The world will add nearly 4 billion people into its middle-class during the next decade with the fastest growth in South Asia.
A new study shows the next generation of middle-class consumers will come from a belt of 12 nations that's centered in India, Pakistan and Indonesia and extends in both directions to Brazil and Nigeria.
The growth will require multinationals to develop fresh marketing strategies.
China will soon have company to share the attention it receives as the world's fastest-growing consumer market. That's because a new report says an area that's centered in South Asia and extends to China in one direction and then on to Egypt, Mexico and Brazil will produce the next one billion middle-class consumers.
"The number of new middle class members that are coming into a country in the next ten years, 400 million in India, about 190 million in China and 50 or 60 million in Indonesia," said Miles Young, chairman & CEO of Ogilvy & Mather.
"In recent history, 2 billion people have come to the middle class in the past, another billion are going to coming in. Where are they coming from most quickly? The answer is these countries in South Asia and China."
Some of the countries remain uncharted territory for international companies. Pakistan and Nigeria for example, may see their consumption prospects undervalued. The region's massive Muslim population will be a challenge as well.
"Many of these countries have strong Muslim populations. Even China has large size Muslims. They have special needs.Not many Chinese companies and multinational companies have Islamic branding strategies," said Miles Young.
But for the Chinese companies that have already established presence in those countries, building better brand images has become essential to winning over local markets.
Chinese petroleum & chemical giant Sinopec is actively building an international brand image as its overseas operations contribute a quarter of the company's total sales revenues.
"We've found that taking social responsibilities gives us great recognition in local markets. For example, we've built training schools and research institutions next to our refinery project in Yanbu Saudi Arabia. That allows local workers to improve their skills, and eventually helps oil producing countries move up the industry chain," said Lv Dapeng, director general of Corp. Communications, Sinopec.
The 12 new consumer markets will also see rising awareness in gender equality, increased connectivity, and higher preferences for local brands. That all points to a new land of opportunities for thoughtful international players.
The middle-class here in China refers to households with disposable income ranging from 9000 to 16,000 US dollars per year. The bracket from 16,000 to 34,000 dollars is considered upper middle class. It's estimated that by 2022, nearly 60 percent of China's population will be considered upper middle-class.
And undoubtedly, China will continue to account for the most consumers in the world with 1 billion middle class members by 2025. Meanwhile, India will see some 400 million people join the middle class in the next decade. That's the fastest rate in the world.
By 2025, the global middle-class is estimated to expand by 3 billion to reach 4.9 billion. Other fast risers that you might want to watch out for include Indonesia, Pakistan, Nigeria, Egypt, Vietnam, and Myanmar. These countries might not be rich yet due to various geopolitical and economic issues but they have the biggest potential to shine in the next decade and they are playing an impressive catchup game.