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By: Pavel Marceux

Urbanisation is the increase in the proportion of people living in towns and cities. The urbanisation of existing households either occurs because families move from rural areas to urban ones, or because an existing urban space expands and envelops suburban areas, or when an urban area is artificially created due to an inflow of development and investment.

Key Findings:

Urban households are surging

Almost every single country is seeing a gradual rise in urban households, with the trend especially pronounced in emerging markets with strong economic expansion. Countries such as Nigeria and China are witnessing unprecedented speed of city development, while in developed nations existing mega cities are stretching out to cover more households with suburban areas.

Urbanisation is creating new clusters of consumption

The city-driven phenomenon of single-person households, bigger uptake of household appliances and digital products, and more appealing property markets are just some impacts of more urbanised households. Companies able to take early-mover advantage can benefit from new audiences.

Overcrowding creates structural challenges

A growing number of households in limited urban spaces creates major overcrowding challenges for states. Overcrowding leads to chronic housing shortages and places tremendous pressure on urban infrastructures, such as transport, electricity, water supply, sewage and sanitation, which in turn affect the business environment of a country as a whole.

Soaring property prices create societal inequalities

As urban areas expand and envelop more households, property prices typically rise in the area. This process, sometimes under the guise of gentrification, is pricing out low- and middle-income consumers from local home ownership.

Savvy brands taking advantage of urban demands

Dairy and meat producers in China, Amazon’s internet retail operations in India, urban developers in London, and a gin brand targeting urban hipsters are just some examples of companies leveraging urbanised audiences.

Challenges:

As the number of urban households continues to surge across many economies, residents and state structures are facing rising challenges. Poverty, the decline in the concept of the family, higher unemployment, lower fertility rates, and the increased need for social, environmental and economic development are the unfortunate consequences of urbanisation.

Opportunities:

Rapid urban development and the appropriation of urban values is driving the growth of single person households globally. Urban consumers are much more likely to focus on their career or education and delay family life. Access to better urban health services extends life longevity, meaning elderly people are more likely to live as a divorced or widowed single person.

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