Although the consumption of recreational and leisure goods and services is relatively low and uneven across the BRIC countries of Brazil, Russia, India and China, growth potential is substantial thanks to rising disposable incomes, a surging middle class, rapid urbanisation, greater online connectivity and also population ageing. Over 2014-2030, the BRIC leisure and recreational services market will grow by 132% in real terms, with India tipped to be the fastest growing market in the BRIC.
Per Household Spending on Leisure and Recreation in the BRIC: 2008 and 2013
Source: Euromonitor International from national statistics/Eurostat/UN/OECD
Note: Data are in constant 2013 prices, fixed exchange rates
Between 2008 and 2013, total consumer expenditure on leisure and recreation in the BRIC economies increased by 30.0% in real terms to reach US$233 billion. In 2013, the average BRIC household spent US$287 on leisure and recreation – anything from durables for recreation and culture (e.g. radio and television sets); recreational and cultural services; to gardens and pets; newspapers, magazines, books and stationery; as well as package holidays;
- The levels of per household consumption of recreational and leisure goods and services among the BRIC nations are uneven, reflecting the large income gap in the BRIC. In 2013, Brazil boasted the highest spending on leisure and recreation at US$997 per household while India had the lowest category spending at only US$54 per household.
Implications
The unevenness in the levels of consumer expenditure on leisure and recreation across the BRIC create different opportunities for businesses as well as shedding light on aspects of the grouping’s consumer market:
- Between 2008 and 2013, China was the only BRIC nation that saw a significant increase in per household spending on leisure and recreation. Chinese households upped their average leisure and recreational spending by 62.9% in real terms over the period, while per household spending on this category increased by a mere 0.4% in real terms in Brazil and actually declined by 4.7% real terms in both India and Russia over the 2008-2013 period. The poor performance of the leisure and recreational markets in Brazil, India and Russia were largely due to relatively weak economic expansion and sluggish income growth in these countries over the entire review period;
Real Growth Index of Household Annual Disposable Income in BRIC: 2008-2013
Source: Euromonitor International from national statistics
- Although China’s rising household spending on leisure and recreation can be in part explained by the country’s middle class expansion with rising disposable incomes, a massive population that is urbanising rapidly and strong growth in telecommunications are driving consumer spending growth in leisure and recreation. Between 2008 and 2013, the mobile gaming segment in China expanded by over 3,000% in real terms to reach US$135 million in total retail value, and yet substantial growth potential remains;
- Across the BRIC, visiting the cinema is a favourite pastime, with cinema attendances reaching 3.8 billion in 2013. India, with its insatiable appetite for Bollywood, leads the world (with 2.9 billion cinema attendances in 2013), while Brazil, China and Russia are ranked among the top 10 countries with highest cinema attendances globally. Although cinema attendances in India have been falling in the face of rising competition from other sectors such as pay-TV, gaming and online entertainment, Brazil, China and Russia have all seen rising cinema attendances over 2008-2013. In China, cinema attendances increased by 132% over the review period thanks to rising disposable income and a surging urban middle class that is keen to visit new shopping malls;
- The BRIC population is ageing rapidly. By 2030 the number of people aged 65+ in the BRIC countries will reach 512 million (from 248 million in 2013) and account for 15.5% of the BRIC population. Such a large number of older people, with their rising incomes, will make up a substantial market for leisure and recreation – particularly services and activities that cater for older people such as health resorts and spas, cultural services (for example, theatres, concert halls, and exhibitions) and package holidays.
Prospects
- Over the 2014-2030 period, total leisure and recreation expenditure across the BRIC will expand by 132% in real terms to reach US$568 billion by the end of the period, as the average BRIC household is set to spend US$571 on leisure and recreation in 2030;
- Per household expenditure on leisure and recreation in the BRIC remains low – particularly in China and India, suggesting significant potential for growth. In the period through to 2030, the fastest growing market for leisure and recreation will be India where total consumer expenditure on this category is forecast to increase by 208% in real terms;
- Driven by rising incomes and population ageing, package holidays will be the fastest growing sub-category within leisure and recreation in China, India and Brazil. China and India – home to the world’s largest over-65 populations in absolute terms – will see consumer spending on package holidays grow by 197% and 231%, respectively, over the 2014-2030 period.