THE study of consumer spending by Boston Consulting Group
(BCG), based on a survey of 24,000 consumers as well as interviews with business
leaders, reveals that China and India are expected to triple by 2020 to a
combined USD 10 trillion a year, potentially helping to boost economic growth
and corporate profits in the developed world.
The
business strategy consultancy forecasts that consumers in China and India will
spend a combined total of $64 trillion on goods and services in the decade
leading up to 2020. India and China were experiencing the inevitable volatility
in emerging economies.
According to "The $10 Trillion Prize” annual spending on consumer goods
will be three times the level spent in 2010 captivating the Newly Affluent in
China and India.
Some
of the enthusiasm for India, China and other emerging markets has dimmed in
recent months due to slowing economic growth, weak progress with structural
reforms and political risks. Emerging equities have also not performed as well
in recent years as their developed peers.
The
middle class in the two countries is expected to reach 1 billion by 2020, BCG
said, noting that in India, the proportion of middle-class people is expected to
grow to 45 per cent in 2020 from 28 per cent in 2010.
BCG
said Western companies need to win over the growing middle class of the two
countries via long-term strategies adapted to the future spending habits of
these new consumers.
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