Emerging Middle Class: 300,000 New Consumers Every Day | The Decade Ahead

**Bryce** (0:00)
There are now 4.4 billion people in the global middle class, and they drive over two-thirds of the world's spend. Over the next decade, the center of gravity is going to shift hard toward India, Southeast Asia and Latin America. And today, we're getting into how you can invest in it.
Welcome to The Decade Ahead, a 10-part series on Equity Mates where we're exploring 10 themes that we think are set up for the next 10 years. My name is Bryce.

**Ren** (0:26)
And I'm Ren. And today, we are talking about the emerging global middle class and the huge economic shifts that will result.

**Bryce** (0:33)
This episode of Equity Mates is brought to you by ANZ Business Start Right. Starting a business comes with a lot of what-ifs, and ANZ is here to help you with what's next.

**Ren** (0:42)
Well, Bryce, this is an exciting one. The emerging middle class is a story that I'm invested in. I'm particularly excited by, so I'm excited to get into this conversation today.
Now, earlier in this series, we've done an episode on emerging entertainment as a theme for the next decade. And for people that remember that episode, it really devolved into a conversation around smartphone and internet penetration across the world. Think of that as a compliment to this episode, because many of the themes converge, but it's not going to be a repeat, because there are some differences. But this is a economic wave that is sweeping the world, and we're going to talk about how we can write it.

**Bryce** (1:25)
Is this going to be an All Roads leads to Mastercard?

**Ren** (1:31)
Mastercard and Visa, but particularly Mastercard in many of these markets may get a mention.

**Bryce** (1:38)
All right. Well, let's start with where we are today. As I said in the intro, the global middle class has now surpassed 4 billion people for the first time. What happened in 2025?

**Ren** (1:47)
And I think we should just level set what we are talking about when we say the global middle class. So people are probably familiar with like the international poverty line. Back when we were kids, it was like a US dollar a day. Inflation hits everything. It's now 3 US dollars a day is the global poverty line.
The middle class is defined as 13 US dollars per day. So we're talking about people around the world emerging from lower than middle class and increasing their purchasing power to that 13 US dollars a day level. So it's not huge amounts of money, but the sheer number of people and also a US dollar goes far in a lot of these markets. And so that's the definition we're talking about.

**Bryce** (2:28)
Well, there are now 4.4 billion people in the global middle class. Roughly half of them are in the Asia Pacific region, spending at least, as you said, 13 US dollars a day. That adds up to an estimated 53 trillion dollars a year spent by the middle class, which is now over two-thirds of total global consumer spending.

**Ren** (2:48)
So the notable thing when we're talking about this shift is where it's coming from. So the past, in our lifetime, what, decade or two, the story has been China. China lifted, what, 800 million people out of extreme poverty over the past 20-odd years, which was an economic miracle, the likes of which the world has never seen in its history. And China is expected to add more people to the middle class. It's expected to add 163 million people by 2035
But really, their growth is slowing down, their demographics are changing. This story going forward is expected to be driven by three regions, India, Southeast Asia, and Latin America.

**Bryce** (3:32)
So let's get into each of those, Ren, in a bit more detail. We'll start with India, which is going to be the biggest contributor over the next decade. The middle class in India at the moment is estimated between 4 and 500 million people. It is projected to exceed 715 million people by 2031 So in the next five years, we're looking at an additional uplift of between 2 and 300 million people. Now they are blessed with the demographic story. They have a huge population that is very young, 1.4 billion people is their total population, but the median age is 28
One of the youngest large economies on earth. So as you mentioned, we spoke a lot about the India and the gaming and entertainment industry, and this is where a lot of it centers around. But this is the story for the next decade, the rise of the Indian middle class.

**Ren** (4:22)
Yes. So we spoke about smartphone penetration and internet penetration, as you said, but the important stat is whilst there's been a huge increase in number of Indian people with phones and internet access, there's still a huge runway to go.