TOKYO – A third wave is apparently forming among middle-class consumers in India and Southeast Asia when it comes to medical treatment, health foods and other areas related to physical well-being.
This wave follows the first, a rise in spending on everyday goods, and the second, increased demand for durable goods.
Some 210 million Indians, or 17% of the population, had middle-class daily disposable incomes of between $16 and $100 in 2012, data from research firm Nielsen shows. That climbs to 28% in Southeast Asia, or about 190 million people. The numbers are expected to grow to 39%, or 540 million people, in India by 2020, with the corresponding share for Southeast Asia to shoot up to 55%, or 400 million people.
The average age in India stands at a relatively young 26.6 years. The demographic dividend, which refers to the period when the population within the 15-64 age bracket grows, will likely last until 2045.
Indian consumption patterns are changing as well. Amid the spread of smartphones, the number of internet users topped 400 million people at the end of last year. The focal point of consumer spending is also trending away from local markets and small-scale businesses and toward online retailing.
Trading volume at online retailers is rising by the year. Though the dealers chiefly trade in low-cost everyday goods, durables such as household electronics, vehicles and homes have become more common in recent online transactions.
Rising middle-class incomes and the increasing use of automobiles have bred lifestyle changes such as a lack of physical activity. Demand for medical treatment and health foods is seen gaining in the future.
There are signs that China’s economic slowdown is weighing on Asian economic growth, including in Southeast Asian countries. But India’s consumption has kept the country’s economic growth rate above 7%.