Asians makes up nearly 4.5 billion of the total 7.5 billion world population. Of which, China and India contributes nearly 1.4 billion each and Southeast Asia 640 million. However, while Asia currently accounts for 60 percent of the world's population, it only makes up less than half of the global middle class.
All of these are set to change soon due to the rapid economic growth in this part of the world, driven by urbanisation and industrialisation, led by China in particular. The global middle class is expected to grow by 160 million people on average per year until 2030, and Asia's share of this middle class is expected to increase to two-thirds by 2030.
Asian consumers are getting richer
Based on current estimates, global middle class spending is expected to be $29 trillion more in 2030 than in 2015. Of that amount, only around $1 trillion will be coming from advanced economies. Of the remaining $28 trillion, Asia Pacific’s spending represents the overwhelming majority, at 83%. Together, this expansion accounts for more than 85% of the growth of global middle class consumption. This makes Asian consumers a force to be reckon.
Not only that, internet penetration has risen sharply in Asia in less than a decade, from a mere 19 percent in 2010 to 42 percent in 2016 - a whopping 23 percent in just 6 years. Yet, at 42 percent, there exists plenty of room for growth, compared to the 81 percent internet penetration in developed economies. Take for example, internet use in Southwest Asia grew at an average rate of 124,000 new users a day in 2017, faster than anywhere else in the world.
They are also getting savvier
The share of internet traffic coming from mobile phones is disproportionately higher in emerging markets (e.g. Asia, Africa) compared to developed markets (e.g. North America, Western Europe). This is because mobile broadband plans are more affordable than fixed broadband in most developing countries. Furthermore, the market for low end smartphone has expanded rapidly in emerging economies, allowing people from different income groups to easily access the internet using mobile. Mobile broadband subscriptions have grown more than 20% annually from 2012 to 2017. In 2018, there will be 6.6 billion mobile broadband subscriptions globally.
They are younger and show increasing propensity to consume
Further fueling this trend is that millennials comprise a large share of the population in emerging economies like India, China, Indonesia, Pakistan and Vietnam. They are better educated than their predecessors, they enjoy better career prospects and command higher wages than their parents and grandparents. They are unequivocally the driving force of consumption in emerging markets. As the generation that came of age in digital, they have a high willingness to spend on e-commerce goods as well.
In short, the future of e-commerce will be in emerging markets. This is especially so in Asia where consumers are younger, getting richer, savvier and are increasingly more willing to spend. As a result of ecommerce, the barriers to entry for entering many of these markets which used to be prohibitive, has never been lower. The ease of exposing your brand to the largest consumer markets in the world has never been higher. For brands looking for the next growth story, Asia cannot be missed!
Comments