1 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015 THE EMERGING MIDDLE CLASS IN ASIA AND THEIR CHANGING VALUES Michael Mueller, APAC COO , GfK Asia June 2015
1 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
THE EMERGING MIDDLE CLASS IN ASIA AND THEIR
CHANGING VALUES
Michael Mueller, APAC COO , GfK Asia June 2015
2 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
http://www.unicef.org/sowc2012/urbanmap/
2010 2050
By 2050, it is estimated 75% of world population will be living in
urban areas
3 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
1.8 3.2 4.9
Emerging Middle Class – some global numbers first
According to the OECD Development Center,
the size of the middle class1 worldwide could increase from …
1 OECD, defines middle-class as those with daily expenditures between USD10 and USD100 per person in purchasing power parity terms
4 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Source: Kharas, Gertz. The New Global Middle Class: A Cross-Over from West to East. Wolfensohn Center for Development at Brookings
18%
10%
36%
28%
6%
10%
2% 8%
22%
54%
5%
7%
6%
14%
66%
2009 2020 2030 Global regional distribution of the Middle Class (all regions = 100%)
We will see an explosion of the Middle Class in Asia
5 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Brand building becomes fundamental in
emerging markets to
remain competitive
New touch-points to engage consumers
are on the rise and
need to be tackled
Mindset &
Lifestyles are changing and starting
to drive purchase decisions
and consumption
More wealth and
urbanization are leading to
new aspirations and in turn
Changing values
These megatrends are driving changes across 4 areas which we
will talk about today
7 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Thrift
Sex
Modesty
Working hard
Pleasure Retribution
Nature
Cultural purity
Simplicity
Knowledge
Self interest
Adventure
Curiosity
Fulfilling work Material security
Duty
Individuality
Excitement Being youthful
Tradition
Preserving
environment
Self reliance
Freedom
Traditional gender roles
Enduring love
Authenticity
Social tolerance
Enjoying life
Beauty
Honesty
Open mindedness
Social responsibility
Health and fitness
Learning
Ambition
Power
Friendship
Having fun
Family
Social stability
A varied life Equality
Wisdom Romance
Wealth
Internationalism
Respecting ancestors
Faith
Creativity
Status
Stable relationships
Helpfulness
Looking good
Leisure
PL
EA
SU
RE
PE
OP
LE
P
OW
ER
T
RA
DIT
ION
Personal Values can be allocated into a ‘Values Space’ enabling powerful analysis:
ValueScope | The GfK Consumer Trends Values Space
8 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Roper Reports Worldwide 2014 (mixed mode trend, core 20 countries) *Urban is defined as in a city (in and out of city center, central district or downtown), rural defined as in a suburb,
small city or rural area.
Asian Middle Class consumers have an "Achiever" DNA!
Total Global Asia Pacific Markets
Suburban/Rural
16
12
13
13
11
18
17
Urban
14
11
10
8
16
31
10
Hedonists Survivors Socialrationals Nurturers Traditionalists Achievers Selfdirecteds
26
10
Urban
10
10
8 5
22
41
4
13
10
19
14
9
Suburban/Rural
9 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015 Roper Reports Worldwide 2014 (mixed mode trend, core 20 countries), Roper Reports Worldwide 2013 (mixed mode, core 21 countries – including TH), Largely Urban markets
12 18
3 1 1 9
2
27 16 40
67
36 26
30
12 10
25
18
29
14
44 9 15
6
2
3
8
2
12 12
8
5
7
9
4 11 12
10
4
16
13
15 16 17
8 4 8 20
3
Total Global Australia China* India Indonesia Japan Thailand
Selfdirecteds Achievers Traditionalists
Nurturers Socialrationals Survivors
Hedonists
The achiever mindset dominates in Urban Asia
10 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Rapid development in Asia fuels a change of values
Roper Reports Worldwide 2014
Power Tradition
Pleasure People
Power Tradition
Pleasure People
2000 2005 2010 2012 2014
Power Tradition
Pleasure People
Power Tradition
Pleasure People
Example: Urban China
11 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Rapid development in Asia fuels a change of values
Roper Reports Worldwide 2014
Power Tradition
Pleasure People
Power Tradition
Pleasure People
2000 2005 2010 2014
Power Tradition
Pleasure People
Power Tradition
Pleasure People
Power Tradition
Pleasure People
Power Tradition
Pleasure People
Example: Urban India
12 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Mindset & Lifestyle
13 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Roper Reports Worldwide 2014 (mixed mode, core 20 countries); Roper Reports Worldwide 2013 (mixed mode, core 21 countries – including TH), 1 China 2013 figures
7.8
5.7
India
4.6
Thailand
Indonesia
36.7
45.3
50.6 7.0
36.3
50.9 7.6
4.9 37.3
45.3 5.5
Global
China
Japan
Australia
Mean # of hours per week spent working, commuting (among those employed full-time)
Work is a big part of life for many Asia MC consumers
Working a paid job Commuting
48h
14 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Roper Reports Worldwide 2014 (mixed mode, core 20 countries); Roper Reports Worldwide 2013 (mixed mode, core 21 countries – including Thailand), China 2013 figures
% who do the following monthly or more
Cultural and emerging values drive experience seeking in Asia
71
56
56
80
82
81
80
37
51
35
69
71
67
73
61
23
64
19
60
50
60
22
29
28
50
53
66
60
26
21
18
16
64
37
50
Japan
China
Global
Australia
Indonesia
Thailand
India
Go shopping besides grocery
