As the year draws to a close, we start to think about what the new year will bring. 2024 will start against the backdrop of global crisis and uncertainty. At the same time, it will also be important to contrast the headlines which are typically painting a gloomy picture with trendlines which often show much more positive development. Negative news is mostly extreme and gets reported on. Positive news is typically gradual, less dramatic, and hence less visible. In this post, we will analyze the implications of these long-term trends for 2024.
The year 2024 will likely be a normal year for the global consumer class (defined as those spending over $12/day in purchase power parity). World Data Lab projects that the world will welcome 112m new people into the consumer class. Their additional spending will total $2.8 trillion, which is equivalent to the current consumer market of Germany and Spain combined. The following years will see even a slight increase in this trend. By the end of this decade there will be the equivalent to 10 new Germanys the world can do business with (figure 1).
Figure 1 – The steady growth of the global consumer class
Against this steady long-term trend, there are five big shifts which will come to the forefront in 2024:
Trend 1 – India ahead of China. India will cement its position as the front-runner. Next year will be the second year in a row when India will add more people to the consumer class than China (34M vs 32M). In 2024, India will also reach a momentous milestone it will be home to half a billion people in the consumer class, cementing its place as the second largest consumer market in the world.
Trend 2 – Older people. In 2024, nearly half of the increase in both the number of consumers and their spending is expected to come from individuals aged 50 and above. In contrast, people under 25 years old are projected to account for only a quarter of this growth. The senior market (ages 65 and older) is projected to see the highest spending increase, with an annual growth rate exceeding 6% over the next decade.
Trend 3 – Rich people. Wealthier consumers (those who spend more than $80 a day) are increasingly driving consumer spending. While they constitute only 18% of the new consumers in 2024, they will be responsible for 54% of the total increase in spending.
Trend 4 – Urban consumers. Urban areas are set to contribute significantly to consumer growth, with urban consumers expected to surpass 3 billion for the first time, making up 78% of the new additions to the consumer class in 2024 (compared to only 22% coming from rural settings).
Trend 5 – Global emissions might peak. Global emissions could reach their peak soon-if not in 2023, then 2024 is a likely possibility. This potential peak may be influenced by COP28 and significant changes in the energy sectors of China and the USA.
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Consumer Choices
Looking at consumer spending choices, housing, food and beverages, transportation, and restaurants will be the primary focus, accounting for half of the additional spending in 2024. Up to 2030, alcohol, healthcare, and restaurants are anticipated to be the most dynamic sectors in terms of demand growth.
Figure 2. Of the additional 112M consumers, almost 80% will live in urban areas
Source: WORLD DATA LAB
