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HSBC – Asia’s Tectonic Demographic Shifts

By Herald van der Linde, Head of Equity Strategy, Asia Pacific, HSBC

ectonic shifts are taking place in Asia. Mainland China will soon no longer have the world’s largest population. Asians are getting older, living longer, and flocking to mid-tier cities. Women are having fewer children and working more; households are getting smaller.

These population changes are already having an impact on lifestyles and consumer spending. Here we highlight 10 key trends in Asian demographics that businesses and investors in the region should have on their radar.

1. India overtakes mainland China

By 2030, India is expected to become the most populous country, with mainland China’s population starting to shrink. Companies need to consider the implications well before this happens: for instance, can they offset slower volume growth by offering better quality products at higher prices.

2. Falling populations

Very low fertility rates may become common but slowing population growth does not necessarily mean a shrinking labour force. While Japan’s populace is falling, its workforce has been growing since 2013.

3. Empty-nesters

The combination of an ageing population, children leaving home and more women working is a powerful force in mainland China. These ‘empty-nesters’ are one of the world’s largest demographic shifts: they buy more premium products – better quality at higher prices – on almost everything from food and clothing to home furnishings.

4. Shrinking households

The proportion of single-person households in South Korea is estimated to reach almost 33 per cent by 2030. This changes spending patterns – more discretionary consumption and ready-to-eat meals from convenience stores. Expect similar trends in Taiwan and parts of mainland China.

5. More working women

This trend is especially pronounced in mainland China and Indonesia, where more women are completing higher education and getting managerial jobs. This boosts household income and impacts how families spend their income.

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