As Bangladesh economy maintains a steady growth over the years, a large portion of the population have already entered into the middle-income and affluent consumers (MAC) socio-economic category, said a report.
It said if Bangladesh could maintain this pace, MAC population will grow by 65% from the present 11m over the next five years. By 2025, it is expected to nearly triple to about 34m.
The Boston Consulting Group (BCG), a global management consulting firm and the world’s leading advisor on business strategy, unearthed the findings.
The report, titled Bangladesh: “The Surging Consumer Market: Nobody Saw Coming,” released at a hotel in Dhaka yesterday.
The findings are based on research by BCG’s centre for customer insight that included a survey of more than 2,000 Bangladeshi consumers and analysis of their consumption patterns.
Zunaid Ahmed Palak, state minister for ICT, formally released the report while Shameem Ahsan, president of Bangladesh Association of Software and Information Services (BASIS), Zarif Munir, a BCG partner and co-author of the report, Olivier Muehlstein, BCG partner and Vivek Nauhbar, BCG consultant, were also present at the function.
Zunaid Ahmed Palak said the country’s economy was growing rapidly and there were huge potentials to maintain the growth. “We are rapidly adopting advanced mobile Internet technologies. And everything has been possible due to a visionary leadership of Prime Minister Sheikh Hasina.”
Zarif Munir said: “Bangladesh is one of the greatest untapped growth markets in Asia, yet has been off the radar of most major consumer-product companies.”
According to the report, Bangladeshi consumers cited brands as the leading factor they consider during purchase, followed closely by price and quality.
The findings indicate that the mobile internet will become an increasingly powerful tool for engaging with Bangladeshi consumers.
Customers are also rapidly embracing smart-phones and high-speed internet services, the report said. To reach future consumers, companies must curate online information and develop a strategy that addresses the growing mobile e-commerce market, it said.
The report mentions that Bangladesh is emerging as one of the world’s next great growth opportunities for companies with a keen understanding of the nation’s rising consumer class.
Bangladesh is adding 2m middle-income and affluent consumers each year who are highly optimistic about the future, value foreign brands, and are jumping on the digital bandwagon.
The report focuses on Bangladesh’s middle and affluent class (MAC), which the firm defines as individuals with annual household income of around $5,000 or more. That means that these consumers earn enough and can afford to buy goods that offer convenience and luxury, such as air conditioners, imported shampoos, and cosmetics.
Although only 7% of Bangladesh’s 160m population is classified as middle-income or affluent—compared with 21% in Vietnam and 38% in Indonesia—their ranks are growing rapidly due to a decade of stable economic growth, a growing working-age population, and strong upward mobility.
Bangladesh’s MAC population is projected to triple by 2025, to 34m. Consumer wealth is also dispersing beyond the major cities of Dhaka and Chittagong.
The BCG survey of Bangladesh consumers found evidence of huge potential demand for branded consumer products—but also revealed that a willingness to spend is tempered by wariness of taking on debt. Sixty percent of consumers surveyed said they expect their incomes to rise over the next 12 months, and 69% said there are more things they want to buy.
What’s more, most Bangladeshis — 80% in the case of consumer durables—cited brand as a top factor influencing their buying decisions. The majority of respondents also placed a high priority on quality.
Around half of Bangladeshi consumers reported that they are concerned about their ability to repay debts, and around two-thirds said they believe that uncertainty about Bangladesh’s economy could impact their financial health. As a result, the majority of those surveyed also cited price as a top priority.