Delhi, Mumbai may contribute in global urban consumption growth

A report by McKinsey Global Institute predicts an increase of USD 23 trillion by 2030 in global urban consumption

GN Bureau | April 5, 2016


#Delhi   #Mumbai   #McKinsey Global Institute  


Two Indian cities – Delhi and Mumbai – will likely be contributing significantly to global urban consumption during a course of 15 years, as per a report by McKinsey Global Institute (MGI). The global management consulting firm, in its report, has said that global urban consumption will increase by USD 23 trillion by 2030 (from 2015).

The report adds that just 32 cities are likely to generate one-quarter of total urban consumption growth, with 100 cities accounting for 45 percent of that growth. Of the 32 cities, Delhi and Mumbai feature from India, in fact, from the whole of South Asia. In comparison to this, 12 of the 32 cities lie in China alone while 11 are from the US.

Pointing towards the rising importance of emerging economies with respect to consumption, the report says, “In 2015, emerging market cities accounted for just 23 percent of global consumption, but between 2015 and 2030 they will generate 56 percent of consumption growth. Consistent with the importance of North America and China in the global consumer groups to watch, cities in these two regions feature prominently in the global consumption growth landscape. Just 315 large cities in China and North America are likely to contribute more than 40 percent of global consumption growth to 2030.”

Of the top 20 global cities by consumption growth, seven are projected to be in the US and six in China. UK’s London tops the ranking with the highest projected consumption growth rate during 2015-2030, but it is the only European city in the top 20. Here, Mumbai stands at the 11th spot.

The report finds that the demand for goods and services beyond necessities is soaring because millions of people are attaining income thresholds at which their consumption takes off rapidly. “In India, such spending accounted for 35 percent of average household consumption; by 2025, MGI expects this share to have increased to 70 percent. In the case of urban India, household consumption of education and entertainment accounts for more than one tenth of total household consumption. Yet different products tend to take off at different income levels, which means depending on the income level of individual cities, the goods and service markets growing most rapidly will vary,” the report says.

It also finds that just nine groups of “consumers to watch” are projected to generate three-quarters of global urban consumption growth. “Of these, just three groups have the scale and spending power to reshape global demand and the world economy. They are the retiring and elderly in developed countries (aged 60-plus); those of working age in China (aged 15 to 59); and the working-age population of North America (also aged 15 to 59). These three are expected to generate $11 trillion—48 percent—of global urban consumption growth from 2015 to 2030.” 
 

Comments

 

Other News

Beyond toilets: Why open defecation persists in rural India

Despite the awareness campaigns on sanitation across India, open defecation (OD) is practised openly and widely in both rural and urban areas. Research shows that rural respondents are well aware of the negative impacts of OD, yet this awareness does not lead to toilet construction or use. In rural North I

What unpaid nation builders want from policymakers

The Supreme Court recently described homemakers as “nation builders” and fixed a notional monthly income of Rs 30,000 for them in motor accident compensation cases. The judgment was not about wages. It was about compensation. Yet it inadvertently raised a larger economic question: If a homemake

What the US–Iran peace deal means for India

After months of rising tensions, the United States and Iran have reached a memorandum of understanding called the "Islamabad Agreement." This agreement allows for the immediate reopening of the Strait of Hormuz without tolls and provides Iran with relief from sanctions, depending on its complianc

V. M. Tarkunde: A legal luminary par excellence

14 Lawyers: Portraits from The Bar By Raju Ramachandran  Juggernaut, 248 pages, Rs. 799  

The Cost of Obesity

The latest episode of Checks and Balances focuses on the ticking time bomb of obesity in India, and Geetanjali Minhas of Governance Now spoke with a panel of experts. You can watch the episode here: https://youtu.be/mH

US-Iran deal: Path to peace or prelude to deeper regional quagmire?

In the midst of deep mistrust, the US and Iran are reported to have reached a framework deal for ending the West Asian conflict. But whether it will result in any meaningful breakthrough or pave the way for any lasting peace in the region, is in the realm of speculation.   During





Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter