10 Global Macro Trends for the Next Five Years

EXECUTIVE SUMMARY

1. An uncertain future

2. The emerging middle classes

3. The disaffected youth

4. The rich/poor divide

5. The climate challenge

6. An ageing world

7. The urban transition

8. People on the move

9. A more connected world

10. China goes global

Summary 1 Impact of macro trends on consumer markets over the next five years

INTRODUCTION

TREND 1: AN UNCERTAIN FUTURE

Trend outline

The Eurozone crisis drags on
The US’s looming fiscal cliff
Political uncertainty also takes its toll
Summary 2 Factors Contributing to Uncertainty in 2012
Developed markets face economic stagnation
Chart 1 Real GDP Growth Forecasts 2011-2016

Implications

Unemployment remains high as businesses unwilling to hire
Consumers remain cautious
Chart 2 Global: “In the next 12 months do you intend to change any of the following habits?”

Outlook

No change in sight
Spending will be uneven
Chart 3 Forecast Per Capita Consumer Expenditure Growth by Country 2011-2016

TREND 2: THE EMERGING MIDDLE CLASSES

Trend outline

A shift in global economic power
Disposable incomes rise fastest in emerging and developing markets
Brazil’s growing middle class
Turkey gets richer
Table 1 Per Capita Disposable Income by Country 2006/2011/2016

Implications

Spending on discretionary items set to rise
Table 2 Expenditure on Food and Non-alcoholic Drinks as % Total Expenditure in Developing/Emerging Markets 2006/2011/2016
Opening up new markets
The challenge for marketers

Outlook

Chart 4 Forecast Number of Households With Annual Disposable Income Over US$100,000, 2011/2016

TREND 3: THE DISAFFECTED YOUTH

Trend outline

A lost generation?
Voicing discontent
The extent of youth unemployment
Overqualified but inexperienced
Are mini-jobs the solution?
Table 3 Youth Unemployment Rate By Country 2006-2011

Implications

Delaying adulthood
Youth remain enthusiastic shoppers
Opportunities for the education category
Chart 5 Global Attitudes by Age Segment 2011

Outlook

TREND 4: THE RICH/POOR DIVIDE

Trend outline

Income inequality and social unrest
The pros and cons of wealth generation
Summary 3 Reasons for Economic Inequality
The extent of income disparity
Urbanisation causes growing divide in China
India’s rural-urban divide
Europe is more egalitarian
Table 4 Gini Coefficient by Country 2006/2011/2016

Implications

The rise of the super rich
Chart 6 HNWI Population by Country 2010-2011
Polarisation of demand
Demand for luxury travel
The poor seek value
Discounters benefit
Fast food increases budget offerings

Outlook

The need for reform
Progress will be slow

TREND 5: THE CLIMATE CHALLENGE

Trend outline

Summary 4 Regional impacts of global change

Implications

Food shortages and the battle for water
The poor will be worst hit
The droughts of 2012
Importing countries suffer the most
Meat prices set to soar
Biofuel also affected
Chart 7 Commodity Food and Beverage Price Index

Outlook

What can be done?
Consumers will be more willing to take action
Chart 8 Global Attitudes to Taking Responsibility for Climate Change 2011
Temperatures will continue to rise...
Summary 5 Global Climate Change: Future Trends
...Along with food prices
Meat to become a luxury

TREND 6: AN AGEING WORLD

Trend outline

Lower fertility, longer lives
Regional differences
Chart 9 Population of 65+ by region 2011/2016

Implications

Economic burden
Financial security will be a priority
Chart 10 Global Attitudes Towards Saving 2011
The pensions crisis
Chart 11 Forecast Old-Age Dependency Ratio by Country in 2016
Seniors to take more responsibility for their care
Opportunities for marketers
Focus on health
Adapting to an ageing consumer base

Outlook

Chart 12 Mean Age of Population by Country 2011/2016

TREND 7: THE URBAN TRANSITION

Trend outline

City growth speeds up
Urban-dwellers in majority since in 2008
Chinese and Indonesian cities to expand the fastest
Table 5 % Urban Populations 2006/2011/2016

Implications

Positives: rising incomes, growing demand
Negatives: Pressure on resources, pollution and social unrest
Different approaches to urbanisation

Outlook

The shift from West to East will continue
China to host more mega cities
“Citysumers” will form the bulk of new middle classes
Chart 13 World’s Largest Cities in 2016

TREND 8: PEOPLE ON THE MOVE

Trend outline

Economic migrants on the increase
The US melting pot
Italy and South Korea become more attractive to migrants
Chart 14 Number of Foreign Citizens 2011/2016
Remittance flows
Chart 15 Leading Recipients of Migrant Remittances 2011
Foreign study
Chart 16 Number of Foreign Students in Leading Host Countries2011

Implications

Filling the labour force gaps
Rich migrants fuelling demand for luxury goods
Creating diversity
Lack of integration

Outlook

Chart 17 Forecast Net Migration by Country 2006/2011/2016

TREND 9: A MORE CONNECTED WORLD

Trend outline

Internet use burgeons in developing markets
China and India drive growth
Obstacles persist in Latin America
Table 6 Number of internet Users by Country 2006/2011/2016
Access goes wireless
Smartphones for all
Table 7 Number of Mobile Phone Subscriptions by Country 2006/2011/2016

Implications

The world gets smaller
Online crime
Information overload
Global shopping
The growing importance of social media
The success of viral marketing
Crowdsourcing
Chart 18 Global Use of Internet by Activity 2011
Wireless communication
Chart 19 Global Frequency of Mobile Phone Usage by Activity 2011

Outlook

Internet user base to expand further
Cloud computing will be the way forward
Chart 20 Forecast Growth in Number of Internet Users by Country 2011-2016

TREND 10: CHINA GOES GLOBAL

Trend outline

A greater role in world trade
Overseas investments soar
Focus shifts to North America and Europe
Table 8 FDI Outflows – Top 10 Countries 2006/2011
Export growth
Chart 21 Exports from China 2006-2011
The rise of the Chinese brand
Learning from past mistakes
Lenovo becomes a household name
Raising the stakes in fashion
Bosideng establishes flagship store in London
Domestic brands fend off competition at home
Chart 22 Global Shares of Selected Chinese Consumer Goods Companies 2006/2011

Implications

The advantages of Chinese investment
The corporate responsibility challenge
The threat to Western brands

Outlook

Overseas investment will step up
The rise of the Chinese brand
Brands to watch
Summary 6 Top 20 Chinese Consumer Goods Brands 2011

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