According to the consulting firm McKinsey & Company, 128 million African households will earn $5,000 US a year by 2020. This might not sound like much to us, but to them, this is a nice increase in emerging market income.
This increased emerging markety income should enabling them to spend half their income on non-food items. They also claim that the number of Africa’s middle class families, earning over $20,000 a year, currently outnumbers India’s middle class.
The economic growth, population explosion and increasing incomes in emerging markets have been fuelling consumer spending. However, non-BRIC, emerging market countries, do have lower average incomes. So currently, they are much more cost sensitive. Because of this CPG companies hoping to get into these markets have to rethink their products, their delivery methods, cost structures, and much more.
In addition the Euromonitor predicts that the middle class income group in the Association of Southeast Asian Nations will exceed 100 million people by 2020. The ten ASEAN states have a combined population of over 600 million people. What that means is that one out of every six people in ASEAN countries will be considered middle class by 2020. Watch our next video for information on Emerging Market spending.
My next blog on emerging markets will discuss emerging market volatility.
You are also welcome to download our whitepaper. We also invite you to be Relational Solutions guests at the CGT Consumer Goods Emerging Markets Forum #cgem14! on September 17-19th at the Ritz Carlton in Fort Lauderdale. Click the banner above for more information and enter promo code EMRSVIP.