Given the vast potential in terms of population and economic growth, Asia is set to become the backbone of the world’s consumer markets. Over half of global consumer expenditure will originate in the region. As a result, Asia Pacific will attract growing attention from global companies, many of which already make most of their revenue in the region. However, it is a market full of challenges – the competition from local players is intensifying and consumer types are becoming increasingly varied.
Asia Pacific already accounts for over half of the global population, but less than a third of consumer expenditure. Given the vast potential in terms of income growth, urbanisation and the relatively mild 2020 recessionary effect on Asia Pacific, the region is set to become the backbone of future consumer markets, contributing USD16 trillion or over half of global growth in consumer expenditure over 2020-2040.
China is undoubtedly the largest consumer market in Asia Pacific and is set to see low but solid future growth. However the fastest growth will be elsewhere in the region. India, Bangladesh, Indonesia, the Philippines and Vietnam will be front-of-mind for companies willing to tap into the fastest growing global consumer markets in the coming years.
Asia Pacific will remain the key driver for the majority of consumer industries over 2020-2025. Packaged food and apparel and footwear will see the highest absolute growth in the Asia Pacific market – over USD100 billion. In addition, beauty and personal care and personal accessories will see over 50% of global absolute value growth coming from the region. In terms of categories, dairy, skin care and sportswear will be the most promising for future growth and investment in Asia Pacific.
Because they come from diverse cultures and demographic and economic groups, Asian consumer types vary widely across countries. Asia Pacific has a substantial pool of affluent, status-oriented consumers, minimalist consumers and impulsive consumers, as well as traditionally oriented homebodies. The best strategy for businesses to tap into this growing consumer diversity is to understand consumer types across countries and adjust their strategies not only by country but (more importantly) by target consumer groups.
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