Consumer class growth in China and India is a phenomenon that, over the past two decades, has been at the heart of strategic planning for companies big, small, and gargantuan. Both countries continue to be in focus despite the Covid-19 pandemic because the numbers of consumers continue to rise exponentially. In the West, primarily Europe and North America, on the other hand, while consumer growth is stagnating, households continue to get more affluent and therefore remain a primary market for goods and services. In the search for numbers and purchasing power, the critical mass for a market economy, the global consumer class ~ those classified as middle class and above ~ is the key. Since 2000, the Future Development blog launched by the World Bank says the global consumer class has grown by more than four per cent each year, reaching the milestone of four billion people for the first time in 2020-21. At the turn of the century, the global middle class was mostly a Western phenomenon; today, the consumer class is global and increasingly Asian. According to experts, spending by the Asian middle class exceeds that in Europe and North America combined. Against this backdrop, and with the projection of the growth of an African middle class with enough purchasing power to make it profitable for companies of some scale to do business on that continent coming a cropper, economists Homi Kharas and Wolfgang Fengler have identified five Asian countries apart from China and India which are under the radar at present but are likely, collectively, to prove to be the next big thing. Defining the global consumer class as anyone living in a household spending at least $11 per day per person, they point out that Asia will represent half of the world’s consumer spending by 2032. However, while Asia has more than half of the world’s consumers it only represents approximately 41 per cent of consumer spending. Today, there are 13 Asian economies in the top 30 countries in terms of the size of the consumer class. The forecast is that Bangladesh, Pakistan, Vietnam, Philippines, and Indonesia are the countries likely to show very large increases, in the tens of millions, in consumer class numbers by 2030. By that year, Bangladesh is projected to have a consumer class of 85 million (which will form 1.6 per cent of the global consumer class), Pakistan 121 million (2.3 per cent), Vietnam 56 million (1.1 per cent), Philippines 79 million (1.5 per cent), and Indonesia 199 million (3.8 per cent). These are cataclysmic changes which are on the anvil; not just economically, though that naturally is the primary takeaway, but also for the consequent geostrategic implications they will have. The spread of the consumer class in this part of the world where supply-chain-scale economies, digital platforms, and local preferences are being better understood and developed ought to be factored in by policy establishments in the region on an urgent basis.

Advertisement