“Urban World: The Global Consumers to Watch”, a report by the McKinsey Global Institute says that global urban consumption is expected to grow by $23 trillion over 15 years, at a compound annual growth rate of 3.6 percent. 32 cities globally, including two from India – Delhi and Mumbai – will likely generate one-quarter of total urban consumption growth between 2015 and 2030, and by 2030, consumers in large cities across the world will account for 81 percent of global consumption, which is “extraordinarily concentrated”, reports India Today.
The report noted the beginning of two significant trends: the heavy spending on healthcare among seniors in developed regions and increasing spending by consumers in emerging economies. “In India, such spending accounted for 35 percent of average household consumption; by 2025, and McKinsey Global Institute expects this share to have increased to 70 percent,” the report said.
“Emerging demographics are the new emerging markets: The question is no longer where to search the globe for growth, but which demographic groups have the most spending power,” it says.
Key Takeaways for India:
- 70% growth to come from population between the ages of 15 and 59
- 79% growth through rise in per capita consumption
- Growth will be concentrated in Ahmedabad, Bangalore, Delhi, Hyderabad and Mumbai
- Urban population growth to be moderate at 2.2%
Older age segments are growing faster – Sixty-plus populations are expanding at four percent compounded annual growth rate, and the under-30 population at 1.5 per cent CAGR.
Businesses will need to factor in shifting urban demographics while evolving their footprint. “Knowing which cities, and even which neighborhoods within cities are home to key consumers will matter,” said the report. It added that companies will have to tailor products and services for an increasingly diverse consumer market, reports Business Standard.