Global affluence to rise

20 October 2011

ZURICH: Global affluence levels are likely to rise over the next five years, offering particular opportunities for brands active in fast-growth markets like China and India.

In a new report, Credit Suisse, the financial services giant, revealed that total global wealth rose from $195tr in 2010 to $231tr in 2010, and predicted figures on this measure would hit $345tr by 2016.

At present, 0.5% of adults, or 29.7m people, are high net-worth individuals with assets of at least $1m. Some 90% of this group are valued between $1m and $5m, versus 0.1% boasting over $100m. As a whole, this cohort own a third of global wealth.

In contrast, 3.1bn individuals, or two-thirds of the adult population, can lay claim to assets of below $10,000, and 24% sit in the $10,000–$100,000 bracket on this measure. These "middle and base" consumers are worth $41tr in all.

By region, Europe takes 34% of global wealth, with North America on 28% and Asia Pacific, excluding China and India, on 22%. China posted 9% here, Latin America hit 4%, India was on 2%, and Africa just 1%.

Switzerland was the wealthiest nation in per capita terms, on $500,000, with Australia and Norway both on $300,000. In China and India, figures stood at $21,000 and $5,500 respectively, but have more than doubled in the last decade.

Some 34% of dollar millionaires live in the US at present, with Japan on 11%, France on 9%, the UK and Germany both logging 6%, Italy delivering 5%, and Australia and China registering 4% apiece.

By 2016, US household wealth will come in at $82tr, while China, should claim second place on $39tr after overtaking Japan, which is anticipated to post $31tr in five years time.

Moreover, the number of millionaires in China is expected to increase from 1m in 2011 to 2.4m in 2016, totals standing at 319m and 815m in turn for Brazil, and 204m and 510m concerning India.

Moreover, China now contributes almost a third of the global middle class, worth $34tr worldwide. Per capita wealth in the country, however, stands at $10,470, although the average personal debt is just $630, a low amount by international standards.

Latin America will remain some way further back on $17.7tr in 2016, when Africa will post $8.9tr. While this marks a lift from $3tr today, it only equates to US wealth in 1908, even though Africa has 300m more adult than contemporary America.

But Credit Suisse also pointed to the fact that the lower cost of living in many emerging markets must be taken into account. Assets of $10,000 in India, for example, are broadly equivalent to a total of $30,000 in the US.

Data sourced from Credit Suisse; additional content by Warc staff