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Consumer spending, long a driver of the global economy, is undergoing sweeping change. Whether it’s housing for millennials or health care for baby boomers, a significant shift in the way people spend money is underway in both advanced economies and the developing world.
In China, Spending Is a Family Affair
Never underestimate the power of the Chinese consumer. Despite a relatively sluggish economy, the Chinese are expected to spend $3.6 trillion this year. They’re not just filling the basket with consumer staples — for some, shopping is about the experience. Going to the movies and taking family trips abroad have become part of the Chinese life.
Chinese Consumers Are Expected to Spend $3.6 Trillion This Year
Sources: (China) State Administration of Radio, Film and Television, Statista Inc. and Xinhua News Agency (box office revenue); Box Office Mojo at www.boxofficemojo.com (top 10 movies); and Statista Inc. and United Nations World Tourism Organization (international tourism expenditure). The figures for box office revenue were converted from Chinese yuan into U.S. dollars using one exchange rate as of December 31, 2015; these figures, therefore, are estimates. The top 10 highest grossing movies for 2015 are based on box office results updated in August 2016. The figure for international tourism expenditure for 2015 is a forecast.
India Emerges as a Massive Market
India has become one of the most important components of the global economy. As an economic powerhouse, India may just be getting started though. The country still lags much of the world in households that own durable goods, but modernization is progressing at a relatively rapid rate in terms of personal consumption and modernizing infrastructure.
The Country May Still Be on the Ground Level as a Consumer Society
Source: Euromonitor International. Data are based on possession rate, which is a measure of how many of the population units used (e.g., households) own at least one unit of a certain product, as defined by Euromonitor.
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Millennials: Aren’t They About Ready to Start Buying … Everything?
Battered by the Great Recession, the biggest generation in U.S. history has put off getting married, having kids and buying a car, much less a house. But those days may be coming to an end. What’s more, millennials are embracing a collaborative and disruptive approach to consumption.
Millennials Are Beginning to Flex Their Financial Muscles
Sources: Statista Inc. (annual expenditure of U.S. millennials) and The Sharing Economy, Credit Suisse, September 18, 2015 (percent of collaborative consumers). The figure for annual expenditure of U.S. millennials for 2013 is an estimate, and for 2020, it is a forecast. The percent of collaborative consumers by generational cohort is based on a 2014 survey conducted by The Nielsen Company and Credit Suisse research.
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Get the Whole Story
Learn more about the changing face of the global consumer and what it could mean for investors in this edition of The Long View.