Global businesses are operating in a world of economic uncertainty and rising inequality impeding the expansion of middle classes. These issues enhance the importance of high net worth and affluent consumer segments to providers of luxury goods and services, as well as to businesses who normally target middle classes. In this context, Euromonitor has developed the Wealth Index to measure the potential of high-value consumption in 84 key countries to help businesses pinpoint opportunities.
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In the context of squeezed middle classes and rising inequalities, it is more important than ever for businesses to capture high-value opportunities. However, the potential for high-value consumption is dependent on many factors. For example, a country with a high number of HNWIs who only travel abroad for luxury spending is not really a country with market potential. This is why Euromonitor developed the Wealth Index which takes into account 21 indicators covering a wide range of factors, from wealth and spending to savings, insurance and pensions.
Despite their small sizes, the ultra HNW, HNW and affluent consumer segments are lucrative and growing. Whilst they are already important target groups for providers of luxury goods and services, businesses who traditionally target middle classes will need to also attract wealthier consumers to boost profitability and grow.
The USA is the most important market for businesses seeking high-value opportunities. The country has the world’s largest wealthy and affluent population, and its richest households account for large shares of spending on categories that matter to businesses seeking high-value opportunities.
China and India are the most exciting markets of the future. By 2030, China will boast the world’s fifth largest HNW and affluent population with 2.8 million adults. India, on the other hand, will maintain its respectable 7th place in terms of average wealth for the wealthy and affluent population.
Kazakhstan is set to drop 11 places to rank 62nd on the Index in 2030, but it will still rank 4th in terms of wealth per HNW and affluent adult. This illustrates that the potential for high-value consumption is dependent on many factors.