The new fave markets
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talkpolitics"Asia’s middle class is currently one of the fastest growing population groups in the world. While today Asia contains less than 25 percent of the world’s middle class population, the OECD sees this figure doubling in the next 15 years." (source)
For the purposes of their research, DB postulates that the middle class, in the most general, global sense of the term, encompasses people with an annual income between $ 15-150K. And by that metric, nowadays an increasing number of households from Asia are getting into this category. Meanwhile, in its research about the developing economies for 2010, OCDE determines as "middle class" those who could afford daily expenses between $ 10 / 100 (depending on the particular country). The same document predicts that by 2020 the middle class in North America would shrink to 10% from the global middle class. A decrease is expected in the share of Europe and Latin America as well. In comparison, over half the middle class households would be already in Asia.
But of course identifying the middle class is not solely based on the income. According to the marketing definition, it consists of "young and active people with an average or high income". They're highly educated and socially active. Which is why the growing of the middle class tends to bring an economic growth and increased political activeness.
All of this research is done from the premise that the middle class generates consumption, i.e. it keeps the wheel of the economy turning. So the dynamics of the middle class do matter. And the general understanding is that there's a pattern, showing that the consumer of the future is increasingly highly educated, older, and with higher income. He or she would tend to live more often alone, or with their parents. And now, very likely, living in Asia.
The expenses of the middle class in that part of the world will be growing more at the expense of those in North America and Europe. And yes, quite expectedly, the most promising Asian market is China. And not just because of its huge volume, but because the expectation that the real income of the Chinese middle class will keep increasing. And if the Chinese are usually associated with cheap labour, now their purchasing power is growing much faster than that of their US counterparts for example.
Apart from the fast growing Asian market, the profile of the consumers on a global scale is changing for another reason: the world population is growing. In result, the producers would have to adjust their marketing strategies to the changing demographic. That's the conclusion in DB's 2012 report about the long-term trends in global consumption, which included W.Europe, the largest economies in S.America, Russia, Japan and South Africa, and the emerging Asian economies.
The report also shows that in global terms, the gap between poor households (those with an annual income below $ 5K) and wealthy ones (above $ 150K) is widening at an increasing rate. Meanwhile, the GDP gap between the emerging and the developed economies is narrowing ever faster. And of course, Asia is turning into the most promising market, with the greatest potential for future investment. China is again a good example in this respect. The main factor here being not just the sheer size of its economy, but the leading position it occupies in terms of income growth, number of graduated students, etc.
Another interesting fact is that the accelerated entry of more households into the middle class category in the developing countries would re-draw the map of the global economy from the inside out. The OCDE forecast for 2030 for instance is that roughly 2/3 of the world's middle class would occupy the Asian-Pacific region.
And let's not forget that the number of university graduates in those economies is experiencing an unprecedented growth. And in principle, the better education is related to increased incomes. This surge is highest in China, India, Turkey and... Britain. China being the absolute leader, with a 740%+ growth for the last couple of decades. In comparison, in the US for the same period the increase fell short of the 50%s. But on the other hand, we shouldn't omit the fact that in the US a considerably larger part of the population is already with a high education (about 40%), while in China the university graduates are half that share.
These are the latest of a long string of reports, among other things turning the focus to the fact that the global population is aging. So far this seemed only a serious problem concerning mainly Europe. But UN data from last year indicates that this trend will be spreading to the emerging economies as well. And predictably, China is again the leader there. The share of people over 60 years of age has increased by 120% for the last two decades in China, and they already make for 1/5 of all elderly people globally.
The aging population has forced many governments to seek for ways to reform their pension systems. The retirement age which used to decrease until recently in some places, is now beginning to increase again, which can be a tough political decision for any government. And as far as the market is concerned, this tendency would ultimately reflect on the demand of goods and services, for instance those related to health care. The labour force would have a wider access to luxurious goods and tourist services for a longer period now, etc. Another curious fact is that the elder workers tend to be more prone to returning to the student's bench these days, and picking a new study and acquiring new knowledge and professional skills.
