A new report by McKinsey & Company highlights the global consumption patterns, forecasting significant transformations in how and what the world consumes by 2050. The report, titled ‘Global Consumption Outlook to 2050’, utilizes extensive data analysis and modelling to reveal a world grappling with shifting demographics, technological advancements, and climate change.

Consumption boom in emerging economies

The report predicts that emerging economies, particularly in Asia and Africa, will drive the majority of consumption growth. By 2050, these regions are expected to account for over 50 per cent of global consumption, up from approximately 35 per cent today. This shift will be due to rising incomes, urbanization, and a growing middle class.

Table: Global share in consumption

Services will take center stage. While spending on goods will continue to increase, the report highlights a significant rise in demand for services. Sectors like healthcare, education, and leisure are projected to witness substantial growth, reflecting changing lifestyles and priorities. Sustainability concerns will drive change. That is growing awareness about environmental issues and resource scarcity will significantly impact consumption patterns. Consumers are expected to increasingly favor sustainable products and services, forcing businesses to adapt and innovate. For example, India, with its growing middle class and increasing environmental concerns, provides a compelling case study on the shift towards sustainable consumption. The report highlights the increasing popularity of eco-friendly products, renewable energy solutions, and shared mobility services in the country. Technological advancements will continue to reshape consumption in profound ways. E-commerce, digital services, and the sharing economy are expected to gain further traction, transforming traditional retail and consumption models.

Rise of silver spenders

One major trend will be the rise of ‘silver spenders’. The report highlights the growing influence of the elderly population on consumption. With increasing life expectancy and improved health, this demographic is expected to become a major consumer force, particularly in sectors like healthcare, travel, and leisure. A case study from Japan, a country with a rapidly aging population, demonstrates how businesses are adapting to cater to the unique needs and preferences of older consumers.

The report also acknowledges the challenges associated with these consumption shifts. Inequality, environmental degradation, and resource constraints need to be addressed to ensure sustainable and inclusive growth. However, the it highlights the immense opportunities presented by these changes, particularly for businesses that can innovate and cater to the evolving needs of consumers.