Annual consumer spending worldwide is expected to increase $12 trillion (43%) to $40 trillion by 2020, according to A. T. Kearney. Consumers worldwide spent $28 trillion in 2010. U.S. consumers are expected to account for a quarter (25%) of the growth in spending worldwide through 2020.
Together, durable goods, transportation, and healthcare account for nearly half (49%) of the projected increase in consumer spending [calculations by Research Alert].
Consumer spending on specific categories can be affected by factors such as marriage and divorce rates, education, and lifestyle, as well as by economic stability and employment rates.
For example, consumers living in countries with high rates of marriage spend more on wine and beer than those living in countries with high divorce rates. Women living in countries where employers offer comparatively long maternity leaves spend more on personal care products than those living in places with shorter leaves.
The study identifies four consumer profiles according to spending habits and priorities.
Basic Consumers
Average per capita spending: $4,000
Population in 2010: 1.8 billion
Annual spending: $1.4 trillion
Spend primarily on food, clothing, and personal care products. Because they work far from home, spend disproportionately on travel, lodging, and postal services. Spending is low on alcohol (in some cases because of religious prohibitions) but disproportionately high on tobacco (the highest of any group).
Emerging Consumers
Average per capita spending: $8,000
Population in 2010: 2 billion
Annual spending: $4.6 trillion
Makes up 35% of the global population, and is expected to account for 45% of new spending in the next decade. Spending is focused on food and clothing, with discretionary spending on travel, restaurants (particularly among those who commute to work), education, telecommunications, jewelry, and audio equipment.
Escalating Consumers
Average per capita spending: $16,000
Population in 2010: 0.6 billion
Annual spending: $2.5 trillion
Population is expected to remain stable during the next decade, but spending will increase by $1.1 trillion to account for 10% of spending growth globally. Spending is balanced among personal care, entertainment, and leisure items. They tend to spend disproportionately on telecommunications, and a “new rich” subsegment also spends on cars, stereos, jewelry, personal care, and vacation packages.
Established Consumers
Average per capita spending: $32,000
Population in 2010: 1.2 billion
Annual spending: $20 trillion
Spending patterns depend on the availability of nationalized healthcare and how recently they’ve acquired their wealth. Residents of countries with rapidly growing economies spend on vacations, jewelry, restaurants, and media. Those in mature economies spend on cultural activities, financial services, cars, and clothing. U.S. consumers spend disproportionately on healthcare and financial services.
Source: “Consumer Wealth and Spending: The $12 Trillion Opportunity,” A.T. Kearney, Global Consumer Institute, Vishwa Chandra, Principal, 222 W. Adams St., Chicago, IL 60606; 312-648-0111; vishwa.chandra@atkearney.com; www.atkearney.com. Price: Available online at no charge.
© Copyright 2012, EPM Communications, Inc. May not be reproduced without written consent of publisher.