One of the most notable consequences from these demographic changes is the decreasing number of families of the "married with children" type. In emerging economies like China, Brazil and India, these are still about half of all households. But in economies like Germany, USA and UK there's been a steady tendency towards decrease. The most widespread are the one-member families (about 1/3 of all). A significant share of the population is the "boomerang generation" - more and more people aged 25-34 are returning home to live with their parents. All of this speaks of a tendency towards shifting the consumer habits and patterns that stem from the changing lifestyles. For example, young people who live with their parents are able to save more money from rent and mortgages, which in turn opens opportunities for consuming a wider array of goods and services.
For people whose well-being depends on making wise decisions about investing on this market or the other, it's undoubtedly of crucial importance to know their potential customers very well. I.e. where they shop regularly, how they travel to work, do they have children, where do they live and how and where do they spend their spare time. And, if the focus used to be on the West until not so long ago, now the investors are increasingly intrigued by the East. The reason is that within the next couple of decades, the Asian region promises to become the main market of goods, consumed by middle class households, as well as the luxurious segment. The outcome of the scramble for these emerging markets would vastly depend on knowning the intricacies of the customers that make them up.
For the purposes of their research, DB postulates that the middle class, in the most general, global sense of the term, encompasses people with an annual income between $ 15-150K. And by that metric, nowadays an increasing number of households from Asia are getting into this category. Meanwhile, in its research about the developing economies for 2010, OCDE determines as "middle class" those who could afford daily expenses between $ 10 / 100 (depending on the particular country). The same document predicts that by 2020 the middle class in North America would shrink to 10% from the global middle class. A decrease is expected in the share of Europe and Latin America as well. In comparison, over half the middle class households would be already in Asia.
But of course identifying the middle class is not solely based on the income. According to the marketing definition, it consists of "young and active people with an average or high income". They're highly educated and socially active. Which is why the growing of the middle class tends to bring an economic growth and increased political activeness.
All of this research is done from the premise that the middle class generates consumption, i.e. it keeps the wheel of the economy turning. So the dynamics of the middle class do matter. And the general understanding is that there's a pattern, showing that the consumer of the future is increasingly highly educated, older, and with higher income. He or she would tend to live more often alone, or with their parents. And now, very likely, living in Asia.
The expenses of the middle class in that part of the world will be growing more at the expense of those in North America and Europe. And yes, quite expectedly, the most promising Asian market is China. And not just because of its huge volume, but because the expectation that the real income of the Chinese middle class will keep increasing. And if the Chinese are usually associated with cheap labour, now their purchasing power is growing much faster than that of their US counterparts for example.
Apart from the fast growing Asian market, the profile of the consumers on a global scale is changing for another reason: the world population is growing. In result, the producers would have to adjust their marketing strategies to the changing demographic. That's the conclusion in DB's 2012 report about the long-term trends in global consumption, which included W.Europe, the largest economies in S.America, Russia, Japan and South Africa, and the emerging Asian economies.
The report also shows that in global terms, the gap between poor households (those with an annual income below $ 5K) and wealthy ones (above $ 150K) is widening at an increasing rate. Meanwhile, the GDP gap between the emerging and the developed economies is narrowing ever faster. And of course, Asia is turning into the most promising market, with the greatest potential for future investment. China is again a good example in this respect. The main factor here being not just the sheer size of its economy, but the leading position it occupies in terms of income growth, number of graduated students, etc.
Another interesting fact is that the accelerated entry of more households into the middle class category in the developing countries would re-draw the map of the global economy from the inside out. The OCDE forecast for 2030 for instance is that roughly 2/3 of the world's middle class would occupy the Asian-Pacific region.
And let's not forget that the number of university graduates in those economies is experiencing an unprecedented growth. And in principle, the better education is related to increased incomes. This surge is highest in China, India, Turkey and... Britain. China being the absolute leader, with a 740%+ growth for the last couple of decades. In comparison, in the US for the same period the increase fell short of the 50%s. But on the other hand, we shouldn't omit the fact that in the US a considerably larger part of the population is already with a high education (about 40%), while in China the university graduates are half that share.
