GEMs: Transitioning upwards rapidly
From BoP survival spending to discriminating middle class customers
some of the world’s most successful companies are scrambling to compete for the buying power of consumers with an annual per capita income of between US $1,000 and $4,000.
Why? Because these are people who are in the process of making the transition from a state of having no disposable income—when, for example, a can of condensed milk is considered luxurious enough to offer as a gift—to gradually being able to afford a comfortable life. They are moving towards a lifestyle—typically referred to as middle class—characterized by stable housing, healthcare, educational opportunities, the ability to afford entertainment and family vacations, etc. During this transition, they are creating a rapidly growing demand for many products and services: household goods (i.e., refrigerators), health care products and services, transportation, packaged food and drinks, mobile phones and online services.
This group of people are part of a global emerging middle class (GEM) and the numbers are huge, as is their combined buying power. By 2025, for the first time in history, more people will be middle class than poor and they will account for $30 trillion—nearly half—of global spending (source: McKinsey Global Institute). In 2009, 1.8 billion people comprised the global middle class (525 million were in Asia), and numbers are projected to rise to 3.2 billion by 2020 and 4.9 billion by 2030 [Source: OECD]. This growth will largely be in the developing world: by 2030, Asia will represent 66% of the global middle class population and 59% of middle class consumption.
This extract and chart sourced from darynform’s article on Assante
