InterAksyon.com means BUSINESS
MANILA - The Philippines will remain in the "basic consumer" income group until 2020, making it a less-priority market for global companies, according to a consulting firm.
In its report “Consumer Wealth and Spending: The $12 Trillion Opportunity,” A.T. Kearney listed the Philippines along with Algeria, Azerbaijan, Belarus, Egypt, India, Jordan, Montenegro, Morocco, Nigeria, Pakistan, and Tunisia under the basic consumer income group.
This income group has a per capita average spending of approximately $4,000 spent primarily on food and personal care.
Within the basic consumer group, there are three distinct spending patterns: low-income and hardworking, getting by on state services, and subsistence shoppers.
The Philippines and India were categorized under the “low-income and Hardworking” group, "but only the Philippines is expected to remain in this category by 2020."
India and Azerbaijan will move up to the "emerging consumer" group by 2017 and Montenegro will enter the "escalating consumer."
Consumers under the low-income and hardworking category spend most of their money on food, not only because they have little money to spend but also because food prices are higher in countries where population growth causes food shortages.
"Because few of these people can afford cars, they spend more on rail travel—mainly to get to work—than any other consumer group. Generally, low-income consumers spend very little on recreational and leisure items or activities," A.T. Kearney said.
The consulting firm said about 1.8 billion people fall into the basic consumer income group, which over the next decade will account for only two percent of the growth in consumer spending—primarily because fewer people will be in this group.
By 2020, as more countries move into the next income group, there will be 700 million basic consumers who combine to spend less than $1 trillion.
"While this is a socially important group to focus on, these consumers will continue to be difficult for CPG companies to address," A.T. Kearney said, referring to the consumer packaged goods business.
Countries under the emerging consumer income group include Bahrain, Bolivia, Brazil, Chile, China, Colombia, Ecuador, Israel, Kazakhstan, Kuwait, Peru, Qatar, Saudi Arabia, South Africa, South Korea, Taiwan, Ukraine, United Arab Emirates, Venezuela, and Vietnam.
This income group has a per capita average spending of $8,000 and spends more on clothing, footwear, personal-care products, communications services, and education. By 2020, there will be 3.4 billion emerging consumers spending roughly $10 trillion.
"As we look at the next decade, this group will account for 45 percent of new spending, making it a priority for global companies," A.T. Kearney said.
Countries in the escalating consumer income group are Argentina, Bosnia-Herzegovina, Bulgaria, Croatia, Estonia, Guatemala, Hungary, Iran, Latvia, Lithuania, Macedonia, Mexico, Poland, Romania, Russia, Serbia, Slovakia, Turkey, Turkmenistan, and Uruguay.
"Spending patterns are stable in these markets. Consumers focus less on the basics, with fairly balanced spending on personal care, entertainment, and leisure items. There is typically a spike in telecom spending, while healthcare spending is low because many countries in this group have nationalized services," A.T. Kearney said.
The study said about 600 million people fall into the escalating consumer income group and they spend about $2.5 trillion a year. In 2020, the population will remain roughly the same, but spending will increase by $1.1 trillion to $3.6 trillion, or roughly 10 percent of spending growth worldwide.
The nations in the “established consumer" group are Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Indonesia, Ireland, Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand, the United Kingdom, and the United States.
Established consumer markets comprise 1.2 billion people who spend about $20 trillion per year. By 2020, they will number 1.3 billion and spend about $25 trillion a year. These consumers make up about 45 percent of the next decade's $12 trillion in spending growth.
The A.T. Kearney Consumer Wealth and Spending Study examines worldwide spending patterns. The study spans 30 years, from 1990 to 2020, a period chosen because of the availability of detailed consumption data. The study used more than 3,000 variables to account for past and projected spending patterns in 86 countries and more than 70 product categories.
InterAksyon.com means BUSINESS
BUSINESS NEWS
