Study Focuses On Massive Growth In Numbers, Rapidly Changing Spending, Consumption Patterns
Although “Asia” is an astonishingly general term, encapsulating a vast and multifarious area, today a new study by the Asian Development Bank on Asia’s burgeoning middle classes offers some valuable insights into a suitably vast and multifarious group of consumers to whom many companies are looking for future growth. Among other findings, the report forecasts that the spending power of middle class consumers in Asia — which it defines as anyone consuming between US$2-20 a day — will increase by eight times in the next 20 years.
Additionally, in a finding that should surprise some who expect the Asian middle class to “decouple” from their Western counterparts in terms of spending habits, the report suggests that Asian and Western middle class consumers share — and will continue to share — a great deal in common.
[The middle class in Asia is] more likely to be educated, live in urban areas and have fewer children and more progressive values. But they are also prone to over-eating and under-exercising and are keen buyers of cars and household electronics.
Their rise “may present many challenges, but it will also open up new and unprecedented opportunities for the region and for the world,” the ADB concluded.
Not surprisingly, the biggest increase in middle-class Asians, who are estimated to number 1.9 billion now, will be observed in the two Asian giants with the largest populations, China and India.
China has so far been much more successful in elevating poor people, with 817 million or 63 percent of its population in the higher category in 2008, reflecting its much larger economy.
Although the report is mostly upbeat about the growth of the Asian middle class consumer — particularly as a counterweight to changing spending patterns among consumers in developed countries — it is quick to point out that rising incomes and living standards will likely cause new problems as well, such as rising rates of diabetes, heart disease and cancer. Additionally, the report goes on to warn that “climate change, environmental degradation, competition for water resources and land pressures are just some of the potential downsides of the rise of vast numbers of people seeking the material comforts familiar in the West.”
In a nutshell: good for business, bad for the planet.