Middle class growth in emerging markets
China and India: tomorrow’s middle classes
Large populations and rapid economic growth mean China and India will become the powerhouses of middle class consumerism over the next two decades.
Emerging markets growth will also dramatically redistribute the bourgeois around the world. For instance, as our Rapid-Growth Markets Forecast explores, the number of households in Mexico with annual disposable incomes over US$50,000 is expected to reach 7.1 million by 2020, and 9.4 million in Brazil. For both countries this is an increase of over 50%.
Nevertheless, China’s and India’s contributions will be substantial.
Today, China has around 150 million people earning between US$10 and US$100 per day. As long as China continues to grow, and necessary economic reforms are made, we expect as many as 500 million Chinese could enter the global middle class over the next decade.
By 2030 around one billion people in China could be middle class — as much as 70% of its projected population.
China: total income by band 2010 and 2020
(annual income, thousands of people)
Source: Oxford Economics
India’s global middle class, meanwhile, at around 50 million people, or 5% of the population, is much smaller. We expect this to grow steadily over the next decade, reaching 200 million by 2020.
After this, we expect growth to really accelerate, reaching 475 million by 2030 and adding more people than the Chinese to the global middle class worldwide after 2027.
China’s middle class will grow quickly earlier because it has more people on the verge of earning over US$10 per day. Currently, around 25% of China’s population earns US$5-US$10 per day and 40% earn US$2-US$5.