What Do Chuan Shen, Rajesh Reddy, Jeni Tagao and Amira Hasan Have In Common?
Is it possible that Chuan Shen, Rajesh Reddy, Jeni Tagao and Amira Hasan share the same gene pool, even though separated by thousands of miles? Evidently, since they demonstrate a startlingly consistent behaviour while preparing for the Easter weekend. While Chuan is comparing a Bose Lifestyle with a Harman Synthesis at the Coco Park Longgang in Shenzhen, Rajesh tucks into a KFC at the GVK Mall in Hyderabad. While Jeni tries on her next pair of Hush Puppies at the Shangri-La Plaza in Manila, Amira is paying for her brand-new National Geographic Tee at the Lot10 in Kuala Lumpur. Separated by oceans, but following a common agenda. Who can say they are not of the same ilk.
Chuan, Rajesh, Jeni and Amira all belong to the same ‘gene pool’ of purely first generation urbanistas who have moved away from smaller catchments in search of careers and livelihood. Ascending to the middle-income pool, they are now armed with greater disposable incomes and aspire for even more.
In my opinion, it is these movers and aspirers who will now drive the future of retail globally. As population growth and urbanisation and multi-speed economic growth soar in the emerging markets of APAC, we will see mall owners and retailers trying hard to decode their DNA – and, in the process, ensure their cash registers keep ringing.
Asia and Africa will see the biggest rise in urbanisation and growth in urban populations in the coming decades. Within Asia, it is estimated that China will account for 20% (that’s 276 million people) and India for 16% (or 218 million people) of the increase in the global urban population between 2011 and 2030. A prominent feature of urbanisation will be rapid growth of small and mid-sized cities alongside on-going development of urban clusters. The number of ‘megacities’ – those with more than 10 million inhabitants – in the world will rise to 37 from 23 in the same period. Nineteen of these will be in emerging markets, with 13 in China and India combined.
In APAC, the rapid growth of the past decades is written into the landscape. Economic growth has transformed cities, raised income levels, spurred urbanisation and driven technology, changing the way we live and work. More wealth will be generated as a result of demographic changes, urban and infrastructure growth and the continued rise of the middle class. This will inevitably lead to the expansion of Asian consumerism in the foreseeable future
China is at the forefront of this change, as its phase of the demographic dividend began much earlier than other countries such as India and Indonesia. For instance, only 36% of China’s population lived in urban areas at the start of 2000 – this leaped to more than 50% by 2013. This massive transformation in China is gradually being replicated in other nations such as India, Indonesia, Philippines, etc.
Today, APAC is a potpourri of advanced nations such as Australia, Singapore and Japan on one extreme, followed by Hong Kong, Korea and the likes in the middle-income category, and the rapidly emerging economies of India and China on the other. Each of these nations offers retailers a totally different set of markets – luxury, value, and/or affordable items.
Even within emerging APAC nations such as China, India, Indonesia and the likes, cities offer a completely different set of population and economic characteristics that render each consumer market unique from rest of the rest. As nations become younger and their incomes improve, retailing in APAC will surely see interesting times in the future. From mobile phones to automobiles, all are on the aspiration list of young and resurgent Asians who are intent on fulfilling their aspirations.
About the Author
Anuj Puri is the Chairman & Country Head, JLL India