Trends to 2030: middle class in Asia dominates, aging faster than America; multi-generational families re-emerging in developed countries, as nuclear families rise in developing nations.
The real story for the next two decades will be these countries’ shift to middle-class status. Although other emerging regions will undergo a similar shift, Asia will dominate this transformation.
A study by economist Homi Kharas of the Brookings Institution gives us a sense of the scale of this change. He estimates that 18 per cent of the world’s middle class lived in North America in 2009, while another 36 per cent lived in Europe. Asia’s share, including Japan, was 28 per cent.
But Mr. Kharas’s projections suggest that Asia will account for two-thirds of the world’s middle class by 2030. In other words, Asia will displace not just the West, but even other emerging regions. This is the real business opportunity.
Of course, the rise of Asia’s middle class is not the only change we should expect. We are in the middle of a social and demographic shift that will both destroy and create consumer markets. The aging of developed markets is well known, but the latest data show that emerging markets are aging at an even faster pace.
China’s median age today is 34.5 years, compared with 36.9 years for the United States. However, the average Chinese will be 42.5 years old by 2030, compared with 39.1 for the average American. The median Russian will be even older, at 43.3 years of age.
The impact of aging is already being felt in these countries’ education systems. The number of students enrolled in primary schools has fallen by 18 per cent since 1990 in China and by an astonishing 33 per cent in South Korea. At the other end of the demographic scale, the number of elderly people is growing explosively.
Meanwhile, the nature of the basic consuming unit – the household – is also changing rapidly. In most developed countries, the traditional nuclear family is in severe decline and is being replaced by single-individual households. In Germany, for example, 39 per cent of households consist of just one person. In the United Kingdom and the U.S., couples with children now account for barely 19 per cent and 22 per cent of households.
Nevertheless, it is not all about consumer atomization. We are simultaneously witnessing the re-emergence of the multi-generational extended family, with as many as 22 per cent of American adults in the 25-35 age group living with parents or relatives. By contrast, the extended family is giving way in India to nuclear families, which now account for 64 per cent of households.
Who are tomorrow’s consumers? | Sanjeev Sanyal | Aug. 11, 2012 | The Globe and Mail at http://www.theglobeandmail.com/commentary/columnists/who-are-tomorrows-consumers/article4476196/.