Chinese and Indian consumers are expected to spend a combined total of US$64 trillion on goods and services between 2010 and 2020, propelling a new wave of growth in the global economy, according to Boston Consulting Group (BCG).

By 2020, these consumers will be spending a total of nearly US$10 trillion annually, three times the amount they spent in 2010.

To capture a slice of this prize, business leaders and politicians alike need to take urgent action to build for the long term, BCG urges. They should not postpone their efforts because of the current troubles facing the two emerging economies – something the authors ascribe to the inevitable volatility of emerging markets by drawing parallels with the fast-growing US economy from the 1870s onward.

“We are at a turning point in history where relative wealth will shift from the West to China and India, but absolute wealth, including in the West, should increase,” said Michael Silverstein, a senior partner at BCG.

“Western businesses and individuals wishing to gain their share need to act now. They must choose to be contenders, and remake their dreams for a new world in which China and India play a much larger role – but where the West can still prosper,” he said.

The study said that business leaders need to embrace the two markets and get to know their people: who they are, what they buy and why, how they think and shop, and how their needs and tastes are changing.

The middle class in the two countries is expected to reach one billion by 2020, with Chinese consumers born in 2009 predicted to spend 38 times more than those born in 1960. In India, the proportion of middle-class people is expected to grow from 28 per cent in 2010 to 45 per cent in 2020.

GB