Southeast Asia’s Richest Get Bigger, Faster
The pool of rich people in Southeast Asia is going to get bigger while the number of poor will shrink, according to Macquarie GroupMQG.AU -0.41%, a financial services provider. That’s good news for businesses eager to take advantage of some of the world’s most attractive emerging markets like Indonesia and the Philippines.
But as Macquarie’s latest study shows, the businesses that could benefit most will not be those selling cheap cars and kids-wear to young people and families. They’ll be the ones offering SUVs and pension funds to professionals and retirees.
The middle income group in Southeast Asia – one that consumer companies have been fighting to tap – is less of an attractive business prospect than its richer counterpart, which is smaller in number but set to grow faster and consume more, says Macquarie.
Within Southeast Asia’s five largest economies – Indonesia, Thailand, the Philippines, Malaysia and Singapore – are 20 million people who earn more than US$50,000 a year – the “aspirational class,” as Macquarie calls it.
Thanks largely to sustained economic growth in the region, their numbers will rise by 25-50% in the next five to 10 years. At the same time, the middle-income group, which earns more than US$20,000 but less than its aspirational cohort, will grow between 16% and 28%, to between 71 million and 78 million people.
The remaining 374 million, who each earn below US$20,000, is declining overall, but still accounts for the bulk of the region’s population, giving some indication of how far those economies still have to go, particularly in Indonesia and the Philippines, where the “lower” class account for a majority.
Because they’re starting from a lower base, however, Indonesia and the Philippines are set for stronger middle-class growth than Thailand, Malaysia and Singapore, which are already more advanced economies.
That means people near the bottom of the income ladder are getting a little bit richer. In the Philippines, the middle-income group is expected to grow even faster than those in the aspirational one.
To help those newly wealthy better manage their money, Swiss bank UBS said Tuesday it had hired 88 additional client advisors in the Asia-Pacific region since the start of the year—an 8% increase—to manage the increase in business.
But what about those who still remain among the poorest? The good news is that incomes for all the 455 million people living in Southeast Asia’s five largest economies are likely to go up. Average incomes will rise by 3.6% in the next five to 10 years, according to Macquarie—faster than the global average of 2.6%, but slower than their Indian and Chinese neighbors.busi
- People look at the Singapore skyline from the skybridge of a public housing estate. A recent border-security breach has stirred concerns about shoddy policing in the orderly, low-crime city-state.
- Reuters
The pool of rich people in Southeast Asia is going to get bigger while the number of poor will shrink, according to Macquarie GroupMQG.AU -0.41%, a financial services provider. That’s good news for businesses eager to take advantage of some of the world’s most attractive emerging markets like Indonesia and the Philippines.
But as Macquarie’s latest study shows, the businesses that could benefit most will not be those selling cheap cars and kids-wear to young people and families. They’ll be the ones offering SUVs and pension funds to professionals and retirees.
The middle income group in Southeast Asia – one that consumer companies have been fighting to tap – is less of an attractive business prospect than its richer counterpart, which is smaller in number but set to grow faster and consume more, says Macquarie.
Within Southeast Asia’s five largest economies – Indonesia, Thailand, the Philippines, Malaysia and Singapore – are 20 million people who earn more than US$50,000 a year – the “aspirational class,” as Macquarie calls it.
Thanks largely to sustained economic growth in the region, their numbers will rise by 25-50% in the next five to 10 years. At the same time, the middle-income group, which earns more than US$20,000 but less than its aspirational cohort, will grow between 16% and 28%, to between 71 million and 78 million people.
The remaining 374 million, who each earn below US$20,000, is declining overall, but still accounts for the bulk of the region’s population, giving some indication of how far those economies still have to go, particularly in Indonesia and the Philippines, where the “lower” class account for a majority.
Because they’re starting from a lower base, however, Indonesia and the Philippines are set for stronger middle-class growth than Thailand, Malaysia and Singapore, which are already more advanced economies.
That means people near the bottom of the income ladder are getting a little bit richer. In the Philippines, the middle-income group is expected to grow even faster than those in the aspirational one.
To help those newly wealthy better manage their money, Swiss bank UBS said Tuesday it had hired 88 additional client advisors in the Asia-Pacific region since the start of the year—an 8% increase—to manage the increase in business.
But what about those who still remain among the poorest? The good news is that incomes for all the 455 million people living in Southeast Asia’s five largest economies are likely to go up. Average incomes will rise by 3.6% in the next five to 10 years, according to Macquarie—faster than the global average of 2.6%, but slower than their Indian and Chinese neighbors.busi
