Rapidly urbanising households in emerging markets are creating a new market for technology. Newly urbanised households are lucrative as they aspire to fulfill possibilities unavailable to them previously in less advanced rural areas. Dairy and meat producers in China, Amazon’s internet retail operations in India, and urban developers in London are just some examples of segments leveraging urbanised audiences. This market is especially relevant in emerging markets with a rapid pace of urbanization.
A much more urbanised world
Urbanisation will continue apace through to 2030, with the year posting a record total in terms of households and people present in urban areas. Rural households are not contracting, but urban hubs are expanding at a much faster pace. Factors, such as immigration from poverty-stricken areas, cities expanding to incorporate more suburban and rural zones, and the creation of entirely new towns and cities, will drive urbanisation further. By 2030, some 5.0 billion people will be living in 1.7 billion urban households.
Apartmentalisation as a consequence of urbanisation
The onset of urbanisation is creating a boom in apartments. Countries such as China, Brazil and the UK will see surging growth in apartments through to 2030. Houses will, however, remain the predominant dwelling globally, outnumbering apartments two to one.
Apartments are seeing faster growth because they provide a solution for housing large numbers of people in a limited urban space; they have the capability to be made much smaller and therefore cheaper, which taps into demand among the urban and singleton consumer. Apartments provide much easier access to utilities and digital services, requiring fewer skills from a homeowner to look after their property.
Homes as digital consumption units
The rapid globalisation of Internet access and associated services is digitalising households at an unprecedented rate: By 2030, the majority of the world’s homes will have broadband internet, unlocking access to services including online video, gaming, gambling, social media, e-commerce, banking, e-health, e-education, and among others. This higher level of connectivity, with the help of devices like smartphones, tablets and smart TVs, will enable home trends that will transform consumption behaviour.
Mainstream companies are making the move into smart homes
Source: Euromonitor International
Basic appliances such as TV sets and cookers will remain the most common possession among households globally by 2030. The largest jumps in penetration over the review period will be seen in so-called luxury durables, like video game consoles, video cameras and freezers. The expansion of the middle class in developing countries will drive demand for these products, as rising incomes enable households to purchase added extras they might not have afforded otherwise. Falling prices for many durables is another factor.
Technology in the Home
Technology affordability and wider usage is driving home demand for greater digital features, including smart TVs, energy-saving devices and general household appliances. Homes are buying more domestic durables, such as fridges, air conditioners and microwaves, which are creating opportunities for companies to provide smart-home services and upsell smarter durables. E-commerce and payments will drive these purchases.