We’re witnessing a significant expansion in the global middle class. Over the next 15 years, it’s estimated that the middle class will expand by more than two billion people — and they will come almost exclusively from the emerging world. The majority – almost 90% of the next billion entrants into the global middle class will be in Asia. Harnessing that consumer spending trend may be a big opportunity.
Global spending by the middle class is projected to grow from $35 trillion in 2015 to $64 trillion by 2030, and over 65% of this growth in demand comes from Asia, principally China and India. In 2015, China and India together comprised 17% of global middle class consumer spend, but by 2030, they’re projected to make up 39%. And including the other Asia Pacific countries brings the projected share for emerging markets to about 57% of global middle class consumer spending.
Bottom line
There’s potential for investment growth in companies that could benefit from this expanding consumer base, and it will be a reoccurring theme for emerging markets investors.
Watch Ed Kerschner make the case for investing in the emerging markets consumer:
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“It’s three billion new consumers.” Source: Ernst & Young, “Innovating for the next three billion”, 2011.
“The consumer sector that is attracting you…where the growth is the best.” Source: Kharas, “The Emerging Middle Class in Developing Countries,” OECD Development Center, January 2010.
MSCI Emerging Markets (EM) Index is designed to measure the equity market performance in global emerging markets.
S&P 500 Index is a broad-based measure of U.S. stock market performance.
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