Where to find wealthy consumers in 2024?

  • At a time when consumers around the world are tightening their budgets and pinching their pennies, we look at demographic, behavioural and political factors to determine where businesses can find high-spending consumers in 2024 and beyond.
  • Asia will continue to get richer, with China, Malaysia and India accounting for a rapidly growing pool of wealthy and ultra-wealthy households.
  • Tourism will remain a bright spot, with investment and the easing of visa rules and other regulations attracting large numbers of travellers to the Middle East, especially from China.
  • The UAE, Singapore and Australia are becoming homes to a growing pool of wealthy individuals.

One of the major trends to emerge from the post-pandemic, inflationary economic environment is the polarisation of consumer spending, with high-income consumers being relatively less affected by the sharp rise in cost of food and utilities. Businesses ranging from Diageo, a UK alcohol maker, to Samsung, a South Korean electronics giant, have highlighted premiumisation as a strategy to boost profitability. Economic headwinds in the west have turned the focus of this premiumisation strategy eastward. In this article we use EIU data to look at how demographic, behavioural and political changes are determining where businesses can find wealthy consumers in 2024 and beyond.

Asians will continue to get richer

Rapid economic growth, favourable demographics and strong growth in the services and manufacturing sectors will bring Asia an increasing share of global wealth in EIU’s forecast period of 2024-28. Income inequality is high across Asia, which means that, despite low incomes in the region’s developing countries, the region also has a rapidly growing number of wealthy consumers. The best example of this is probably in India, which we expect will make swift progress over the next five years in increasing the number of households earning over US$50,000 annually. The EIU believes that, by 2028, India will be among the top ten Asian countries with the highest number of high-income households, driven by its young and still growing population and rapidly rising personal disposable income, even as GDP per head will remain among the lowest in the region.

Further up the income band, Asia also accounts for a significant share of the world’s millionaires–up from 19% in 2019 to over 20% in 2023. We expect this share to rise to 23% in 2024, with China expected to account for more than a third of households with US$1m in wealth. According to the Wealth Report 2024 from Knight Frank, a real estate consultancy, by 2028 China will post a 47% jump in the number of ultra-wealthy individuals (with net worth of US$30m or more). Regional peers India and Malaysia will post increases of 50% and 35%, respectively, over the same period.

Businesses have been responding to the growing presence of wealthy consumers in Asia by entering new markets and boosting their physical presence in existing markets. LVMH, a French luxury giant, started increasing its footprint in China during the pandemic and opened its largest outlet in India in 2023. This takes its number of stores in Asia from about 1,700 in 2021 to over 2,000 in 2023. Strong uptake of digital commerce and online shopping in much of Asia is a factor to note, and can aid efforts by global businesses to penetrate these markets.

Tourism will be a bright spot, with the Middle East one of the popular destinations

Still high inflation, slowing wage growth and high interest rates are widely expected to slow down consumer spending across most major markets around the world. However, there will be pockets of growth across categories. Besides food and drinks, expenditure on hotels and restaurants and leisure activities will show continued growth in 2024. Some of this growth will reflect price increases by airlines and hotels, but the tourism sector will continue to see strong demand from deep-pocketed consumers. Virtuoso, a global luxury travel agency, expects travel demand as well as spending per trip to increase in 2024.

China, which before the pandemic was the source for the highest-spending international tourists has had a shaky rebound in outbound tourism since its reopening from lockdowns in end-2022 because of economic and political reasons. Departures are unlikely to reach 2019 levels before at least 2025. Even so, we expect a strong rebound in international travel in 2024, driven by moderating inflation around much of the world, the strengthening of the Chinese renminbi and recovery in flight capacity. We expect other parts of Asia as well as the Middle East to benefit significantly from this rebound, helped by improved flight  connections and easier visa agreements.

The Middle East, led by the Gulf countries of the UAE and Saudi Arabia, saw strong tourist arrivals in 2023, becoming the only region in the world to have exceeded pre-pandemic levels. Tourism is one of the sectors governments in the GCC are also focusing on to diversify their economies beyond oil, with several ongoing initiatives including easing of restrictions on alcohol sales. Consequently, we expect foreign arrivals to be a major driver of retail sales, especially in the premium and luxury categories, as well as of leisure activities in the Middle East.

In particular, the region has moved up the wishlist of wealthy Chinese tourists, who are now expected to splurge on goods and experiences in the region. This marks a shift away from the pre-pandemic days when much of Chinese tourism expenditure was made in countries in Europe. Flight connections between China and countries in the region have also increased, with an increase in direct flights between Chinese cities and Riyadh having started in April. The proposed Schengen-style unified Gulf visa, which will allow entry into all six Gulf countries (Saudi Arabia, the UAE, Qatar, Oman, Kuwait and Bahrain), is expected to further boost tourist arrivals, especially from Asian travellers, for whom easy visa arrangements are a big motivator.

Wealthy individuals from China, Russia and India are on the move 

The rich are globally mobile, and after being briefly interrupted by the pandemic, migration by high-net-worth individuals is estimated to have recovered strongly in 2022-23.Russia’s war in Ukraine turbocharged the emigration of Russian nationals, in particular wealthy and well-educated individuals. In 2022 Russia accounted for the second-highest number of millionaires to have emigrated, according to the Henley Private Wealth Migration Report, and we expect this trend to continue. India and China are also on this list, accounting for the highest and third-highest number of outward migration by millionaires. Even though both India and China have always had sizable diasporas around the world, the migration of the uber-wealthy has gained pace in recent years.

Chart showing how Chinese, Russian and Indian wealthy individuals are migrating out of their countries.

When selecting their new home countries, easy tax regulations and the presence of golden visa programmes (residence by investment) appear to be among the guiding factors. The liveability of cities in these countries (standards of education, healthcare, entertainment and other services), personal freedom and political stability are also important, making the UAE, Australia and Singapore the biggest recipients of millionaires in 2022. Businesses looking to cater to wealthy diasporas should aim to increase their presence and offerings in the UAE, Singapore and Australia.

The analysis and forecasts featured in this article are available in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify potential opportunities and risks.