Consumption in an urban world

Shifting demographics are causing a major rebalancing of the engines of global consumption. In the past, an expanding population was a main driver of consumption growth, but now the pace of the world’s population growth is waning.

This means that consumption growth in the period to 2030 will depend overwhelmingly on individuals spending more. It is now even more important to know which consumers will have the purchasing power and the inclination to spend, where they are, and what they want to buy.

Nine groups of consumers to follow

Recent McKinsey’s study finds that just nine groups of “consumers to watch” are projected to generate three-quarters of global urban consumption growth from 2015 to 2030.

Of these, just three groups have the scale and spending power to reshape global demand and the world economy. Together, the 60+ age group in developed economies, those of working age in China and the working age population of North America, are expected to generate half of urban consumption growth to 2030.

Patterns of consumption are becoming more varied and complex and non-related to average consumers in average markets – if there ever were such descriptive terms. Emerging economies with richly varied incomes, cultures, and spending habits are becoming ever more prominent features on the global consumption landscape as incomes rise.

At the same time, income inequality is rising in many countries, which means that companies face the challenge of attracting customers at very different price points. The weight of global consumption is shifting toward services, reflecting the aging of key consumer segments in developed economies and rising incomes in emerging economies. And cities, already very different in their consumer profiles, could diverge even further from one another as population growth slows.

In the face of this ferment of change, companies need to arm themselves with deep knowledge about the geography of consumers as well as the structural drivers of their spending, from ethnic and income trends to the changing timing of major life decisions.

DASO possesses considerable knowhow and expertise in Corporate Strategies’ Diversification that converge the Socio-Demographic factors and the Consumer Expectations to their Disposable Income.

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