China vs. India — Where is the momentum in consumer spending?

China vs. India — Where is the momentum in consumer spending?

Did you know that China and India are the only countries in the world that are home to over 1 billion people, respectively?

According to World Data Lab (WDL), China’s population is around 1.4 billion people, while India’s population is approximately 1.39 billion people.

Both of these countries together make up around 36% of the worldwide population. For comparison, the entire continent of Europe makes up only 9% of the worldwide population.

China vs. India

Today, China is the largest middle class* market globally, with over 900 million people. Together, they are spending over $22 billion per day. That’s almost twice the current value of Twitter’s total assets.

The middle class population in China is expected to increase in the following years, and it is projected to grow by almost 6%, reaching over 1.2 billion people by 2030.

The middle class spending share in China is currently over 83%. By 2030, it is projected to increase by over 4 percentage points.

Compared to China, India’s middle class is more dynamic since it is expected to have a growth rate of 8.5% until 2030. Today, the middle class population in India is almost 400 million people. The middle class population in India not only will increase in the following years but is also expected to double in nine years.

Until 2030, the Indian middle class population is expected to reach over 800 million people. This means that there is substantial momentum in India.

The middle class spending share in India is currently over 70%. By 2030, the spending share of India’s middle class is projected to reach over 80%.

How did the pandemic affect global consumer spending?

Due to the Covid-19 pandemic, in 2020, the global consumer class** shrank for the first time in half a century. However, the global consumer class is expected to recover in 2021, making Covid-19 a “temporary shock.”

Will consumer spending recover from the pandemic shock quicker than we had anticipated?

The average world citizen has lost two economic years due to the pandemic.

The good news is that the recovery process has already started this year, and we might recover from the Covid-19 recession sooner than we think.

“Due to the Covid-19 impact, we lost approximately two years of growth of the global consumer class in 2020″ 

Dr. Homi Kharas, Co-Founder & Senior Economic Advisor of WDL

*middle class: people spending between $11 and $110 per day in 2011 PPP

**consumer class: anyone who spends over $11 per day in 2011 PPP

Source: MarketPro by World Data Lab.