Asia will account for half of the world's consumption growth in the next decade – and what’s more, it's experiencing powerful changes in both demographics and consumer behavior. This highlights the need to re-examine how we look at Asian consumers of the future.
In our latest Future of Asia research preview, ‘The trailblazing consumers in Asia propelling growth’, we discuss how these shifts are expected to impact Asian consumption patterns. The first shift we see is smaller average household sizes. By 2030, a third of households in Advanced Asia will be single households, and households in Frontier Asia are expected to have one person less. This opens a larger opportunity to cater for what we might call a ‘lonely economy’.
The second shift we see is that seniors will drive two thirds of growth in Advanced Asia, and will be fully online. With almost 100 percent of Japanese and South Korean seniors online by 2030—coupled with the changes in consumption categories and channel usage this age group brings—seniors will have a huge impact on how the economy works in the region.
The third shift is a new generation of digital natives becoming the forefront of consumption. Asia’s Generation Z and millennials have high search literacy, are smart shoppers heavily influenced by their peers, and are also in search of new brands and experiences. They bring a discontinuity to Asia’s consumption patterns, and therefore a whole range of opportunities. However, we do see risks, as this generation is getting into debt much quicker than before. For example, in China, one out of two people that are indebted are 30 years of age and below.
The fourth shift we see is that advancing women's economic empowerment can potentially add $2.2 trillion in consumption growth if played out fully. This impact will flow through to entertainment, spending on experiences, caring more for family, health and wellness for themselves and their own family, as well as spending on beauty and apparel. But one thing to note is that this opportunity is not yet guaranteed. There will be many obstacles to fully realize women economic empowerment in Asia, and there's likely a need for active intervention by both government and businesses to fully unleash this potential.
These shifts—combined with the technological leapfrogging we have seen in Asia to date, and which we foresee will continue—are creating discontinuities in consumer behavior, and the impact could be very large if we can unleash its full potential.