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Opinion | Why India could soon dethrone China as world’s top consumer market
- The speed of India’s rise in consumerism is outpacing China’s as the gap between the two countries’ markets continues to narrow
- If it wants to maintain its lead as the world’s top market, China must broaden its focus to include rural areas and cater to often-overlooked consumer bases
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China’s status as the world’s top commercial power is being tested amid an economic slowdown and demographic shifts. Its sheer size, infrastructure and government efforts to move the country to a consumption-driven economy provide a strong foundation, but Asia’s other emerging markets – particularly India – are poised to challenge China’s top spot.
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India’s consumer market is witnessing a remarkable acceleration fuelled by a rise in middle- to high-income households. The country’s per capita household spending rate is expected to soon surpass that of other developing Asian economies, including Indonesia, the Philippines and Thailand.
Moreover, the speed of India’s rise in consumerism is outpacing China’s as the gap between the two countries’ consumer markets narrows. Projections suggest that India will boast a consumer base of 773 million people by 2030, marking a 46 per cent increase from the 529 million recorded in 2023. China is still expected to maintain a larger total, with more than 1 billion consumers by 2030, but this represents 15 per cent growth from 2024.
The dynamics powering consumerism in each country are being shaped by the unique characteristics of their middle classes. China’s middle class tend to be concentrated in urban areas, while India’s can be found both in urban and rural areas.
As India’s middle class is less centralised, this could make it harder to access new consumers in the near term, until the dispersion of resources, labour and capital between urban and rural areas begins to equalise. Meanwhile, China needs to encourage citizens living beyond its first-tier cities, as well as in more rural areas, to spend more aggressively.
02:09
China’s young abandon consumerism in favour of fulfilling experiences
China’s young abandon consumerism in favour of fulfilling experiences
Consumption is currently driven by China’s largest cities, where consumers spend 80 per cent more per capita than the national average. However, household incomes in lower-tier markets have risen, creating more opportunities for consumer spending. Even so, many residents still prefer to save rather than spend as the economy cools, particularly in the face of a struggling property market.
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