🎯 South Korea's population collapse

Welcome back to another issue of Trendline!

Tariffs continue to dominate headlines as markets prepare for another volatile week.

But in today’s newsletter, we’re stepping back from the noise to focus on long-term trends—ones that will shape not just the next few years, but the coming decades. These shifts matter not just to investors, but to society as a whole. Let’s dive in 👇️

1) South Korea’s Demographic Crisis: South Korea’s population is set to shrink 74% by 2100, from 51.7 million to just 13.5 million. With a fertility rate of 0.75, the lowest in the world, the country faces a population collapse in future.

South Korea, world’s 13th largest economy, has seen rapid increase in income levels over past many decades. However, the future is uncertain.

As population declines, there will high fewer workers and aging population (with higher cost for healthcare, social security).

Despite govt incentives like cash bonuses, parental leave, birth rates haven’t risen much (there was a slight jump from 0.73 to 0.75 in 2024). High living costs, long work hours and traditional attitudes towards family/childcare are some of the reasons why people are avoiding having children.

2) Eroding US Middle Class: In 1993, the middle class in US held 36% of all household wealth. The richest 1 percent held 18%.

Today, their lines have crossed.

The richest 1 percent Americans now hold more wealth than all of middle class, driven by rising asset prices, esp. stocks in the last 10 years, stagnant wages compared to inflation and high debt load (esp. student loans). The American society is getting more unequal every passing year.

3) Rise of GenAI as shopping assistants: This chart is ugly but the insight is important. According to Adobe, site visits to retail websites originating from GenAI sources (like chatbots) has increased 1200% from Jul-24 to Feb-25.

There is a clear consumer shift happening here which is important to note.

Consumers are starting their shopping journey on an AI-chatbot instead of Search (impacts Google’s search market)

According to Adobe’s survey: “In Adobe’s survey of 5,000 U.S. consumers, 39% have used generative AI for online shopping, with 53% planning to do so this year”. Main use cases are: Conducting research, receiving product recommendations, seeking deals, getting present ideas, finding unique products and creating shopping lists

4) Google’s Gemini 2.5 Pro is overall, the most intelligent model in the market now: Gemini’s launch was completely overtaken by ChatGPT’s model launch 2 weeks ago (at least it appeared so Twitter/X). According to Artificial Analysis - an independent comparator of LLM models, Gemini 2.5 Pro is overall, the most intelligent model in the market. The space at the top is getting increasingly competitive with new models launching every month - great for consumers, but where does the value accrue?

5) Electricity demand is picking up again: Demand for electricity was up 3% YoY in 2024. Forecasts are for much higher. Power hungry data centers, rise of AI, re-industrialisation in US (if Trump has it way) can all lead to a very long investment cycle based on electrification.

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