It expects India to be the fastest growing economy in the world in 2018 and “for the forecastable future” in a “changing of the guard” as the country begins to outpace China as Asia’s source of momentum, according to Alexander van Kemenade, Director of Consulting, Asia, at the Economist Intelligence Unit.
For more on the rise of India and other economic trends, read WARC’s report: Five consumer & economic trends shaping Asia in 2018.
While China’s slowdown will continue to influence the economic landscape for other Asian markets – many marketers have seen budgets cut – bright spots are emerging, particular as India’s “mainstream” consumer demographic continues to grow at pace.
“If you look at the past decade, about 71% of the new entrants into the mainstream consuming class in Asia came out of China. The next decade it’s going to be much, much lower, it’s going to be around 40% and that goes with this changing of the guard,” said van Kemenade at the Retail Congress APAC event in Hong Kong.
“India is actually going to be adding more mainstream consumers to the overall Asian consumer landscape than China in the next ten years,” he added.
“In terms of speed and development of the economy, we’re fairly confident that we’re going to see a very confident India start to outpace China.”
But the news isn’t all bad in China because offline retail is expected to continue to thrive in China, especially in lower tier cities.
“Offline still has a very promising future in China… We will very much encourage retail clients to go into third tier cities. If you look at the overall retail space per capita in China, compare that with any other country in the West, you’ve got about 12 square metres per thousand people in China,” van Kemenade said.
“In London, it’s about 60 square metres. So there’s definitely ground for expansion in bricks and mortar retail in lower tier cities in China.”
Sourced from WARC