To comprise 30% of global share by 2050, shows report
By 2050, India and emerging Asian economies will account for 30 per cent of global consumption in purchasing power parity, a substantial increase from 12 per cent in 1997
A report by the McKinsey Global Institute highlights a significant shift in global consumption patterns, with emerging Asian markets, particularly India, poised to become major contributors.
The study forecasts that by 2050, India and emerging Asian economies will account for 30 per cent of global consumption in purchasing power parity (PPP), a substantial increase from 12 per cent in 1997. In contrast, advanced economies such as North America, Western Europe, and Advanced Asia are expected to see their combined share of global consumption decline from 60 per cent in 1997 to 30 per cent by 2050.
Apart from India, the emerging Asian consumer markets include several rapidly growing economies such as Tier 2 and Tier 3 cities in China, Indonesia, Vietnam, The Philippines, Thailand, Malaysia, Bangladesh, Pakistan, and Myanmar.
The transformation underscores the growing economic influence of these regions, driven by rising incomes, shifting demographics, and evolving consumer preferences. The burgeoning middle class, rapid urbanization, and increased purchasing power in countries like India are key factors shaping future global consumption trends.
However, the report also cautions that market entry and expansion in these emerging regions can be complex due to intricate legal and governance environments. Affordability remains a significant concern, necessitating businesses to adapt their products, services, and pricing strategies to cater to a diverse consumer base.
Demographics play a crucial role in this shift. The rapid population growth and youthful demographic profile in many emerging economies are expected to drive more than half of global consumption over the next 25 years. This surge will be fueled by an expanding working-age population, higher disposable incomes, and increased consumer demand.
While opportunities abound, businesses in India and emerging Asian markets must navigate the complexities of these markets and ensure affordability to succeed in these rapidly evolving consumer environments.
