Thursday, 17 September 2009

Women power and the incremental 5 trillion USD

The news-week in its Sep 21 issue talks of the ‘real emerging market’, the estimated 5 trillion USD of new female earned income that will be generated in the next 5 years.

Men earn 20 Trillion USD today compared to women (10 Tn USD), but the growth in income will largely be driven by women in the next 5years.

This is a BCG study and I don’t have access to the methodology.

As a marketer this is very big news, and I tried to dissect this with Ritu to understand what the implications are:

1. In the developed world significant numbers of women are educated and employed. Younger women while replacing the older women will move onto more higher paying jobs but this will be an incremental.
2. So the onus on creating this incremental 5 Tn USD will lie on the women of the developing world. They are more in number and getting access to education and job opportunities in larger numbers.

The problem however is that much of the work coming into the developing world is low end manufacturing or service which does not pay as much but employs large numbers of women.

The 5 trillion will be distributed over many many women, most earning between USD 1000 and USD 4000 per year.

At this level of personal income or ‘incremental family income’, spending is still limited to achievement of ‘family dreams’- TV, fridge , washing machine, car or house, the children’s education.

The number of women who will indulge on themselves will remain a very small percentage.
We disagree with analysts who say that “companies like Visa, Wal-Mart, Nestle, Johnson & Johnson, and others that already have a strong leg up in the women's market stand to prosper further from the female consumer boom.”

Companies that serve the ‘family dream’ market of the millions of families that re beginning to enter the middle class will be the real winners.

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