US public relations firm Ogilvy & Mather identified 12 emerging markets that will be key to middle-class consumer growth over the next decade－showing a shift to South Asia as the epicenter of future middle-class growth, according to its new report released in Beijing on Tuesday.
The South Asian markets focus principally on India, but include Pakistan, Bangladesh, Myanmar, Indonesia and the Philippines. The vast arc of future growth extends up to China, and to Egypt, Nigeria, Mexico and Brazil in the other direction.
In the next 10 years, these 12 markets will be the source of the next billion middle-class consumers, Ogilvy & Mather said. They will create a critical tipping point as the middle class moves from a minority to the majority of the local population in many of these markets.
"The research shows the world as it will be in the not-too-distant future. A billion new middle-class members will literally change its shape. It will become, for instance, much more orientated to South Asia, especially India," said Miles Young, chairman and CEO of Ogilvy & Mather.
"Most Western businesses simply are not used to thinking this way. This means finding a new lexicon of growth, as the phrase 'emerging market' now doesn't fully describe the new realities. 'Velocity' better describes the real transformation in these markets."
Ogilvy & Mather said that the BRIC (Brazil, Russia, India and China) index of markets has outlived its usefulness. The new ranking provides a different perspective on future global growth and challenges some of the outdated notions about emerging markets.
The research, which measures middle-class growth in terms of income, rather than assets, used a purchasing power parity methodology to equalize the purchasing power of different currencies. It also assessed markets based on the velocity of growth and change. Some companies have grossly underestimated this factor in their global growth plans.
"These new dynamics are particularly relevant to China and Chinese businesses as they look to grow their footprint along the route of the Belt and Road Initiative and beyond. Successfully executing this expansion is critical for China's transition to a new model for growth in the 21st century," Young said.
The report, which was conducted for the first time, surveyed 3,600 consumers from the 12 markets. It also addresses a range of social, cultural, technological and lifestyle trends.
Wang Wen, executive dean of the Chongyang Institute for Financial Studies, Renmin University of China, said: "The report helped address the transformation of brands and provides more information on those new and less familiar markets to the public. Entrepreneurship will also alter trade and investment patterns in these markets."