Asians to rule global consumer mart by 2020

MANILA, Philippines - The Asian consumer class is estimated to hit a whopping 1.2 billion by 2020, and it is perceived to be “the great seismic economic shifts of all time.”

In the Philippines, it is estimated to reach 43 million or roughly 40 percent of the country’s 110 million by 2020.

In a study conducted by the Australia and New Zealand Banking Group Ltd. (ANZ Bank) and the Roy Morgan Research, the “consuming class” will become a significant stabilizer of Asia’s economies.

“As Asia’s economies continue to grow, a rising proportion of their large population is entering the consuming class and increasing spending in key sectors such as household and consumer goods, transport and vehicles, and financial services,” the report, released over the weekend, said.

In 2010, the consuming class stood at an estimated 658 million and there are presently roughly 750 million people in the “consuming class” in Asia.

“Over the remainder of this decade, Asia will add nearly 90 million people to the consuming class every year,” it added.

The study covered China, India, Indonesia, Malaysia, Thailand, Vietnam, Cambodia, Laos, and the Philippines.

China and India will account for over two-thirds of Asia’s population estimated to hit over 3.3 billion, with a combined consuming class of over 900 million by 2020.

However, Thailand will reflect a larger consuming class segment as it would account for nearly 50 percent of its population of 72 million by 2020. In the same period, Malaysia would have an estimated 45 percent of its population classified with the consuming class out of its 2020 population of 45 million.

“The rise of the Asian consumer looks set to be a “mega-transition” that will occur more immediately and at a faster pace than many are expecting,” the ANZ report said.

As the consuming class continues to grow by 90 million people a year, demand for everything from homes to cars and everything in between will rise sharply. Moves into the “consuming class” in other economies as they industrialized have typically seen greater ownership rates of homes, home appliances and electronics, motor vehicles and motorcycles and increased demand for services such as financial planning, education, and healthcare.

The report said that consumer spending would become more responsive to changes in perceptions about future income growth, the economic outlook and sentiment.

ANZ Bank stressed that it is becoming more imperative that corporations and policy makers can gauge likely spending dynamics and the appropriate policy settings to manage that.

It said that the size of the global middle class will more than double from around two billion today to nearly five billion by 2030.

The relative share of the European and American middle classes will halve from 50 percent of the total to less than 25 percent of total by 2030.

Ongoing firm growth in Asia will cause Asia’s share of the new middle class to more than double from its current share of 30 percent.

China, India and Indonesia will dominate Asian, and therefore, global consumption trends, the report stressed.

By 2030, Asia will host 64 percent of the global middle class and account for over 40 percent of global middle class consumption.