1.
GROWING ROLE OF CITIES: OVERVIEW OF THE
LATEST URBAN TRENDS AND WHY THEY MATTER
FOR BUSINESS
KASPARAS ADOMAITIS, SENIOR CITY ANALYST
UGNE SALTENYTE, CITY ANALYST

2.
WHY ARE CITIES IMPORTANT?
GROWING ROLE OF CITIES
SUB-NATIONAL DIFFERENCES
THREE KEY TAKEAWAYS

3.
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Country
(emerging
markets)
Urban extents
(sq km)
% Total land
area in urban
extents
% of total
population in
urban extents
China 380,588 4% 50%
Indonesia 42,204 2% 36%
India 223,398 7% 28%
Nigeria 17,298 2% 33%
50% of China’s 1 billion+
population lives in only
400,000 sq km – area
equivalent to Sweden
As urbanisation rate is
higher and urban sprawl
more pervasive, urbanised
areas generally cover
larger share of land mass
in developed countries
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS
Country
(developed
world)
Urban extents
(sq km)
% Total land
area in urban
extents
% of total
population in
urban extents
USA 794,416 9% 85%
UK 60,054 24% 85%
Japan 108,927 29% 80%
Germany 62,513 18% 70%
Urban world: small land areas are home to huge consumer markets
Source: NASA Socioeconomic Data and Applications Center (SEDAC)

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It pays off to focus on key
cities: in most markets,
growth of consumer
expenditure in largest
cities will outpace country
growth
In Sub-Saharan countries
(Kenya, Cameroon, South
Africa, Nigeria), the
growth in dominance of
major cities will be
particularly fast: their
share in total country
consumer spending will
rise by 5-8 percentage
points
Growing role of major cities in emerging markets
Currently important cities will only grow in importance over 2014-2030
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS
-2% 0% 2% 4% 6% 8% 10%
Mexico
Brazil
Philippines
Pakistan
Iran
Argentina
Egypt
Azerbaijan
Chile
Saudi Arabia
Poland
Bolivia
Colombia
Romania
India
China
Average
Malaysia
Morocco
Nigeria
Russia
Indonesia
Turkey
United Arab Emirates
Jordan
South Africa
Vietnam
Kenya
Cameroon
Belarus
Thailand
Share of five major cities in total country consumer expenditure,
% change over 2014-2030
Emerging markets

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India Brazil
Benefits of market growth can be captured by focusing on a few
locations in a country
Contribution to growth in consumer spending by city (2014-2030)
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS
Total country
growth:
US$1,6
trillion
Total growth
in 20 key
cities:
US$350
billion
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Growthinconsumerspending,US$million,
constantvalueterms
Total country
growth:
US$760
billion
Total growth
in 20 key
cities:
US$340
billion
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Only a small number of locations can account for substantial share of market growth. In India, only 20 locations will
add up to 22% of total country growth. In Brazil, 20 cities will account for 45% of total country growth.

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Emerging economies are attractive for investment as rapidly growing consumer
markets;
At the same time, emerging markets face huge inequality between sub-national regions,
making some areas substantially more attractive over others;
Due to regional inequality, a few well-developed cities/dense urban conglomerations in
emerging markets can even show spending patterns similar to developed world, while
the rest of the country is struggling with poverty.
Sub-national differences matter
World’s countries with largest regional differences
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS
Brazil India Turkey
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Consumerexpenditurepercapita,
US$,2014
0
500
1,000
1,500
2,000
2,500
3,000
0
2,000
4,000
6,000
8,000
10,000
12,000

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Bangalore
(most affluent)
Varanasi
(least affluent)
Total population,
(million, 2014)
9.3 1.5
Forecast population growth
(total growth over 2014-2030, %)
47 20
Population aged 0-14
(% of total, 2014)
23 32
Number of households with
income over US$55,000 (2014)
75,000 1,100
Average expenditure per capita,
(US$, 2014)
2,694 556
Spending on food and drinks
(% of total, 2014)
23 35
Possession of washing machine,
(% of households, 2014)
26 2.5
Possession of car
(% of households, 2014)
22 9.2
Possession of Internet enabled PC
(% of households, 2014)
37 22
Five fold difference in
consumer expenditure per
capita
Different demographics
(see pop aged 0-14) reveal
different sources of
population growth
(immigration in
Bangalore vs natural
growth in Varanasi)
Ownership of cars and
access to internet reveal
completely different
lifestyles
Illustrating city-level differences: India
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS

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Developed countries face lower regional inequality, yet the differences still can be easily
observed;
In world’s countries with lowest inter-regional differences, France, Germany and
Japan, less affluent cities reach only 70-76% of per capita consumer spending level of
the most affluent city
Sub-national differences matter even in relatively homogenous markets
World’s countries with lowest regional differences
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS
France Germany Japan
0
5,000
10,000
15,000
20,000
25,000
30,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
5,000
10,000
15,000
20,000
25,000
30,000
Consumerexpenditurepercapita,
US$,2014

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Paris
(most affluent)
Lille
(least affluent)
Total population,
(million, 2014)
12 1.4
Forecast population growth
(total growth over 2014-2030, %)
6.3 3.9
Population aged 0-14
(% of total, 2014)
20 20
Number of households with
income over US$55,000 (2014)
3,022,000 249,900
Average expenditure per capita,
(US$, 2014)
28,277 21,707
Spending on food and drinks
(% of total, 2014)
13 14
Possession of washing machine,
(% of households, 2014)
94 97
Possession of car
(% of households, 2014)
67 81
Possession of Internet enabled PC
(% of households, 2014)
90 80
Expenditure per capita in
Lille is only 77% of
expenditure per capita in
Paris
Despite high consumer
income in Paris,
ownership of passenger
cars is considerably lower
in the city
Lille metropolitan area is
growing at considerably
lower rate than Paris, the
country’s leading city
Illustrating city-level differences: France
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS

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Urbanisation and economic growth generally means
world’s major cities economically will become even more
important over next 15 years, as they continue to
concentrate population and income.
Even in large countries it can pay-off to focus on several
major cities. For example, in Brazil and India, doing
business in merely 20 locations will help to 25-50% of
total market growth.
Inter-regional differences in emerging markets can be
particularly large in terms of consumer expenditure
patterns, population demographics, or household
lifestyle.
Three key takeaways: why are cities important?
GROWING ROLE OF CITIES: OVERVIEW OF THE LATEST URBAN TRENDS AND WHY THEY MATTER FOR BUSINESS

11.
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