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Asia’s consumption patterns driven by sustainability and diversity: McKinsey
ASIAN consumers are set to account for half the world’s growth in consumption, amounting to some US$10 trillion by 2030, according to a research study from McKinsey Global Institute.
But businesses hoping to tap this golden opportunity will face challenges of shifting preferences, demographics and diversity, the report warned.
Gaping differences within consumer demographics, due to the deep inequalities plaguing the region, will force businesses to re-evaluate their strategies.
For example, while there are 70 million seniors mostly in advanced Asia with relatively high incomes, there are twice more (165 million) seniors mostly in frontier and emerging Asia who may live on less than US$11 a day.
Different levels of comfort regarding online consumption will also force businesses to stratify their online and physical presence accordingly.
Digital natives – those born between 1980 and 2012 – will account for over a third of Asia’s consumption. While 70 per cent of them are very confident of meeting their financial goals, they are also more likely to take out consumer loans to finance new experiences.
While this signals more enthusiastic consumption, questions of rising income and available credit will determine if this trend will continue.
The report also noted that because of the region’s susceptibility to climate disruptions, sustainability and the environment will be top concerns for consumers. They will be more inclined to consume responsibly and sustainably, even if this means paying a slight premium.
As Asian consumers continue shifting their behaviour, preferences and consumption, companies serving these markets will have to adapt. This will determine which companies will be the “rising stars of the next decade”, according to the paper.
Source: https://www.businesstimes.com.sg/global-enterprise/asias-consumption-patterns-driven-by-sustainability-and-diversity-mckinsey