WEALTH

FOCUS
and DreamWorks. Theme parks are just one of the many battlegrounds
in the global fight for the attention – and money – of the fastest growing
consumer group in the world: the Asian middle class. From 525 million
in 2009, the number of Asians earning between $10 and $100 a day –
seen as the “global middle class” threshold – will increase to just over
3.2 billion in 2030, says the OECD. By then, Asia will be home to twothirds
of the world’s middle-class population. This growth could reduce
global trade imbalances, and bring better healthcare, education and
equality to countries in the region. Leading this shift is China, where
middle-class expansion is well underway. A 2013 study by McKinsey
suggests that by 2022, more than 75% of China’s urban consumers will
earn between $9,000 and $34,000 a year: in 2000 it was a mere 4%.
China is in the midst of a “growth sweet spot,” after per-capita
income reached the $6,000-a-year mark in 2008, believes Ernst & Young.
“History has shown that this level of income tends to trigger an
acceleration in domestic private consumption,” it says in Hitting the
Sweet Spot: The growth of the middle class in emerging markets. While
other developing Asian countries are yet to reach this state, they are
heading in a similar direction. Natalie Chun, an economist at the
Development Indicators and Policy Research Division of the Asian
Development Bank, pinpoints Thailand as being on the right track.
Vietnam also has a young population and a per-capita disposable
income set to rise by 150% to $3,400 per year by 2020.
But what of Asia’s second monster market, India? While it, too,
boasts favorable demographics, medium-term prospects remain
mixed. So far, India has struggled to increase the size of its middle class.
It grew from 1% of the population in 2001 to 3% in 2011 – “small by any
measure,” concluded a Pew Research study.
The evolution of
leisure: China’s
middle class is a
huge reservoir of
consumers able
to spend beyond
their primary
needs
“I believe it still struggles from infrastructural
issues,” adds Chun. “The differences across
states are so large, and policies are less
clear and coordinated compared to China.”
Nevertheless, Ernst and Young believes India is
primed to hit its sweet spot in the 2020s, with
475 million people belonging to the middle
class in 2030.
ONLINE AND SWITCHED ON
Over the last century, many countries have
seen their populations reaching levels of
disposable income that enable them to buy
more than the bare essentials. But widespread
Internet access is now making a difference
in this process. When the middle class
came to prominence in America or Japan, it
wasn’t possible to see Facebook adverts or
go shopping on Amazon. This change has
resulted in a huge spike in demand for
“western” products: in 2004, General Motors
32 • Allianz