Updated July 2021

Meet your future Asian consumer

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Asia’s consumer markets are not only a story of scale, but also one of diversity and shifting preferences and behavior caused by powerful demographic, social, and economic forces.

Half of the world’s spending growth will come from Asia over the next decade, but do we really know Asia’s consumers? This kaleidoscope of consumers in this highly diverse regional economy—the fastest growing in the world—offers a $10 trillion consumption growth opportunity between now and 2030. Meet the Asian consumer in this series of charts. (Updated with additional charts on July 28, 2021.)

Don’t miss more than half the world’s consumption story over the next decade: Asia

Asian consumers are expected to account for half of global consumption growth in the next decade, offering a $10 trillion consumption growth opportunity. Globally, one of every two upper-middle-income and above households is expected to be in Asia, and one of every two transactions to be made by consumers in the region. Strong prospects for consumption in the region reflect falling rates of poverty and rising incomes and spending power. Capturing this growth will require understanding the region’s diversity and rapidly changing consumer behaviors. Companies will need to acquaint themselves with Japanese Insta-grannies, Indonesian Generation Z gamers, Indian small shop owners, Chinese lifestyle-indulging millennials, and others.

The consumption map of Asia’s cities is changing

Many companies have rightly focused on the urban consumer in Asia as mass urbanization has stimulated the bulk of consumption growth. Cities still matter. About 80 percent of Asia’s consumption growth is expected to be in urban areas over the next ten years. The largest 250 cities in the region are seen contributing two-thirds of this growth, but of those it is not the top 50 that are growing consumption fastest but the next 200, outpacing the top 50 by 2 percentage points a year.

Today and looking ahead, a granular view of urban growth is no longer only about which cities will experience the fastest consumption growth, but which consumer cohorts within cities are driving that growth. Companies and investors need to understand in detail the changing landscape and consider the “map of growth” for their offerings.

What's your map?

Distribution of households in 2030

Upper-income1 Upper-middle-income2
CAGR of number of households in income tier, 2020-30 L o w H igh
Today, Asia has around the same number of upper-income urban households as the United States; by 2030, it will have double the number. By 2030, there could be more than 20 cities with over 1 million upper-income households each, mostly in China, India, and Japan.
Across Asia, the number of upper-middle-income households will increase by more than 250,000 or 60 percent. By 2030, there could be over 70 cities with more than one million upper-middle-income households, mostly in China, India, and Indonesia.
India rises to third in the world for being home to upper-income households after the United States and China. Mumbai and Delhi are in the top ten of cities with the most upper-income households.
In India and Frontier Asia, the number of upper-middle-income households is expected to double. Dhaka is seen having the highest growth in the world with the addition of 2.4 million such households, followed by Mumbai, Karachi, and Kolkata.
Tokyo will remain the city with the largest number of upper-income households with over 5 million. Osaka, Nagoya, Seoul, and Sydney are also expected to have more than 1 million upper-income households.
Most cities in Advanced Asia are expected to have fewer upper-middle-income households than today as rising incomes lift them into the high-income bracket.
The number of upper-income households will rise rapidly in some of the major cities of Emerging Asia. Bangkok, Jakarta and Manila could double their number of such households. Hanoi and Ho Chi Minh City could quadruple the number.
Three Indonesian “new kids on the block” could each hit, and rise above, the 1 million mark for upper-middle-income households: Bekasi, Bogor, and Tangerang.
Nine cities are expected to have over 1 million upper-income households, including Beijing, Guangzhou, Nanjing, Shenzhen, and Tianjin. Shanghai is expected to add 3.0 million upper-income households, the largest increase in the world, and not far short of the 3.2 million increase expected in the whole of Japan.
In China, the number of upper-middle-income households is expected to increase by almost 50 percent. More than 150 cities are expected to add more than 100,000 upper-middle-income households.
1Annual household income of over 80 thousand in 2011 Int' $ PPP.
2Annual household income between 22 and 80 thousand in 2011 Int' $ PPP.
Note: Bubble size reflects the relative number of households in a particular income tier in 2030.
Source: McKinsey CityScope 4.1

Households in Asia are shrinking

Across Asia, the average size of households is shrinking. Most countries have experienced a decline in the past 20 years. In Indonesia, the average household size declined by 10 percent, in India by 15 percent, in Vietnam by more than 20 percent, and in China by almost 30 percent from 3.6 people in 1999 to 2.6 people in 2020. Single households are becoming a significant segment. One-third of households in Advanced Asia and more than 15 percent in China are single-person ones.

This significant demographic shift is changing patterns of demand. For instance, new forms of companionship are a growing market. The rise in the number of individuals living alone has led, for instance, to soaring ownership of pets across Asia. In the past five years, the number of pets in China, Singapore, and Thailand has jumped by 114 percent, 12 percent, and 23 percent, respectively. AI-driven chatbot companions are proving increasingly popular with hundreds of millions of users, many of them single people.

Single households require different products, including food delivered at home and smaller portions in the case of packaged food; in Japan between 2012 and 2019, the average net weight of several fast-moving consumer goods decreased by 8 percent in the case of butter to as much as 25 percent in the case of instant coffee. The rise of the single household may even lead to shifts in urbanization patterns as demand for more single-unit housing increases.

Consumers in Asia opt for Asian platforms and influencers

Asian consumers are increasingly online and mobile first across age groups, from members of Generation Z voraciously consuming video content to the more than 90 percent of seniors in Japan and South Korea expected to be online by 2030. But what platforms, influencers, and payment methods do Asian consumers prefer? Asian platforms are gaining prominence and crossing borders. However, there is still no single playbook in the region, and companies will need to adjust their digital footprint to local markets. Asia’s digital generation tends to use non-Asian social-media platforms, but largely follow local social-media influencers. They use Asian e-commerce platforms and local digital payments providers. Within this broad picture, however, there are significant variations. Chinese consumers largely adopt local platforms, while Australian consumers tend to use non-Asian ones.


Stay tuned for The future of Asia: Consumers series, which will explore major shifts in Asia’s consumer landscape and the implications for your organization.

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