Demand for premium goods (or those costing at least 20% more than the average price of the category) is rising globally thanks to increased buying power, emotional connection to products and status aspirations in emerging markets. The findings, published last month in a report by Nielsen, are based on data from more than 30,000 consumers in 63 countries. Highlights include:
- Middle Class Boom: The Organization for Economic Cooperation and Development (OECD) predicts that the global middle class will rise from 1.8 billion in 2009 to 4.9 billion consumers by 2030, with much of this growth attributed to emerging markets in Asia.
- Feel Appeal: Alongside increasing discretionary incomes, “consumers are craving products that offer a total experience,” said Liana Lubel, senior vice-president at Nielsen Innovative Practice. “Many consumers are also buying based on how products make them feel, and premium products tap directly into a desire for products that provide specialised, enhanced or exclusive benefits.”
- High Quality: While only 31% of respondents are drawn to premium products because they are expensive, more than half (54%) said their attraction lies in “exceptional quality and performance” as well as “high-quality materials or ingredients”.
- Confidence Boost: Fifty-two per cent of global respondents either somewhat or strongly agree that purchasing a premium product makes them feel good. Consumers in India, China, Africa/Middle East and Southeast Asia identified most strongly with this statement, while those in more developed markets agreed to a lesser degree.
For more on the nuanced preferences of middle-class consumers in emerging markets, see Cannes Lions 2016: Maverick Audiences.