Things are Getting Better in the World
We read in the paper and online the suffering and tragedies that happen around the global. We hear about the “Developed” world (the West) and the “Developing” world (the East), basically meaning the have and have nots. Hans Rosling’s, in his book, Factfulness, makes a strong case that the world is much more than a world of the rich west and the poor rest of the world. Back in the 1990s the term “BRIC” came about to describe the economies of Brazil, Russia, India and China, also known as Emerging Countries. Rosling says while the world’s population is increasing, it is getting wealthier and living longer as well. Below are statistics that tell that story.
| Category | Year | Percent | Year | Percent |
| Girls in School | 1970 | 65% | 2015 | 90% |
| Mobile Phones | 1980 | 0.0003% | 2017 | 87.967% |
| Clean Water | 1980 | 58% | 2015 | 88% |
| Immunization | 1980 | 22% | 2016 | 88% |
| Living on less the $1 a day | 1980 | 1.25 billion | 2016 | <1 billion |
| % of people undernourished | 1980 | 28% | 2015 | 11% |
| Life Expectancy (globally) | 1800 | 31 years | 2017 | 72 years |
Population increasing more slowly
The number of women having 5 of more children in decreasing, mainly due to better education and contraceptive. At the same time, fewer babies are dying in the first year of birth. The population is increasing, but at a slower rate. The children are healthier, the families are wealthier, and with this wealth are buying more goods. In the western world the birthrate is declining, and this portends is a shift in wealth from the west to the east.
Rosling says in his book that “by the end of the century, the UN expects there to have been almost no change in the Americas and Europe [populations], but 3 billion more people in Africa and 1 billion more in Asia.” That is a lot of consumers in Asia and Africa. Let’s examine the changes that have happened over the last 50 years.
India:
- Population – 1.37 billion (compared to 328 million in the US).
- Middle Class ($4-10 a day) has grown from 66.4 million in 2004 to 158 million in 2012. See India Middle Class
- In 1970, less than 5% of India had a high school education, by 2010 it was 33%, see link.
- In 2016-17 over 35 million Indians were enrolled in post-secondary (after high school) education. In the US, the number is 19 million, see link.
- Number of mobile phones in India is 731 million.
China:
- Population – 1.386 billion.
- In 2015, China surpassed the US in the number of middle-income people 109 million.
- By 2020, China will have 700 million middle-income people, more than twice the population of the US, see link.
- In 1970, about 11% of China had a high school education, by 2019 it was over 61% see link.
- Literacy rate is 96.3%.
- In 2017, 7.36 million Chinese graduated with bachelor’s degrees, 3 million more than in 2007.
- Over 1 billion mobile phone users in China.
Amazon, leader in Asia?
Amazon is the big force in the western world and you already know about them, with revenue of $232.88 billion (2018), almost $100 billion more than 2016 ($135 billion). But you may not know about the big players in the Asia world of e-commerce, such as Jingdong and Alibaba. Note: Currency rate as of March 9, 2019 (Chinese Yuan 6.92 to US Dollar)
- Jingdong – 462B Yuan or $68.73 billion USD with sales increasing 25% a year.
- Alibaba – 250.3B Yuan or $37.24 billion USD with 29% yearly sales growth
- Walmart bought 77% of Flipkart (biggest e-commerce company in India), for $16 billion in August of 2018.
Africa:
For many years Africa has been considered a poor continent with little hope of ever getting out of poverty. That is no longer the case.
- According to the UN, the population of Africa by 2025 will be greater than China (The Economist, March 9, 2019).
- The tiny nation of Djibouti, located in north-east Africa, is where 1/3 of the world’s shipping passes.
- More than 320 embassies open in Africa between 2010-16.
- Sub-Saharan countries (those south of the Sahara) will grow at almost 5% of over the next five year.
- The number of children enrolled in primary schools in sub-Saharan Africa rose by 75% to 144 million between 1999 and 2012.
- According to McKinsey, it is estimated that between 2008 and 2020, there is a $40 billion growth opportunity in food and consumer goods in Nigeria, the highest of any African nation, see link.
- There are 250 million smartphone users in Africa with a total of 444 million mobile subscribers.
Business opportunities abound around the world and the “developing” world has the education and the money to buy what you are offering. Think about how you want to position your company in Asia and Africa.
Key Points:
India has twice the number of cell phones as the US, and 300 million are smart phones. China has over 1 billion cell phone users and Africa has 250 million smart phone users. And there is an increase in income in these regions of the world with 5-6% GDP growth a year, much faster than the western world. These are people who can afford your digital product.
Action:
- Determine which Asian and/or African markets make sense for your business.
- Digital products are much easier to sell in Asia and Africa than are physical products. Do you have a digital product to provide to those markets?
- If the answer is no, what type of digital product could you create for those markets?
Leave me a comment on the blog post, I’d like to hear how you will take advantage of the growth in Asia and Africa.