The Rising Influence of Rising Affluence

[DewDiligence]

An incorrect assumption investors often make about emerging markets is that profit margins there are lower than in so-called developed markets. Not true!

In #msg-59590988, I posted excerpts from recent PFE and ABT CC’s that illuminate this fallacy, and below is a blurb in the same vein with respect to 3M:

http://www.reuters.com/article/2011/02/09/3m-china-idUSN0917873420110209

China's contribution will rise to 9 percent of total sales by 2015 and 11 percent of its operating income, 3M chief financial officer Pat Campbell told a Barclays Capital industrial conference on Wednesday.

Margins in developing countries are 9 percentage points higher than the company average, Campbell said. Markets such as China, India, Latin America and Eastern Europe will account for 40 percent to 45 percent of 3M sales by 2015 from about 33 percent now, he said.