3 billion Asians are expected to be part of global consuming class by 2030: Report

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Updated: November 13, 2021 6:30 PM

Movement within the consuming class will drive consumption growth in the region

A robust “singles economy” is also gradually emerging in Asia

The Asian market is witnessing a rise in diversity, along with rapid consumption growth. As per a report from McKinsey, the region offers a $10 trillion consumption growth opportunity over the next decade and the Asian consumers are expected to account for half of global consumption growth in the next decade. Three billion people in the region, 70% of Asia’s total population, are set to join the consuming class,  while only 15% of Asian population was part of the consuming class in 2000. The group of people who spend more than $11 a day in 2011 purchasing power parity (PPP) terms is defined as the consuming class.

One in every two upper-middle-income and above households is expected to be in Asia, the report added. While 80% of Asia’s consumption growth came from lower income tiers of the consuming class in the last 20 years, 80% of that growth is projected to come from higher-income consumers.

With a rise in incomes across the region, more consumers will reach the highest tiers of the income pyramid. As per the report, movement within the consuming class will drive the consumption growth than movement into it. While the cities are expected to drive consumption growth, the diversity of consumer class in the cities is also increasing significantly. For example, Insta-grannies in Seoul, Generation Z gamers in Surabaya, career moms in Manila, and lifestyle-indulging digital natives in Chengdu could emerge as the flag-bearers of the growth.

A robust “singles economy” is also gradually emerging in Asia as the average size of households is shrinking in most Asian countries over the last two decades. Currently, nearly one-third of households in advanced Asian economies and more than 15 percent in China are already single-person ones.

The population of Asian seniors, defined as individuals 60 and over, is expected to grow by around 40 percent over the next decade. Seniors’ consumption will grow two times faster than the consumption growth of the general population.

Furthermore, digitisation is also bringing some key changes in the economy. Digital natives, people born between 1980 and 2012, will account for 40- 50% of Asia’s consumption by 2030. If the gender gap is narrowed in the region, women’s empowerment could add 30% to Asia’s consumption growth by 2030.

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