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The Next Billion Consumers

July 2021

The next billion consumers represent new growth opportunities worth trillions of dollars in consumer spending across the globe. However, the next billion consumers are not a monolithic cohort, as they vary hugely from market to market. In order to capture and capitalise on these new opportunities, companies need to understand who the next billion consumers are, where they come from, what drives their spending, and what are their needs, preferences and behaviours.

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Key Findings

It is not all about the bottom of the pyramid (BOP)

Uncovering and targeting the next billion consumers is more about discovering the forgotten consumer and unleashing their spending, than reaching low-income consumers at the bottom of the pyramid. The next billion consumers are diverse; they include new, emerging middle classes, BOP consumers, rural communities, and older consumers across both developed and developing countries.

Drivers of new spending

Reduced poverty, rapid urbanisation, and technology are among the key drivers of new spending. They integrate the overlooked and forgotten consumer into the market by alleviating, if not removing, the access and economic constraints these consumers face.

The overlooked market varies from country to country

The next billion consumers are diverse; they range from low-income consumers at the bottom of the pyramid in Africa, rural consumers in Asia (where the focus has been mainly on the expanding middle class), through to the emerging middle class in Latin America and older consumers in many developed markets who embraced online activities during the COVID-19 pandemic and who are likely to retain their newly-formed online habits going forward.

Major challenges but opportunities are substantial

Because they come from diverse geographies, demographic and economic groups, as well as having a billion needs, the next billion consumers require companies to adopt granular marketing and pricing strategies. In return, they present substantial opportunities - across the four key markets examined in this report, consumer expenditure by the overlooked consumer groups is expected to amount to USD10.6 trillion in 2030.

Health is a top spending priority

Health has emerged as a top spending priority that the next billion consumers have in common. Brands and businesses, regardless of their categories or sectors, can add value by focusing on health and wellness in order to increase their appeal.

Introduction

Scope
Key findings
Overlooked and forgotten
Drivers of new spending: reduced poverty
Drivers of new spending: urbanisation in the developing world
Drivers of new spending: accelerating digital adoption

Global Market Overview

The underserved market varies from country to country
Overlooked consumers by region at a glance
Growth potential of the next billion consumers at a glance
Sectors with greatest commercial opportunities

Brazil’s Emerging Middle Class

Brazil’s previously poor is a substantial market with strong growth
Transport and health are biggest discretionary spending categories
Brazil’s emerging middle class are optimistic but cautious
Purchasing decisions driven by value for money
Healthy food start-up LivUp , changing how people buy fresh food

India’s Rural Consumers

India: the world’s largest rural population
India’s rural consumers engaging online and becoming more aware
Driving a rise in aspirational spending aligned to urban lifestyles
Vakrangee initiating the evolution of digital commerce in rural India

Nigeria’s Bottom of the Pyramid

Low-income segment is largest and fastest growing in Nigeria
Food absorbs the largest share of low-income households’ budget
Nigeria's BOP consumers have low incomes but big tastes
Engaging with brands for more affordable solutions
Pricepally  reducing the cost of food in Nigeria through communities

US Silver Spenders

Older consumers in the US increasingly shift to e-commerce
Health is the top spending priority for older consumers in the US
Elderly US consumers embracing e-commerce post pandemic
Business must adapt to diverse needs and priorities of the ageing
Instacart offers additional support on platform to seniors

Conclusion

“The next billion consumers” is an effective growth strategy
Challenges and opportunities
Next billion consumers: what to focus on
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