In the long term, it should be noted that consumer sectors are viewed as the key drivers for overall economic growth in the emerging markets, as the emerging market customer comes of age. Countless studies and articles have shown the growing power of the emerging market consumer. One study estimated that more than half the world’s middle class could be in Asia by 2020, and Asian consumers could account for over 40% of global middle class consumption.
Market Realist – The emerging market population makes up a good chunk of the world’s total population.
The graph above shows the total population of four of the biggest emerging markets: Brazil (EWZ), Russia (RSX), India, and China (or the BRICs). These economies make up around 42% of the world’s population, which is estimated to be higher than 7 billion.
China (FXI) and India (EPI) in particular are highly populated. Respectively, they’re the highest- and the second-highest population countries in the world. Out of every eight people in the world, around three come from either India or China. Indonesia (IDX) is another important emerging economy.
All the BRIC nations are characterized by a rising middle-class population and a relatively young population compared to the developed world (EFA). Brazil has a median age of 30.7 years, while India’s median age is 27 years. Japan and Germany’s median ages are higher, at 46.1 years each.
A young population means there are more people working compared to a country with an older population. Also, a higher population means that there are more consumers. Consumption has driven India’s economic growth for decades. China (MCHI) is now transitioning into a consumption-driven economy, as we mentioned before. The advantage of being a consumption-driven economy is reduced dependence on other economies’ well-being for exports.