Asia’s growing middle and upper-middle class

China, India and other newly industrialized countries have now “reached a tipping point” where more and more people are growing into the middle class and drive consumption. In fact, consumers in those countries now want to have access to an “equal” standard of living to North America/Europe/Japan. Cars, laptops, cell phones, access to education/healthcare are all goods or services that the booming middle class is “hungry” to have. This emergence of a large and dynamic middle class raises Asia’s profile as an attractive market destination.

- The World Bank has estimated the global middle class to grow from 430 million in 2000 to 1.2 billion in 2030 (defining the middle class as earners making US$10-20 a day - a range of average incomes between Brazil and Italy). China and India will account for two-thirds of the expansion;

- Furthermore, and according to the World Bank: the major global drivers of world economic output and the most populous states in the world, China, India as well as Indonesia hold the biggest potential.

This of course generates growing opportunities for companies willing to expand into Asia.

Euromonitor International further details interesting facts in that regard:

- “The average per capita consumer expenditure in emerging economies is expected to reach US$6,490 in constant terms (2009 fixed exchange rates) by 2020 (from an estimated US$4,381 in 2010). These levels are still low compared to advanced economies with per capita consumer expenditure averaging US$28,067 in G7 economies by 2020”.

- “By 2020, the population aged 0-29 will constitute 53.3% and 56.9% of the total population respectively in India and Philippines compared to 34.2% and 33.1% of the total population in Russia and China”;

Finally, it is important to note that “middle class earners in emerging economies are savers by nature despite growing levels of annual disposable income. The savings ratio as a percentage of disposable income is expected to remain high in most emerging economies.”

Next week will talk about “the rapid urbanization” as many, if not all, of the middle class consumers reside in large urban centers.

Number of households with annual disposable income of US$5,000-15,000 in selected economies: 2000-2020

Source: Euromonitor International from national statistics