Demography is working as a great leveller as consumption is increasingly proving to be a function of age. With millennials and Generation Z consuming a higher proportion of goods and services than older generations, India is now projected to account for 16 per cent of global consumption by 2050 - up from 4 per cent in 1997 and 9 percent in 2023.
Only North America, with a 17 per cent share, will be ahead, says a recent McKinsey report. What it calls ‘later-wave’ countries - which includes emerging Asia, Latin America, West Asia, most of Africa and India - will account for more than half of global consumption.
On the other hand, the advanced economies of North America, China and Europe will account for just 30 per cent by mid-century, half of what they gobbled up in 1997.
Driving this change is the fast-growing young population of India and the rest of the developing world.
With higher incomes, millennials have opted for increased and more focused consumption. It’s also to do with lower fertility rates that come with better education and the need to secure family futures. Thus, India’s share of world population, which was 23 per cent in 2023, will fall to 17 per cent in 2050 and 15 per cent by the end of the century.
Learning from their colonial-era mistakes, rich countries have been lowering consumption to sustainable levels. This has come with the realisation that oil and food supplies do not flow from an unending tap. Also, an ageing society is learning that wasteful consumption is not politically correct.
The flipside is that the Gen Y born in emerging markets today is more conscious of its money - it’s ready to spend on aspirational consumption such as luxury products and experiences, shows a survey by private bank UBP.
The study also says the young ones are picky, brand-focused and lean in favour of sustainable and environment-friendly consumption.
The new demographic balance - the shift towards less wasteful consumption in richer societies, together with increasing income-led consumption by Gen Y in emerging nations - is hammering out a new equity.
The McKinsey study also found evidence that the shift is forcing local and multinational companies in India to design their products to feed the new kind of hunger.