McKinsey: Aussie seniors shift shopping to cyberspace, as subscriptions & BNPL rise
A new McKinsey Global Institute report has suggested that organisations that miss the Asia-Pacific market could risk missing a A$13.5 trillion consumption growth opportunity over the next decade – half the global picture.
Importantly, while scale continues to be a key characteristic of the region’s consumption story, Beyond Income: Redrawing Asia’s Consumer Map suggested a new chapter is being written based on the increasing diversity of the region’s consumer markets.
A McKinsey associate partner in Sydney and leader in McKinsey’s consumer practice, Thomas Rüdiger Smith, said companies need to get to know the distinct segments of consumers who are set to drive growth, and redraw their map of consumption in the region.
“The key feature for our region over the next ten years and beyond will not just be scale and growth, but further diversity in what are already incredibly diverse consumer markets. We expect consumers in the region to trailblaze new paths.”
“Most interesting for Australia will be almost all seniors shifting online. This is clearly accelerated by the pandemic, and the challenge is now on for businesses to grab and understand the opportunity within that trend,” Rüdiger Smith said.
“To capture these new and evolving growth opportunities, companies need to rethink their entire customer map. Doing so can help make effective decisions on a range of activity, from product development, marketing, resource allocation to what kind of ecosystem to operate in.”
The report cited that almost all 98% of seniors in Australia are expected to be online by 2030, this percentage sits at 91% today, while consumption by the senior segment is expected to grow by 60% over the next decade, twice as fast as the general population.
In addition, a further 78% of adults in Australia are expected to have at least one subscription service, up from 67% in 2018, while buy-now-pay-later grew in Australia by 57% per annum from A$2 billion in 2016 to A$9 billion in 2019; and is expected to grow 30% per year over the next three years.
The report identified ten major shifts in the Asia Pacific’s consumer markets, and estimates how much demand could follow new consumption curves that are quite different from past models driven by rising incomes and the volume of people in the consuming class.
The report stated that: “Consumers in the Asia-Pacific region are expected to account for half of global consumption growth in the next decade, equivalent to a A$13.5 trillion opportunity. Ten consumer shifts stand out, while new market-specific consumption curves are emerging, including the sharing economy.”
The report noted that these ten consumer shifts that stand out across the Asia-Pacific region is the shrinkage in the average household size and the rise of single-person households that already account for one-third of consumption growth in advanced Asia-Pacific economies and are fuelling new products and services catering to a growing singles economy. Another is seniors (aged 60 and over) whose number is expected to grow by more than 40% from 2020 to 2030.
Other shifts include a trend toward eco-responsible consumption, spreading personalisation, the rise of brands from the region, and new notions of ownership with the rise of the sharing economy, subscriptions, and the buying of second-hand goods.
The report also identified that between 15% and 65% of demand would shift to dynamic consumption curves and now is the time for companies to redraw their consumer growth map of the Asia-Pacific region.
Got a tip?
topics
Australia's shifting consumer map
Australian Seniors
consumer behaviour
cyberspace
ecommerce
McKinsey
retail trends
subscriptions
