Few forces in the global economy pack a bigger punch than the growing middle class, and now it’s growing faster than ever. The transformation of living standards around the world is helping hundreds of millions of new consumers join the urban middle class, unleashing an economic force that is reshaping the planet.
Global middle class consumption study
Expanding middle class is rapidly changing global consumer spending
Visa economists Wayne Best and Richard Lung discuss the findings of the new study.
Over the next decade, more than half of the growth in global consumption is expected to come from the middle class—most of which will be new entrants to the middle class. Hundreds of millions more consumers will have purchasing power that extends beyond their basic needs. As their incomes grow, family budgets will also shift as they add new amenities to their middle class lifestyle (such as apparel and restaurant spending), or aspire to purchase global brands for the first time.
Visa’s new study looks at these and other trends in global consumption, including a comparison of globalization level for cities and countries around the world. One key metric of globalization is the size of a city’s middle class, because a vibrant middle class and urban affluence create larger and stronger markets. As less globalized cities close their “globalization gap” with highly globalized cities, new international business opportunities are likely to emerge.
The study explores the tremendous changes that are occurring in the geography of urban consumption, including the convergence of technology and living standards that have brought consumers from around the world closer together. Using “big data,” the study identifies how urban centers and the consumers that live in them could be impacted by ongoing demographic and technology trends. Understanding these trends, will enable companies to better plan and forecast for business growth.
Did You Know?
- The rapidly expanding middle class will account for 60% of the $15 trillion* in additional consumer spending expected between now and 2030.
- Projected growth in aggregate consumer spending will add the equivalent of a second United States to the world economy by 2030.*
- Cities like Shanghai and St. Petersburg have become as important to the global economy as Berlin, Montreal, Tokyo or Austin.
* Based on 22 countries and 103 cities included in the study.
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