September 27, 2019 – The growing middle class is reshaping economies around the world. Even in Europe, where living standards have been on the rise for nearly two centuries, the already-vibrant middle class is expected to increase spending by 38 percent over the next decade.
Globally, our study with Oxford Economics projects that 60 percent of all new consumer spending by 2030 will come from the middle class, much of it from new entrants to this group. Regions that are still globalizing, like Asia in particular, are expected to have a tremendous impact on the global economy.
In Europe, rising income will boost consumption for a new middle and upper middle class in Central and Eastern Europe. In western Europe, the existing middle class will continue to shift upward toward greater affluence, with 55 percent of all new consumer spending expected to come from “new affluent” households… that’s nearly 450 billion U.S. dollars in additional spending by 2030. This would be like adding a second London to European consumption.Based on the Visa Globalization Index, the majority of Europe’s consumer spending still occurs in cities, in particular cities at the top of our globalization ranking. Yet, the pace of growth in total spend is now the fastest in cities that are relatively less globalized. These cities are expected to see higher growth in conspicuous spending categories such as apparel and personal transport. In cities that are still in the process of globalizing, in the U.K. and Germany in particular, the consumer shows a strong affinity for global brands.
Other highlights of this report:
- Faster growth expected in global cities in spending for “experience-based” categories like lodging.
- Unlike in other areas of the world, when it comes to digital payment integration, national borders still matter in Europe.
- Spending patterns across Europe will likely continue to converge toward the patterns set by globalized cities.
View video:
