The world’s consumers are changing. Women are increasingly important consumers. Rising Asian incomes and rapidly growing cities are pulling global spending eastwards. And younger populations are starting to dominate demand.
Women already influence most spending decisions globally. They purchase goods and services for their entire household, including elderly dependents. US women control 85 per cent of consumer spending and will have $27 trillion of personal wealth by 2020 suggest some estimates.
However, as more women work – especially in countries such as Japan and Germany with shrinking working-age populations – and as gender pay-gaps narrow, a greater share of the growing female income pool will be spent on themselves.
Indeed, fewer people are getting married, while those that do are marrying and having children later. Even in China, where marriage rates have risen, the UN estimates that this trend will reverse, meaning women will spend more on themselves.
Female tastes differ from men’s, however. Surveys suggest women are more willing to shop online, savvier in comparing prices, and keener to embrace mobile shopping. They buy healthy food, and millennial women – aged 23 to 38 – are more influenced by recommendations from friends or relatives and social media than by TV, advertising, or celebrity endorsements.
Meanwhile Asia is deciding the global economy’s direction. The countries with the highest potential growth over the next decade are overwhelmingly in that region. In 2019 and 2020, China will add more to global growth than the US, and India more than the Eurozone, supporting greater spending on consumer products, particularly luxury goods.
Even though working-age populations are now shrinking in China, Korea and Thailand (like Japan), more Asian consumers are joining the highest spending age group, 35 to 64 year-olds, with incomes rising quickly.
Rising wealth per person and growing populations mean emerging-market Asian countries will contribute about 55 per cent to global growth over the next decade, with their share of global GDP rising from 26 per cent to nearly 35 per cent.
Consumption should rise even faster than GDP as domestic services are bought by a middle-class set to double over the decade. This rising wealth allows increased overseas tourism, which lifts other countries’ growth.
Young spenders are the third major influence on consumption. In developed countries, roughly 15 per cent of consumers are under 30 but that will double over the next decade. In the US, Millennials will this year outnumber Baby Boomers (55-77 year-olds) as the largest adult cohort and half of India’s population is 27 or younger.
Today’s youth will become the world’s consumers as its income and spending increases and, eventually, some of its wealth may pass down to a new younger generation.
But today’s youth has differing tastes. They worry disproportionately about the environment and demand goods and services advertised as sustainable, organic, antibiotic-free, fair-trade or cruelty-free. If finances permit, they favour electric vehicles.
Today’s younger generation is less likely to drink alcohol or smoke cigarettes, more likely to exercise and be vegetarian or vegan. For now at least, they are fitter. And for the future, the young, women and Asia will set the consumption agenda.
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