Asia’s tectonic demographic shifts
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.
These population changes are already having an impact on lifestyles and consumer spending. Here we highlight 10 key trends in Asian demographics that businesses and investors in the region should have on their radar.
1. India overtakes mainland 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.
2. 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.
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.
4. Shrinking households
The proportion of single-person households in South 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.
5. More working women
This trend is especially pronounced 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
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