The Big, Big Trends

I have written that US schools are hemorrhaging money, Canada is looking relatively good when compared to America, and the FDA is regulating us to death, but all of these concerns (as important as they are) fall short when compared to some of the really big trends facing the world today.  One of them is the subject of this post.  There is a tremendous transformation going on across the globe right now and it presents perhaps the greatest opportunity of my lifetime – even greater than the rise of web technologies over the past two decades.  In fact, web technologies and mobile smartphones are going to help drive this transformation.

At least two billion people will become middle class consumers across more than a dozen emerging nations according to McKinsey Quarterly.   These consumers spend $6.9 trillion today and will spend over $20 trillion by the end of the decade – more than the GDP of the United States today and far more on a purchasing power parity basis!  These are simply staggering, almost incomprehensible figures.  Think about it -- $20,000,000,000,000.  You almost have to use scientific notation for numbers this large. 

These consumers live in countries where the median age is about 25 years old  (give or take).  Much of non-Japan and China Asia and Latin America fall into this category.  These new middle class consumers have very little debt.  For example, Brazil’s household debt is only about 2.2% of its GDP whereas household debt is about 100% of GDP in the US.  Guess which households are keeping their fingers crossed for low interest rates?  Emerging market youth live with their parents well into their 20s.  They save on rent and therefore have plenty of disposable income today.  They own iPhones.  They go to clubs at night.  These consumers are connected to the world wirelessly and are thrilled by the chance to learn about the plethora of options to buy, to see, and to experience new products and services.  The opportunities lie in providing these new consumers and their parents with the consumer goods and services they now have the money to buy.

In the next few years, consumption patterns across the globe will shift dramatically.  Once consumers have some money in their pockets and in the bank, they consume more than just shelter, basic food and clothing items.  They discover they want “housing,” and often “meat” and “apparel.”   With adroit marketing, these consumers can find out about all sorts of new needs.  And beyond the aforementioned basics, new entrants to the global middle class find they desire branded personal care products, transportation such as a motorbike or auto, entertainment, travel and leisure opportunities like gaming, healthcare and education.

Satisfying the changing consumption habits of the emerging global middle class represents the greatest single opportunity of the next 20 years.  Time to sign up focus groups in Hanoi and Rio de Janeiro.  Let the education process begin....