Dynamic and Upwardly Mobile: The Emerging Middle Classes Beyond BRIC

As I have said before many times on this blog, the emerging market slowdown does not mean that there are no longer opportunities for growth. Rather companies may have to search harder for opportunities – particularly beyond Brazil, Russia, India and China – and also work harder to attract the middle classes in these markets.

Some Key Facts to Consider

  • Between 2013 and 2020 emerging market economies will grow almost three times faster than developed economies;
  • By 2020, five of the world’s largest 10 economies will be emerging markets — China, India, Russia, Brazil and Mexico — accounting for a combined $47 trillion in GDP (in PPP terms)
  • In 2013 emerging markets are home to 85% of the world’s population and 90% of those aged less than 30;

All Emerging Markets are not Created Equal

In 2013, GDP per capita in emerging markets ranges from $438 in the Democratic Republic of Congo, to $104,775 in Qatar (in PPP terms). Thirty-three emerging markets have a per capita GDP below $2,000 in PPP terms but the same number have a per capita GDP of above $15,000.

They range from Tuvalu with a population of 9,900 to China, the world’s largest country, with a population of 1.4 billion in 2013; from Bulgaria with a median age of 42.2 years in 2013 through to Niger with a median age of just 15.5 years in the same year; and the United Arab Emirates where 87.2% of the population is of working age, to Niger where just 48.9% are aged 15-64 in 2013.

In 2013, 45 emerging markets have consumer expenditure above US$5,000 per capita, but 34 have spending below US$1,000. In a high-ranking market such as Chile, 69% of household budgets are available for spending on non-essentials (excludes housing, food and non-alcoholic beverages); while in a low-ranking country such as Kenya this drops to 47%.

Looking at the world’s 20 largest non-BRIC emerging consumer markets, and using the definition of those earning between 50% and 100% of gross household income, we can see that a middle class income ranges from around U$3,000–US$6,000 per household in Nigeria up to US$74,000–US$150,000 in the United Arab Emirates.

Middle Class Gross Incomes in Selected Emerging Markets: 2013

Beyond Bric Scatter Plot

 

 

 

 

 

 

 

 

 

 

Source: Euromonitor International from national statistics/Eurostat/UN/OECD

Note: Income range is based on a lower limit of 50% of gross household income and an upper limit of 100% of gross household income

Become Aquatinted with the Middle Class

One tactic to consider is to deepen your understanding of the middle classes beyond the BRIC markets. Are they typical nuclear families with father, mother, children and detached house, as is more familiar in the UK or USA? Or are they large, single-income households whose main shopper is penny-pinching and sceptical of new products? Are they savvy consumers who expect quality and convenience? Or are they new consumers who are still figuring out how to deal with all the choices in their new, local supermarket?

To learn more, click here to download our new White Paper Reaching the Emerging Middle Classes Beyond BRIC. The new white paper highlights key information about the emerging middle classes with insight into economic and demographic trends, including income and population growth, using information from Euromonitor’s Countries & Consumers system. It also discusses consumer spending priorities and lifestyle preferences, including habits, culture and beliefs, using key takeaways and insight direct from consumers participating in Euromonitor’s Middle Class Home Survey.