The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
The importance of urbanisation at a global level cannot be underestimated as it is transforming the world we live in. Euromonitor forecasts that by 2030, 70% of households worldwide will be in urban areas and that the growth in urban households globally is faster than that of total households, highlighting where the investment opportunities lie. This shift in household dynamics corresponds to changing population structure where we expect 60.2% of the world’s inhabitants to be urban dwellers in the same year. There will be an extra 598 million urban households in 2030 compared to 2010 although the corresponding trend of smaller households is also driving household numbers upwards. Urban consumers enjoy higher incomes than their rural counterparts with a leaning towards higher skills and educational attainment, so urbanisation results in greater consumer market gains. Despite obvious growth opportunities, the rise in the number of cities is accompanied by numerous challenges, especially when it is unplanned.
The rising proportion of urban households creates huge opportunities especially in emerging markets where urbanisation is occurring rapidly and from a low base. Euromonitor predicts that emerging and developing countries will account for three-quarters of total urban households in 2030. We will see heightened demand for all sorts of household goods and services; the construction sector will benefit from the need for more housing; and urban planning and infrastructure investment will rise.
Companies must strategise for the differences between urban and rural consumer demand. Urban households have a higher propensity for spending but will be smaller in size owing to greater population densities as well as being fewer in occupancy numbers (the global ageing trend also exacerbates the move towards smaller households). More households will require compact products and many urban consumers seek convenience to satisfy the needs of professionals “on the go”. Single-person households will be the fastest growing household type globally over 2014-2030.
On the other hand, urbanisation creates many problems such as rising crime, higher pollution and congestion levels, pressure on natural resources and urban public services as well as urban poverty or infrastructure deficits, which can end up hindering business environments especially if bottlenecks arise.