Global middle class consumption study released

Summary

The video highlights the rapid growth of the global middle class, which is transforming economies worldwide. By 2030, 60% of new consumer spending—over $15 trillion—will come from middle-class households, driven largely by globalization. Cities play a key role in this process, as they integrate more into the global economy. New technologies like digital devices and online shopping are changing consumer behavior, leading to increased demand for global brands. Businesses and policymakers must understand these trends to prepare for a future where consumer spending and lifestyle choices become increasingly similar across cities.

Takeaways

• 🌍 The global middle class is growing rapidly, becoming a significant force in the global economy.
• 📈 By 2030, 60% of new consumer spending will come from middle-class households, adding over $15 trillion in spending.
• 🗺️ Globalization is a key driver of this growth, integrating economies around the world and reshaping consumer behavior.
• 🏙️ Cities are central to globalization, with the Visa Globalization Index categorizing cities into global, globalizing, and non-global.
• 💡 The study shows that globalization's reach across cities is wide, with non-global cities having the potential to close the gap.
• 💸 New middle-class consumers are increasing their purchasing power, enabling them to buy premium global products and brands.
• 📱 Digital technologies like cell phones and computers are accelerating globalization by facilitating online shopping.
• 🌐 The sharing economy has rapidly expanded globally, demonstrating how consumer behavior shifts in response to new technologies.
• 👗 Consumer spending patterns are becoming more similar across global and emerging markets, especially in globalizing cities.
• 🔮 Two future scenarios suggest either some cities will decline while others grow or spending patterns will align with the most global cities in a short time.

Q & A

What is the impact of the growing global middle class on the economy?

The growing global middle class is reshaping the planet by unleashing an economic force that is expected to contribute to 60% of all new consumer spending, adding over 15 trillion dollars by 2030.

How does globalization contribute to the growth of the middle class?

Globalization, driven by the integration of economies, is a key factor in the growth of the middle class as it allows for the transformation of living standards and the inclusion of more consumers into the urban middle class.

What is the Visa Globalisation Index mentioned in the script?

The Visa Globalisation Index is a tool created for the study with Oxford Economics. It compares cities across five pillars critical to supporting a global culture and economy.

How are cities categorized in the Visa Globalisation Index?

Cities are divided into three categories based on their level of globalization: global, globalizing, and non-global.

What opportunities do less globalized cities have according to the study?

Less globalized cities have the potential to close the gap and bring more citizens into the middle class, which could lead to an increase in their consumer spending power.

How does globalization affect consumer behavior?

Globalization blurs boundaries between households across countries, leading to greater similarities in spending patterns, and influences consumer behavior through the adoption of new digital technologies and online shopping.

What is the role of digital technologies in globalization?

Digital technologies are critical components of globalization, leading to rapid shifts in consumer behavior and facilitating online shopping and the sharing economy.

How does the growing middle class affect global brands?

The expanding middle class increases the appetite for global brands across various sectors like foodservice and apparel, as these consumers have purchasing power beyond their basic needs.

What are the two alternative scenarios mentioned in the script regarding globalization?

The two alternative scenarios are: 1) a world where some cities decline while others grow, and 2) a scenario where globalization leads to spending patterns across cities becoming more similar to the most global cities in a short amount of time.

Why is it important for businesses and policy leaders to understand the insights from the study?

Understanding the insights from the study is critical for businesses and policy leaders to better predict consumption trends and prepare successfully for the future in a globalizing economy.