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Is your middle class better than mine? Tech might be the key

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Globally, the biggest consumer brands focus on the so-called middle class – a wide swath of population with disparate income levels of, say, $100,000 a year in Australia and, a fraction of that in India.

But, all middle classes are not the same – even ignoring overall income levels.

Ones in the emerging countries might just be getting their noses ahead of their counterparts in the developed market. So much so, the current decade might just be the tipping point in that evolution, according to a global consultancy.

IMAP, the British firm, has found that the emerging middle class – or the middle class in emerging nations such as India and China – adopts technology faster than those in developed markets such as the U.K. and Australia. For example, 70% of mobile phone users in emerging markets use Bluetooth as compared to 45% in developed markets.

Is tech everything?

The Bluetooth example aside, the broader point is: the emerging nations’ middle classes are embracing technology with far more enthusiasm, leading IMAP to believe they will grow faster, and better, than western middle classes.

Can use of technology be a proxy for growth of middle classes?

Clearly, IMAP thinks it is. This is because technology is radically changing how both consumers and companies behave, and leading to new consumer dynamics. As a powerful example, the consulting group cites real-time technology and smartphones. One helps companies experiment with dynamic and fast-changing pricing models to take advantage of consumer markets; the other empowers the consumer but also helps companies zero in on the consumers’ location, for example. Social media such as Facebook is another big factor driving consumer dynamics in nearly all societies.

“The massive shift to online shopping and the use of technology to target and market to consumers is fundamentally changing the high street,” IMAP asserts in its Global Consumer Report 2012, released recently. “Additionally, the Internet breaks down national barriers, making it easier to reach international customers.”

Gareth Iley, IMAP partner, believes the global middle class is tantalisingly poised for global brands.

“This decade marks a tipping point in a fundamental long-term global economic rebalancing,” he said. “In the coming years, the growth of emerging markets will continue to outstrip the developed world by a wide margin leading to seismic shifts in the landscape of consumer purchasing power.”

By 2020, more than one billion new consumers are expected to spend between $10 and $100 per day, according to IMAP. Also, spending by these middle-class consumers in emerging markets is likely to nearly triple from $6.9 trillion in 2011 to more than $20 trillion by 2022, the combined the size of the economies of the U.S., Britain and Japan.

It would be curious to see if technology indeed tips the scales conclusively in favour of the middle classes in emerging countries.