Vietnam, Bangladesh and India will see the largest increase in consumer spending in the current decade. The number of consumers in China with an income of more than 50 USD/day is expected to reach about 420 million by 2030, which shows the dominant trend in the global consumer market in Asia in 2030.
A corner of Chongqing city, China. This country is forecasted to have 420 million people in 2030 with an income of more than 50 USD/day. Illustration: Shutterstock
According to HSBC’s Asia Consumer Market Report 2030, the rise of Asia’s upper middle class (the group of people with incomes between 50 USD and 110 USD a day) is the driving force behind the consumer market. Economist James Pomeroy has built a proprietary demographic database that shows changes in income and spending in Asia.
Specifically, comparing countries in the region, Bangladesh is expected to have the fastest growth in consumer markets in the current decade (i.e. population earning more than US$20/day at constant purchasing power parity (PPP)).
Followed by India, Philippines, Vietnam and Indonesia. By 2030, the population with an income of more than 20 USD/day in Vietnam will surpass that of Thailand. Korea and Japan are forecast to see a decline in overall market size by 2030.
However, in terms of size, China is expected to continue to maintain its dominant position as the world’s largest consumption market with the number of consumers in this country earning more than 50 USD/day; expected to reach about 420 million people by 2030. Thereby, recording a compound annual growth rate of 8.4% while the US only reached 0.5% (same period).
In Southeast Asia, the group of people with incomes from 50 to 110 USD/day in Indonesia is expected to grow by an average of 13%/year, in Vietnam is expected to grow by an average of 17%/year in the same period.
Also according to HSBC’s report, when income increases, people often have a need to buy different items. Spending on entertainment and transportation is expected to grow the fastest, at more than 7% a year in the current decade. In contrast, spending on food is expected to grow the lowest, at only 5% per year over the same period.
Vietnam, Bangladesh and India are the three countries expected to see the largest increase in consumer spending in the current decade. Sectors such as financial products, entertainment, automobiles, computer equipment and home services will grow the fastest across Asia. In particular, financial services are the category that will grow rapidly in most countries in the ASEAN region, India as well as China.
@ Saigon Tiep Thi
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Source: Vietnam Insider