Asia Pacific, with large populations, rising incomes and expanding middle classes, is a region with great consumer market potential. In 2023, it is set to overtake North America as the region with the highest total consumer spending. However, Asia Pacific is also a region with grave income disparities and rising income inequality, which require companies to adopt a granular approach. The region’s gender income gap is also set to widen, which will hold back some consumer spending growth potential. On the back of strong economic growth, total disposable income will rise robustly and boost consumer expenditure in the region.
Health goods and medical services and education will be the two fastest-growing categories in Asia Pacific. Conversely, leisure and recreation will be the weakest category due stagnant growth of packaged holidays, as middle class consumers become more confident travellers and increasingly opt for independent travel.
Companies seeking to do business in Asia need to adopt a targeted, granular strategy, as the purchasing power is highly uneven among different countries, age groups, gender and household types. Income inequality, which is set to rise in many countries, will further polarise consumer markets in the region.
Although strong economic growth has led to greater education and job opportunities for women in Asia Pacific, on the whole women are still expected to take on unpaid work such as raising children, and caring for the elderly. In 2030, Asian women are expected to earn 38.8% less than men, a widening gender income gap from 36.0% in 2017.
Single-person households had the lowest level of average spending of all household types in Asia Pacific as of 2017, but they are expected to be the fastest-growing household type in absolute terms over the long term. This is an important trend as it will shape the future demand in many categories.