middle class

We at the FT have this week been running a series on the “Fragile Middle”, defined as some 2.8bn middle class people in emerging economies who are vulnerable to ebbing fortunes. The issue has been provoking fresh debate on just what it means to be “middle class” in the world today.

Here is a run down on some of our thinking. Let us know what you think in the comments field below.

 Read more

Management consultants at McKinsey say the Indonesian middle class consists of 45m people, while their rivals at Boston Consulting Group cite a figure of 74m. The Asian Development Bank puts it at an eye-popping 146m, or 59 per cent of the population.

Either way, investors are whetting their appetites at the prospect of selling their goods and services into this undoubtedly large and fast-growing market of consumers. Read more

What will the EMs next “black swan” be? With the crash of the Argentinian peso, the difficult Syrian peace talks in Montreux, and Iran’s nuclear situation, WEF participants last week had enough scenario’s to reflect on. But one fear of Davos participants about emerging markets was a rather unexpected one: the EM middle class.

Nouriel Roubini, in the CNN debate on Emerging Markets, was quick to point it out. “Paradoxically, it’s not the proletarians that are in the street in countries like Brazil, Chile, India, or Ukraine,” he said. “It’s the middle class. They’re becoming restless.” Read more

Let's go shopping

We have a new class of customer in town, or in India at least – the “closet consumer”.

India accounts for just 1-2 per cent of the global market for luxury but this is set to rocket thanks to a newly wealthy section of the population, according to a new research from the Confederation of Indian Industry and IMRB International, the market researchers. Read more

Happy shoppers. Photo: Bloomberg

Roll up, roll up. Come and flog your wares to Indonesia’s fast growing mass of “young and upcoming but sweet and innocent” middle-class consumers, which will expand from 74m people today to 140m by 2020.

That is the message from Boston Consulting Group, the latest management consultancy to issue a bullish report on the potential of Indonesia’s new consumersRead more

Place your bets … Chilean casino operator Enjoy is staking $140m on the purchase of a casino in Uruguay’s ritzy Punta del Este resort.

Announcing the deal, Caesars Entertainment Corporation, which is selling the controlling stake in Uruguayan hotel and casino operator, Conrad, to Enjoy, called Latin America “one of the fastest growing casino gaming markets in the world”. Read more

Tuesday is middle class day in Latin America. The World Bank will publish a 200-page report on the rise of the middle class in the region. And the Brazilian government has issued a 60-pager called Voices of the middle class, the second in a series.

Both chart the astonishing rise of the middle classes in recent years – or rather, the economic boom that has allowed tens of millions of people to migrate from their countries’ lower to middle income levels. But they also raise a big question: with incomes on the rise, why has so much else remained unchanged? Read more

The FT’s Kanupriya Kapoor talks to three very different people about their lives, work and aspirations to understand what being middle class means in India.

In Europe and the US, they are often called “squeezed” or “worried”. In developing markets, they are “booming”, “growing” and, of course, “emerging”.

The middle classes are changing consumption habits around the world. Chart of the week takes a look at some key emerging markets and the level of middle class spending. Read more

Is Chile caught in the middle income trap? For Felipe Larraín, finance minister, the sight of buses being burnt on the streets of Santiago is a sign that it is.

“The middle income trap is a concern,” he told journalists on a visit to the FT on Thursday. “There is a point where people feel richer and want things like free [higher] education and free health care. But you have to hold the line.” Read more

There’s been something of a mad rush for new cars and bikes in Indonesia: more than 730 new cars and 3,300 motorbikes are hitting the streets of Jakarta each day, according to analysts.

So vehicle manufacturers were naturally wary of the new rules on downpayments implemented last month – how would it affect customer demand in a market where two-thirds buy their car or motorbike on credit? Read more

Selling jewellery to Asia’s newly rich or insurance to the emerging middle class might sound more glamorous than selling sachets of shampoo to the poor.

But in fast-growing Indonesia, lower-cost consumer goods are where it’s at, according to Standard Chartered. The combined spending power of those Indonesians making under $4/day adds up to some eye-catching numbers: they represent over half of household spending. Read more

By Ben Simpfendorfer of Silk Road Associates

The rise of the emerging world’s middle-class offers the promise of a new global growth driver at a time when American and European households are spending less.

It’s also popular to imagine the rise as a straight-line trajectory buoyed by surging sales of Louis Vuitton bags and Audi sedans.

Yet the reality is often very different, especially in China where parts of the middle class are a mile wide, but an inch deep. Read more

It’s a slow week on Asian stock exchanges with many markets closed for the Chinese New Year, so you’d expect some wild price movements on the few exchanges trading in low liquidity. Unilever Indonesia is a case in point: its shares soared by nearly 20 per cent in early trading on Tuesday before falling back to a more modest gain of about 5 per cent.

Even so, that’s not a bad profit for one day. And it brings the stock’s gain to a stellar 43 per cent from its most recent low in mid September. What is driving Unilever upwards? Read more

The money-spinning potential of Africa’s burgeoning middle class has been likened to a lot of things. But the next China?

That’s what Yum! Brands, the inanely-punctuated US owner of the Taco Bell and KFC restaurant chains, seems to think. Having spent the last two decades conquering the Chinese fast food scene, the company now has its sights firmly set on Africa. Read more

Who wants to bet on the future of Mexico’s domestic economy? With private-sector economists revising down their 2011 growth forecasts, the number of takers may be starting to dwindle. But Aureos is piling on the chips.

This week, the private equity fund management company announced that it had bought a majority participation in Handell, a Mexican outfit that imports and distributes some of the world’s leading brands of toys. Read more

Over the weekend Wikileaks released a trove of 100,000 new cables, including dispatches from the US Embassy in Moscow. As the cables reveal, US diplomats have been tracking every aspect of Russian society for the past decade. Yet their conclusions read less like a John le Carré novel, and more like Reader’s Digest.

Among the cables is a dispatch devoted exclusivelyto the rise of fitness clubs in Russia, while others look at different trends characterising Russia’s middle class, including their wages, political convictions and ideological beliefs. Read more

Talk to an economist about Brazil and sooner or later the same old cliché will pop up: ‘the rise of the middle classes’.

This stock phrase has become the go-to explanation for pretty much everything in Brazil; from why the country’s retailers are posting record profits, to why traffic is so bad in São Paulo, and why Chinese manufacturers are lining up to invest in local factories.

But who are these new middle classes, the C class that now includes 95m Brazilians and makes up just over half of the country’s population? Read more