How Companies Compete to Capture Loyalty of New Global Middle Class

… U.S. middle-class cohort propelled GM past Ford into a leadership position among carmakers that lasted for the rest of the century.

Today, leaders of multinational corporations have a similarly lucrative opportunity on a much bigger playing field: a global middle-class market. This worldwide economic phenomenon encompasses a huge customer base. In 2011, it includes about 400 million people in the mature middle classes of the U.S., Europe, and Japan, and another 300 to 500 million people, depending on how the middle class is defined, in emerging economies. (The World Bank defines middle class as people who are above the median poverty line of their own countries. This might make them poor by the standards of Europe or the U.S., but gives them enough purchasing power to become consumers of manufactured goods and services.) This new global middle class is particularly evident in Brazil, China, India, Indonesia, Mexico, Nigeria, Turkey, Vietnam, and other countries with relatively large working populations and rapid economic growth rates.

The middle class in each of these emerging economies has its own unique profile of demand. However, they all have one thing in common: They are recovering from the global recession with an increasingly urbanized lifestyle, and their numbers are expanding at very high rates, especially compared with the rest of the world. The value chain of companies that provide this population with goods, services, and infrastructure is becoming known as the “global middle market.” Companies that secure leading positions within that market could well become the 21st-century equivalents of Alfred Sloan’s General Motors.