Consumer spending in China and India is set to triple by 2020 to the equivalent of nearly $10 trillion (approximately £6.2 trillion) a year, bringing with it an invaluable boost to their respective economies.
According to the Boston Consultancy Group (BCG), a global management consulting firm and a leading advisor on business strategy, this significant increase in the spending power of people will radically speed up modernisation in both countries.
In a survey conducted by BCG, it was found that Chinese consumers are looking to increase their spending on goods and services by 40 per cent over the next 12 months.
Michael J. Silverstein, a senior partner based in BCG’s Chicago office and a co-author of a new book entitled The $10 Trillion Prize: Captivating the Newly Affluent in China and India, said that Chinese consumers in particular would help drive productivity.
“Chinese consumers are a beacon of hope,” he went on to say. “They believe they will earn more, they will spend more, and their children will have a better life. They don’t see a global conflict on the horizon.”
He added that the world is on the precipice of a new era, a so-called “turning point in history”, where wealth will shift from the west to emerging economies, in particular China and India.
In stark contrast, the study found that consumers in the UK and US were unsure about their own prospects in the foreseeable future. As such, only one in ten consumers (approximately nine per cent) in both countries said they planned on spending more over the next 12 months.
“US and UK consumers, on the other hand, remain guarded, stressed, and anxious,” commented Mr Silverstein. “They are suffering the consequences of four years of recession and continued talk of a double dip. They read the gloomy headlines from around the world and are filled with fear.”
Cadogan Tate specialises in international shipping, helping professionals transfer their possessions when moving overseas.