These are the latest of a long string of reports, among other things turning the focus to the fact that the global population is aging. So far this seemed only a serious problem concerning mainly Europe. But UN data from last year indicates that this trend will be spreading to the emerging economies as well. And predictably, China is again the leader there. The share of people over 60 years of age has increased by 120% for the last two decades in China, and they already make for 1/5 of all elderly people globally.
The aging population has forced many governments to seek for ways to reform their pension systems. The retirement age which used to decrease until recently in some places, is now beginning to increase again, which can be a tough political decision for any government. And as far as the market is concerned, this tendency would ultimately reflect on the demand of goods and services, for instance those related to health care. The labour force would have a wider access to luxurious goods and tourist services for a longer period now, etc. Another curious fact is that the elder workers tend to be more prone to returning to the student's bench these days, and picking a new study and acquiring new knowledge and professional skills.
One of the most notable consequences from these demographic changes is the decreasing number of families of the "married with children" type. In emerging economies like China, Brazil and India, these are still about half of all households. But in economies like Germany, USA and UK there's been a steady tendency towards decrease. The most widespread are the one-member families (about 1/3 of all). A significant share of the population is the "boomerang generation" - more and more people aged 25-34 are returning home to live with their parents. All of this speaks of a tendency towards shifting the consumer habits and patterns that stem from the changing lifestyles. For example, young people who live with their parents are able to save more money from rent and mortgages, which in turn opens opportunities for consuming a wider array of goods and services.
For people whose well-being depends on making wise decisions about investing on this market or the other, it's undoubtedly of crucial importance to know their potential customers very well. I.e. where they shop regularly, how they travel to work, do they have children, where do they live and how and where do they spend their spare time. And, if the focus used to be on the West until not so long ago, now the investors are increasingly intrigued by the East. The reason is that within the next couple of decades, the Asian region promises to become the main market of goods, consumed by middle class households, as well as the luxurious segment. The outcome of the scramble for these emerging markets would vastly depend on knowning the intricacies of the customers that make them up.
(no subject)
Date: 28/8/12 15:46 (UTC)(no subject)
Date: 28/8/12 16:08 (UTC)(no subject)
Date: 28/8/12 16:15 (UTC)(no subject)
Date: 28/8/12 16:15 (UTC)(no subject)
Date: 28/8/12 16:26 (UTC)(no subject)
Date: 28/8/12 16:29 (UTC)(no subject)
Date: 28/8/12 18:20 (UTC)(no subject)
Date: 29/8/12 04:41 (UTC)(no subject)
Date: 29/8/12 09:03 (UTC)(no subject)
Date: 28/8/12 15:57 (UTC)(no subject)
Date: 28/8/12 16:10 (UTC)(no subject)
Date: 28/8/12 17:19 (UTC)A more interesting question to me is how the EU and USA try to adjust to this, as the EU's ability to handle finance has been measured on the balance scale and found wanting, and the USA's ability to handle a crisis isn't any too much better.
(no subject)
Date: 28/8/12 19:50 (UTC)Why, the former would throw a fit while the latter would blow a fuse.
(no subject)
Date: 28/8/12 20:15 (UTC)(no subject)
Date: 28/8/12 17:15 (UTC)(no subject)
Date: 29/8/12 05:05 (UTC)(no subject)
Date: 1/9/12 04:57 (UTC)(no subject)
Date: 1/9/12 07:18 (UTC)(no subject)
Date: 1/9/12 07:34 (UTC)(no subject)
Date: 1/9/12 07:37 (UTC)http://www.guardian.co.uk/world/2011/nov/11/china-rich-emigrate
The same is valid for the Russian millionaires. Someone who has money and wants the best investment climate and living conditions for themselves, would naturally want to move to a place with the best investment climate and living conditions.
(no subject)
Date: 3/9/12 13:29 (UTC)(no subject)
Date: 3/9/12 19:02 (UTC)Perhaps you can now see that the two migration events are very different with very different likely outcomes for both China and other countries to which the Money and talent migrate, specificially the US