By: Euromonitor International
The below is excerpted from an extensive report by Euromonitor International on how stay ahead of changing consumer preferences, and what companies need to know to embrace megatrends.
A huge shift to emerging markets has been taking place since 2008 when emerging markets contributed to world GDP more than developed countries for the first time.
Developed economies are expected to grow by 20% in real terms in the 13 years between 2018 and 2030, with headwinds contributing to growth being 50% than in the 13 years before the 2008 financial crisis.
At the same time emerging and developing countries are forecast to dominate economic growth in the remainder of the 21st century, according to Euromonitor.
“By 2030, the Chinese economy will be 1.8 times larger than that of the USA in GDP ppp (purchase power parity) terms and India will constitute around 85.0% of the size of the US or EU economies. By 2030, economies such as Ethiopia, Rwanda and Mozambique are anticipated to more than triple in size in GDP at PPP terms.
Below are 3 socioeconomic drivers which form an ever-shifting backdrop to consumer behaviour.
3 Key Megatrends Drivers
Technology plays a crucial role in consumer decisions and lowered the barriers of entry for fast-moving companies, and inspired new digital-first business models.
“Internet connectivity underpins many of today’s tech advances. Connectivity is the new normal. The number of internet users has more than doubled over the last decade, giving way to a truly mass participation technology,” says Euromonitor.
“As of 2018, almost half of the global population uses the internet, and three quarters will have access by 2030. 53% of connected consumers report they would be lost without the internet.”
The internet has been one of the most transformative technologies of the modern era and now underpins other technological advancements such as artificial intelligence, augmented reality / virtual reality and the Internet of Things.
“31% of connected consumers prefer online communication rather than other means,” says the report.
Population trends, such as urbanisation, migration and ageing, are combining to reshape consumer lifestyles and purchasing decisions.
“There will be 38 megacities, cities with populations over 10 million in 2030, and net migration will account for more than half of population growth to 2030 in Western Europe, Australasia and North America,” says Euromonitor.
“In 2030, 61% of the world’s population will live in urban areas, 995 million will be aged 65. Rapid urbanisation and population growth in Asia and Africa will give rise to more connected consumers on the back of an expanding youth population and better connectivity.”
There has been a huge transformation in what is important to consumers. The rapid increase in connections has ushered in speed, convenience and instant access across life.
“Conscious consumption has replaced conspicuous consumption and is at the heart of changing values and priorities,” says the report.
“Gone are the days of ownership as a status symbol. Developed economies will add $3,839 billion to their spending on services between 2018 and 2030; in comparison the figure for durable goods will be $503 million. Consumers tend no longer to have deep relationships with the things they own, but instead find emotional attachment in experiences and achievements.”
Euromonitor says 80% of Generation Z in 2017 preferred following their passion over financial security as their leading life priority.