. All views are his own and should not be taken as investment advice.