Global spending on goods and services is forecast to grow from $28 trillion real US dollars in 2010 to an estimated $40 trillion in 2020, a $12 trillion rise after accounting for inflation, according to an A.T. Kearney study released in May 2012. This represents a 43% growth estimate, far more aggressive than the 27% growth from 2000 to 2010 and 22% growth from 1990 to 2000. The US is expected to be a prominent driver of the additional spending this decade, accounting for one-quarter of the $12 trillion in new spending, with China (19%) also a significant contributor. New consumer spending will also come from other emerging markets such as India, which will account for 8% of the growth, Brazil (5%), and Russia (3%).
Much of this new spending might take place online, particularly in China. According to an April 2012 report from WorldPay, which looked at how online spending has changed since the start of the global recession, 63% of consumers in China report spending more online, compared to just 5% who say they spend less. This net growth of 58% was far higher than the nearest country, India, with net growth of 30% (45% vs. 15%). By contrast, only 22% of consumers in the US reported spending more online since the start of the global recession, compared to 32% who reported spending less, for a net 10% decline.
Food & Beverage to Get 11% of New Spend
Data from the A.T. Kearney study indicates that durable goods and services and transport will account for the largest portions of the additional $12 trillion in spending, at 18% and 17%, respectively. Health goods and medical services will get 14% of the new spending, while food and non-alcoholic beverages will account for 11%. Other categories that will reap the benefits of this additional consumer spend will be leisure and recreation (8%), communications (7%), clothing and footwear (3%), and alcoholic beverages and tobacco (2%).
Emerging Consumers to Grow Share of Spend
The study breaks consumers into four income groups across the world, tying them to economic development. The “Emerging” group is forecast to grow from 17% share of total spending in 2010 to 26% in 2020. This increase will come partially at the expense of the “Established” group, which will see its share of spend fall from 69% to 63% in that period.
According to the report, 2 billion people, or 35% of the global population, comprise the “Emerging” group, spending $4.6 trillion per year. They hail from countries such as Brazil, China, Colombia, Israel, and South Korea, with India and Azerbaijan expected to join them by 2017. Consumers in this group who hail from the colder countries are predicted to spend a dramatically larger amount on clothing and footwear, while overall, this group will steadily rise its spending on personal-care products, communications services, education, entertainment, and leisure.
The “Established” group is made up of 1.2 billion people who spend about $20 trillion per year, and come from countries such as Australia, Belgium, Canada, France, Indonesia, Italy, Spain, the UK, and the US. These consumers are forecast to spend more on value-added products and services over the next decade.
Despite consumers from these groups coming from different countries, the report finds that consumer behavior is not affected by geographic borders or cultural affiliations.