Ogilvy & Mather’ s Velocity Report
VELOCITY
Ogilvy & Mather’ s Velocity Report
There will be a billion more middle class people in the world, and they will be nothing like yesterday’ s middle class
INTELLIGENCE
175 words ROME JORGE
Tomorrow’ s middle class market will be from South, East, and Southeast Asia, South and Central America, and North and West Africa, unlike yesterday’ s middle class who were mostly from secular long-industrialized societies of Western Europe and North America that have declining birth rates and little room for economic growth. Tomorrow’ s middle class will be led by women. Many will be Muslim. Most will be urban and mobile. They will prefer local purpose-driven brands tailored to the needs of their culture, gender, and religion. This future is coming up fast.
All this is according to“ The Ogilvy & Mather Velocity 12 Report: The Reshaping of Global Growth” released June 2016,( http:// www. ogilvydo. com / V12markets /). The agency states that the research was compiled by contributors and experts such as economist Dr. Sujit Bhalla, chairman New Delhibased economic research and emerging-markets advisory firm Oxus Investments, and is“ based on proprietary research and a variety of best practice client cases.”
NEW BIG SPENDERS The 12 Velocity Markets— the nations with the largest increases in middle class populations— are: India, Pakistan, Bangladesh, Myanmar, Indonesia, Philippines, Vietnam, China, Egypt, Nigeria, Mexico, and Brazil.
The rankings and projections are based on Purchasing Power Parity( PPP) methodology, used worldwide to compare the income levels among different nations. The PPP theory contends that the expenditure on a similar commodity must be same in both currencies when accounted for exchange rate and the purchasing power of each currency is determined in the process. The report contends,“ Using a Purchase Power Parity( PPP) measure, nearly half of the world’ s top GDPs [ Gross Domestic Product, the monetary value of all the finished goods and services produced within a nation, most often used as a measurement of its overall economic activity ] come from V12 markets.”
According to the report, the 600 million middle class developed countries had in 1980 will only increase to 750 million, while, for the entire world, the 1 billion middle class in 1980 will increase to whopping 4.9 billion by 2025. The most dramatic increases are in South Asia. In India alone, the 431 million middle class India had in 2015 will balloon to 828 million by 2025, an increase of 397 million.
URBANITY, MOBILITY, AND LOCAL PRIDE The“ Velocity 12 Report” dovetails with the“ World Urbanization Prospects: The 2014 Revision, Highlights,” released by the United Nations, Department of Economic and Social Affairs, Population Division on July 2014( https:// esa. un. org / unpd / wup / Publications / Files / WUP2014-Highlights. pdf), that declares,“ Globally, more people live in urban areas than in rural areas, with 54 per cent of the world’ s population residing in urban areas in 2014,”“ By 2050, 66 percent of the world’ s population is projected to be urban,” and citing three of 12 velocity markets,“ India, China and Nigeria— together are expected to account for 37 percent of the projected growth of the world’ s urban population between 2014 and 2050. India is projected to add 404 million urban dwellers, China 292 million and Nigeria 212 million.”
“ For most V12 consumers, digital equals mobile,” notes the“ Velocity 12 Report.” With increasing urbanity, sophistication, and mobility comes local pride. The“ Velocity 12 Report.” also notes,“ Preference for local brands is strongest among Indonesians, Brazilians, Filipinos, Bangladeshis and Indians, with Indonesians and Bangladeshis most likely to purchase domestic brands as part of their weekly shopping patterns.”
RELIGION, VALUES, AND WOMEN The“ Velocity 12 Report” also dovetails with“ The Future of World Religions: Population Growth Projections, 2010-2050” released by the Pew Research Center on April 2015( http:// www. pewforum. org / files / 2015 / 03 / PF _ 15.04.02 _ ProjectionsFullReport. pdf) that predicts,“ If current trends continue, by 2050, the number of Muslims will nearly equal the number of Christians around the world,” and notes that India, the velocity market projected to have the largest increase in middle class,“ will retain a Hindu majority but also will have the largest Muslim population of
July- August 2016 | adobo magazine