Affluent consumers

Global economy watch - January 2013 PDF download

Global economy watch - January 2013 PDF download

Watch out for young, independent and affluent consumers in the rising new cities of the world

2007 marked the first year where the world’s urban population exceeded the rural one. While urbanisation trends have slowed down in the West, Figure 3 shows that urbanisation will remain a fast-moving and transformational force in emerging markets. The UN estimates that, in the five years to 2015, around 370 million people will move into cities; nine out of the ten main countries undergoing this change will be in emerging markets and Asia alone will make up two thirds of this growth in urban populations.  

Businesses will be drawn to these areas because of the scale of urbanisation taking place and the type of citizens being attracted to cities. For example, in 2013, China alone is expected to add 20 million urban citizens, which is equivalent to twice the size of Paris. This growth will help to sustain demand for construction services, utilities and other related industries in 2013 as well as continuing to put immense pressure on the prices of natural resources. 

At the same time, the new urban citizens of the emerging cities will tend to be younger, with lower dependency ratios and a lower debt burden than their counterparts in advanced economies. Businesses will have to recognise that the new generation of consumers driving world growth will most likely be young, located in an Asian city, and relatively poorer than their Western counterparts.

Figure 3 – The top 10 urban growth areas of the world are emerging cities