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

Careless whispers and the impossible trinity

Time can never mend, the careless whispers of …    As the RBI marches ahead, for the upcoming monetary policy meeting this June, whispers from the corridors echo around several policy options to defend the rupee – by deploying forex reserves, raising in

Bullet Train Project: Third mountain tunnel breakthrough achieved

A major engineering milestone has been achieved in the Mumbai–Ahmedabad Bullet Train Project with the successful breakthrough of the third mountain tunnel (MT-07) at Ambesari village in Dahanu Taluka of Palghar district, Maharashtra.   With this achievement, three mountain

Supreme Court gets five new judges

Five new judges were appointed to the Supreme Court of India on Monday. "Vide Notifications of even number dated 01.06.2026, in exercise of the powers conferred by clause (2) of Article 124 of the Constitution of India, the Hon’ble President of India is pleased to appoint (i) Shri

Astonishing breadth and depth of ancient Indian knowledge systems

The Greatest Books of Ancient India: Incredible Ideas about Science, Music, Maths, Art and More By Dr. Pradeep Chakravarthy and Dr. R. Thiagarajan Hachette India, 208 pages, Rs 399  

Strong El Nino threat over India`s monsoon, food & water security

India is heading into the southwest monsoon season this year under the shadow of a rapidly strengthening El Nino, with meteorologists warning that the climate phenomenon could significantly disrupt rainfall patterns, intensify heat stress and place additional pressure on the country’s agriculture-d

How corporates can nudge real change

The Business Of Business Is (Not) Just Business: How Behavioural Tools Can Drive Real Change Edited by Sutapa Banerjee, with Foreword by Nadir Godrej HarperCollins, 336 pages, Rs 699  





Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter