Population patterns are changing lifestyles and spending across the region
Herald van der Linde
Head of Equity Strategy, Asia-Pacific
Tectonic shifts are taking place in Asia. Mainland China will soon no longer have the world’s largest population. Asians are getting older, living longer, and flocking to mid-tier cities.
Women are having fewer children and working more; households are getting smaller.
All this impacts consumer spending. Here we highlight 10 key trends in Asian demographics.
- India overtakes China. By 2030, India is expected to become the most populous country, with mainland China’s population starting to shrink. Companies need to consider the implications well before this happens: for instance, can they offset slower volume growth by offering better quality products at higher prices.
- Falling populations. Very low fertility rates may become common but slowing population growth does not necessarily mean a shrinking labour force. While Japan’s populace is falling, its workforce has been growing since 2013.
- Empty-nesters. The combination of an ageing population, children leaving home and more women working is a powerful force in mainland China. These ‘empty-nesters’ are one of the world’s largest demographic shifts: they buy more premium products – better quality at higher prices – on almost everything from food and clothing to home furnishings
- Shrinking households. The proportion of single-person households in Korea is estimated to reach almost 33 per cent by 2030. This changes spending patterns – more discretionary consumption and ready-to-eat meals from convenience stores. Expect similar trends in Taiwan and parts of mainland China.
- More working women. This is especially so in mainland China and Indonesia, where more women are completing higher education and getting managerial jobs. This boosts household income and impacts how families spend their income.
- Mid-tier cities. Employment and spending is growing in mid-tier cities, especially in India and the ASEAN nations of Southeast Asia, creating a new group of consumers in lesser-known cities and towns. Investors increasingly need to assess a company’s geographical footprint.
- Online shopping. Southeast Asia’s internet economy is expected to triple to USD300 billion by 2025. Coronavirus has accelerated the trend, with more customers ordering online for the first time. ASEAN and India, in particular, should see rapid increases in online penetration.
- Traditional medicine. Rising interest in health is renewing attention on traditional products. Exports of traditional Chinese medicines rose 270 per cent over the past decade while Indonesia and India’s traditional healthcare industries are booming. However, diabetes is a key threat: associated risks are high in the Philippines, Indonesia, and India.
- Bikes are back. With people choosing healthier lifestyles and keen to avoid public transport due to COVID-19, demand for bicycles is rising. Asia, especially Taiwan, has some of the best cycle designers and component makers
- Asset accumulation. Asians are living and working longer, allowing a greater accumulation of wealth to finance an extended retirement. It may be prudent for them to plan for a time when families are unable or unwilling to care for older members: that may require new types of insurance, care and financial products.
First published 4 August 2020.
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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Herald van der Linde, CFA
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