100 Million New Potential Customer Households—Opportunities in the Global Distribution of Income

One can think of the 11 standard household income ranges covered by Global Insight's Global Consumer Markets Database as "rungs" in the income distribution "ladder." The progression of households up this income distribution ladder is not an evenly distributed flow.

Figure 1: Global Household Income Distribution—Absolute Change in Number of Households in Each IncomeRange 1997–2012

(Source: Global Insight Global Consumer Markets Database)

Here are a few key insights you can take away from this top-level look at global income distribution.

• 100 million households will be moving to the second rung of the income distribution ladder. Over the next five years, there will be a surge of 100 million additional households earning incomes between $5,000 and $10,000 (2000 US$). These households will be quickly moving out of poverty and into incomes where a number of basic consumer goods will become very affordable. There is a significant opportunity for those firms to focus their R&D and marketing strategies now to understand the needs of these households and respond with the appropriate product or product positioning to meet this emerging demand.
• 21 million new $30,000 to $40,000 (2000 US$) income households. This is a significant surge of households entering an income range where there will be more discretionary income for higher price-point consumer products. This will clearly represent more opportunity for consumer electronics and other more high-end consumer product manufacturers to design products with healthy price points to earn some margin.
• 25 million new affluent households earning more than $80,000 (2000 US$). The rise of affluence in the developed world and beyond is a powerful force that will affect a wide range of retailers and manufacturers. But this trend will likely create the most opportunity for the retail trade itself, and attract new classes of retail and formats, such as specialty operators, to parts of the world that currently seem unattractive from an investment perspective.

Chris Holling