Megatrends: Shifting Market Frontiers - Cities of the Future

November 2021

The briefing, Megatrends: Shifting Market Frontiers - Cities of the Future, examines the consumer and economic growth prospects in 600 cities of emerging and developing countries. Using a range of indicators including future GDP prospects, internet access rates, and disposable income trends, the report identifies 10 cities of the future which are expected to show the most favourable prospects for consumer-driven businesses.

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Key  Findings

10 cities of the future identified among 600 cities

Dhaka, Manila, Bangalore, Kuala Lumpur, Delhi, Shenzhen, Mumbai, Hefei, Xiamen and Ho Chi Minh City are the 10 identified cities of the future among 600 emerging and developing cities. Their robust performance is based on encouraging consumer spending prospects, large market size and rapidly growing consumer wealth.

Cities of the future are in developing and emerging Asia

All 10 identified cities of the future are in developing and emerging Asia. This highlights the robust consumer spending prospects for the region, which is anticipated to account for 44% of global consumer expenditure growth over 2021-2040.

Sub-Saharan African cities are fast growing but fail to appear in the cities of the future list

African cities are displaying fast population and economic growth, especially in the sub-Sahara region. Despite their rapid ascent, they will still have relatively small  market sizes and low-income consumers by 2040 - two factors that are hindering sub-Saharan African cities from appearing higher in the city of the future rankings.

Cities of the future are mostly megacities and large cities

Seven of the 10 identified cities of the future will be megacities (cities housing 10 or more million people) by 2040, while the remaining three are large cities (five or more million). Megacities and large cities concentrate substantial economic and commercial weight, making them attractive to consumer-driven businesses.

Knowing the cities of the future can improve strategic decision making

By assessing the cities of the future based on consumer wealth, growth prospects, levels of digitalisation and market size, investors can gain a better view of the scope and dynamics of success their business can expect. It is important for investors to identify the underlying characteristics of cities and invest in their strengths.

Developing digital channels in cities of the future will be crucial to success

Urban consumers in cities of the future will see a marked rise in the number of internet users. This is expected to deliver opportunities in retail, banking and mobility as more people take advantage of new business models and services.

Scope
Key findings (1)

introduction

Key findings (2)
Why cities of the future?
Cities of the future: drivers
Snapshot of emerging and developing cities in 2040
Consumer expenditure growth to de dominated by emerging and developing cities
Southeast Asian and sub-Saharan African cities to deliver high spending growth
China and other Asian cities to lead consumer expenditure charge to 2040
Most affluent emerging and developing cities will be in China
Economic growth in emerging markets will open opportunities in lower tier cities
Chinese cities best placed for growing luxury and high-end business expansion
Gucci is targeting smaller cities in China
Starbucks eyeing smaller cities in India
Urban population growth will be highest in sub-Saharan African countries
Asia Pacific will cement its position as being home to the world’s largest cities in 2040
Population ageing to challenge in Chinese and Eastern European cities
Australia’s Lendlease invests in a luxury retirement home in Shanghai
Emerging market cities to add to the fast-growing digital consumer base
South Asian cities to deliver the largest rise in internet users
Flipkart e-commerce services available in over 50 cities across India
Bolt is expanding its mobility services in sub-Saharan African cities
Identifying cities of the future: wealth, market size, population and growth prospects are key
Dhaka: among the fastest growing cities on earth
Manila: the world’s third largest city by 2040
Bangalore: home to India’s richest consumers
Kuala Lumpur: one of the most affluent emerging market cities in southeast Asia
Delhi: second largest Indian consumer market
Shenzhen: tech giant of the world
Mumbai: largest Indian consumer market
Hefei: one of the leading cities for the growth of wealthy households in China
Xiamen: one of China’s rising tier 2 cities
Ho Chi Minh City: Vietnam’s first smart city by 2025
Play to the strengths of city characteristics
Use first-mover advantage to deepen market share
Focus on developing digital channels in cities of the future
Use major cities in developing and emerging markets for flagship stores
Do not ignore opportunities in lower-tier cities
Personalisation is vital to success
Be prepared for change!
Cities of the future: SWOT
Key takeaways: cities of the future - an Asian affair
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