Eating Out
Entertain at home
Have a drink/snack outside
Go to the movies
15 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Roper Reports Worldwide 2014 and previous years (short trend, core 20 countries ), Roper Reports Worldwide 2011 (short trend, core 21 countries + Thailand)
Base : Middle Class Consumers
% who go shopping other than for groceries monthly or more
As a result, Consumerism running high, especially in China
58% of Chinese consumers
see shopping as a
pleasure, vs. a chore
53% Global
40% Australia
52% Indonesia
48% Thailand
63% Indian
61% Japan
82
76777571
67
5355 56
2723
30
2011 2012 2013 2014
China
India
Indonesia
16 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
In situations and places where safety is more of an issue, the
worries are higher
Roper Reports Worldwide 2013 (short trend, core 21 countries, including Thailand) , Base : Middle Class Consumers
36
19
54
20
74
37
71
58
39
70
40
54 52
88
63
50
74
40
90
60
86
Global Australia China Japan Indonesia Thailand India
"I worry about getting
sick from contaminated
food or drinks"
"I worry about how
safe the food
I buy is"
"I do everything I can to protect
myself and my family from
germs"
% top 2 box
Global
17 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
The Importance of Brands
18 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Brand trust and awareness are critically important to the Asian
Middle-Class
Roper Reports Worldwide 2014 (mixed mode trend, core 20 countries); Roper Reports Worldwide 2013 (short trend, core 21 countries -including TH), Base : Middle Class Consumers
61
51
67
33
78 73
95
61
50
72
29
74 74
89
Global Australia China Japan Indonesia Thailand India
It's better to buy well-
known brands because
you can rely on quality
I only buy products
or services from
a trusted brand
% agree
Global
19 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Brand loyalty is up notably in China, India and Indonesia, while
declining or staying same the in developed markets
Roper Reports Worldwide 2006 and 2014 (short trend, core 25 countries), Note: Not asked in Thailand in 2013 , Base : Middle Class Consumers
Brand loyalty has stagnated in many developed markets
consumers seem to have trade down to less expensive
brands. Many emerging markets, however, witness rising
loyalty. Brand loyalty in China rose notably since 2006
among the middle class consumers. Loyalty has also
gone up in India & Indonesia
69
44
24
50 64
58 47
24
67 82
51 53
23
72 79
Australia China Japan Indonesia India
2006 2011 2014
% top 2 box
Once I find a brand
that satisfies me,
I usually DON'T
experiment with new
ones
20 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Technology Intersection
21 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
*Roper Reports Worldwide 2013 (mixed mode, core 20countries), *Roper Reports Worldwide 2013 (mixed mode, core 21 countries – including Thailand); **Roper Reports Worldwide 2014
(short trend, core 20 countries); **Roper Reports Worldwide 2013 (mixed mode, core 21 countries – including Thailand) Base : Middle Class Consumers
Among those who have used the
Internet in the past 30 days*
15
25
20
13
16
12
12
7
4
14
6
19
15
18
17
5 1
3
3
3 3
China
Japan
Indonesia
Thailand
India
Australia
Global
Use Internet* Watching TV Listening to Radio
Mean # Hours per week
Thailand Middle-Class is most engaged with TV/Radio, while among
emerging countries Chinese Middle-Class ahead in internet access
22 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Roper Reports Worldwide through 2013-14 (mixed-mode trend, core 21 countries + Thailand) , Base : Middle Class Consumers
The middle class consumers do a multitude of things on their mobile
MAKE / RECEIVE CALLS
TEXT MESSAGE OR IM
TAKE PHOTOS / VIDEOS
PLAYED GAMES
84
87
84
82
91
100
Japan
India
Indonesia
Australia
China
Global
79
90
77
51
90
56
China
Japan
Australia
Global
Indonesia
India
67
62
84
49
40
20
46
40
58
34
36
31
Global
China
Australia
Japan
Indonesia
India
Global
China
Australia
Japan
Indonesia
India
% use in last month
23 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Technological change leads to the rise of mobile – markets like
Indonesia leapfrogging straight to mobile
Roper Reports Worldwide through 2013 (mixed-mode trend, core 21 countries + Thailand), QO6 | Base: Accessed Internet in past 30 days;
71
93
-
10
20
30
40
50
60
70
80
90
100
2011 2012 2013
Global Australia China Japan Indonesia Thailand India
% of respondents who accessed the Internet with their mobile phone in the past 30 days
Global
24 © GfK 2015 | Emerging Middle class in Asia and their Changing values | June 2015
Achieving aspirations | Buying trust | Target communication
As consumers enter the middle class, they increasingly gravitate towards
success-driven ‘Achievers’ – brands need to try and build this into their
communication & marketing strategies
The emerging middle-class is increasingly shopping savvy & Omni channel is
becoming a reality – brands need to work towards integrated solutions to address
this new customer in an anytime anywhere way
Trust & Brand reputation is still key to the emerging middle-class in
developing markets – creating links to authenticity and genuine care for customers
will help brands develop this important element
Smartphone penetration will propel brand communications forward – brands
will need to very quickly adapt to this new screen by personalizing & optimizing
their messaging & advertising strategies