Investors hoping to cash in on the growth in the Chinese consumer sector should look at China-focused companies that are not listed in the mainland, says one expert.
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Man and woman with shopping bags in mall
J. West Riggs, Head of Asia Equity Capital Markets at investment bank Piper Jaffray, says investors don't have to tap Chinese markets directly to benefit from its growing consumer sector. "You can step outside and think about some of the more multinational companies that are very focused on China growth," he told CNBC Asia’s “The Call".
Riggs says rising wages in the country means consumers have more money to spend, and that will drive growth in spending on discretionary items and staples.
He recommends multinational companies in the luxury sector. He picks Gucci and Prada , and suggests investors buy Prada’s Hong Kong listed stocks and gain from its expansion strategy in China.
He also singles out Starbucks and Apple as companies to watch. "Starbucks is growing incredibly fast in China. Apple's first quarter revenue (there) grew 5 times," he said.