Asia Set to Lead in Shifting Market Frontiers
Asia to become backbone of global economy
In 2017, Asia already accounts for over half of the global manufacturing output, but only 27% of consumer expenditure and 30-35% of key consumer markets such as retailing, packaged food, beauty and apparel. Asia will be home to some of the fastest growing economies. Myanmar, Bangladesh and Laos are forecast to record the fastest growth through 2016-2030. India and China are also set to pose strong growth in real GDP terms.
Asian consumer powered by growing disposable income
In 2017, 31% of the world’s consumer disposable income comes from Asia. By 2030, Asia is expected to add an additional USD12 trillion in disposable income, which is almost 55% of the global increment.China and India will remain the key contributors to the regions absolute disposable income growth on the back of greater urbanisation, strong economic growth and increasing population. By 2030, China is expected to be a middle class society, with 52% of the adults in the top income class, followed by 33% in the middle income group.
Asia to outpace global growth in luxury goods
Asia Pacific accounted for 39% of global luxury goods sales in 2017, the largest share compared to other regions globally. The region’s expenditure on luxury is expected to post a CAGR of 8% over 2017-2022 driven by increasing income and strengthening premiumisation trend. Notably India is expected to be the top performing country globally with a forecast CAGR of 12% by 2022, while China is expected to continue impressive growth in luxury goods at a CAGR of 10%, followed by Indonesia which is expected to grow by 7%.
Asia Pacific to drive majority of consumer markets
Asia will remain the key driver for consumer industries, however the region’s significance varies by industry. Consumer electronics and personal accessories will see close to 100% of absolute value growth coming from the region, while some of the more saturated industries such as tobacco, soft and hot drinks will see 20-40% of growth coming from Asia. In between, there are industries such as beauty, apparel and packaged food, all of which will derive around 50% of future growth from Asia.