1. The rise of middle class
Satya MAHESH, India
17th April 2012, London

2. Disclaimer
The views expressed in this message are made in an
individual capacity and do not necessarily reflect those of
Sanofi (the “company”) or any of its affiliates. Neither the
company nor any of its affiliates assumes any responsibility
or liability of any use which may be made of any views
expressed here in.

3. Change is a Cliché
3

4. but ,the Speed of Change is not…
5 Million Years 250 Years
5 Mio years ago the first modern humans appeared / 500,000 years ago - Homo sapiens / 50,000
years ago agriculture started / 5,000 years ago moved into towns and cities./ 500 years ago :
Industrial revolution or mass production (Printing Press) – 30 years ago Information Age
Each era lasted for one tenth of previous era !!!

5. Future - not a linear
extrapolation of the past
Trends may
show the path
Image from FMSI web site (Financial Management solutions Inc)

6. Increase of population
Increase of population
under democracies
under democracies
More hands to earn..
fewer mouths to feed
Money begets money
Vicious to Virtuous

7. The Indian ‘Palmystery’
Health
Wealth
Happiness

8. A dash of stats…
Health Population
Wealth
Gapminder

9. Wealth to Health or Vice Versa?
Gapminder

10. Wealth to Health or Vice Versa?
Gapminder

11. State of nations
Gapminder

13. Individually poor – Collectively middle class
Individually middle class – Collectively Rich
Gapminder

14. Exercises more consumer
rights than civil rights
Pay cheque to pay cheque
Education, family house,
Manager or Professional
White collar Job
Who are middle class ?

15. Ask ten economists , get eleven answers
Absolute Relative
Earning Consumption
Individual Household
Define the purpose

16. Per Capita earning of $2 - $ 13 / Day Ravallion
Earning
Per capita earning of $10 - $ 20 / Day World Bank
Per capita earning of $16 - $80 / Day Goldman sachs
includes those earning more than $10 a day, but excludes those in
the top 5 percent of the income distribution Birdsall (2010)
$2 and $10 per person per day consumption Banerjee and Duflo (2007)
Consumption
1/3 of income left for discretionary spendingn Dilip K. Das
Income interval from 75% to 125% of the median Thurow (1987)
$5K - $15K Disposable Income/ Yr Euromonitor
who could routinely buy items sold at a typical Western-type discount
store Miller-McCune ( 2008)

17. Is this the BRICs Decade ? Gold man Sachs Publication May ,2010

18. Poor Middle Class Rich
Money To be used To be managed To be invested
Food Quantity Quality Presentation
Time Present Future Traditions and History
Imp for making
Education Valued and Revered Crucial connections
Driving Survival, Relationships Work & Financial , Political &
Forces & Entertainment Achievement Social connections
Ruby Payne, A Framework for Understanding Poverty, Highlands, TX: aha! Process, Inc.,1996 pp. 42 - 43

19. Leapfrog the paths
Can differentiate cheap..
Economical and premium
Guarded…Saving
Modern yet ,traditional

20. !ndia
Shifting brahminical restraint
3Cs: Cable TV ,Cinema & Cricket
More mobiles than toilets
(not just mobile..FM,Calc,time)
Middle Class Car Tata Nano?
Time Cover Photo by Arthur Hochstein. Woman by hill street studios-getty images blend collection

21. Global Middle Class
MC Population in Mios 2009 2020 2030 2009 2020 2030
Middle class
Asia Pacific 525 1,740 3,228 28% 54% 66%
Population
Europe 664 703 680 36% 22% 14%
North America 338 333 322 18% 10% 7%
Central and South America 181 251 313 10% 8% 6%
Middle east and North Africa 105 165 234 6% 5% 5%
Sub -Saharan Africa 32 57 107 2% 2% 2%
World 1,845 3,249 4,884 100% 100% 100%
Mio of 2005 PPP $ 2009 2020 2030 2009 2020 2030
Middle class
Asia Pacific 4,952 14,798 32,596 23% 42% 59%
Spending
Europe 8,138 10,301 11,337 38% 29% 20%
North America 5,602 5,863 5,837 26% 17% 10%
Central and South America 1,534 2,315 3,117 7% 7% 6%
Middle east and North Africa 796 1,321 1,966 4% 4% 4%
Sub -Saharan Africa 256 448 827 1% 1% 1%
World 21,278 35,046 55,680 100% 100% 100%

22. Future : Wave of Consumption
The emerging middle class in developing countries : Homi Kharas

23. Medicine and middle class

24. Disease does not discriminate
Awareness and Affordability
Individual Income Vs. Family Income

25. Near dry pipe lines
Price pressures even in mature markets
Few innovative mols. Vs. Essential drugs

26. is middle
Good enough?

27. The next 4 Billion : GEM
Growing Emerging Middle

28. Urban - Rural divide of GEMs
Middle Class GEM
74% of Urban 41% of
Population Population
26% of Rural 59 % of
Population Population

29. Strategic imperatives….
Value Volume
Urban Rural
Life Style Life

30. What organizations can do?
Play across tiers and SE Strata
Interdependent
High Quality – Low Cost Socially sustainable
Business models
Ideal Admixture
Many small Vs few Big brands Share
Opportunities
Volumes will bring Values , costs and profits

31. Improve Trust
2012 Edelman trust barometer

32. Individual and references & Image Credits
 My Wife, Syamala and
 My collegues M/S Amlesh Ranjan , Venkatesan Subramanian
and Parthasarathy
 Marcus evans and Sponsors Bio Portfolio
 Gapminder
 Photographs from various unknown artists, CIA Fact book
 Profitable growth strategies for the Global Emerging Middle
by PWC
 The emerging middle class in developing countries : Homi
Kharas
 2012 Edelman trust barometer
 Many more references books , articles from Google search

33. ThanQ
ksatyamahesh@gmail.com
www.LCDing.com
+91 9819 62 01 62

34. Backup

35. GDP BRICs
CIA World Fact Book

36. Population Dynamics
CIA World Fact Book

37. Healthcare in BRICs
CIA World Fact Book

38. Middle Class Ethos : Brazil
Relationships
Diverse n Multi ethnic
Individual Loyalty
Hierarchy

39. Middle Class Ethos : Russia
Independent
Russian and Non Russian
Intellect
Adherence to Order
Community over Individual

40. Middle Class Ethos : India
Knowledge for Money
Spirituality and Modesty
Joint Families and Loyalty
Hierarchy
Jugad

41. Middle Class Ethos : China
Family : Valued
Society over Individual
Relationships and Reciprocity
Hierarchy : Patriarch
Morality in life: Confucius

42. Brazil : Health and Wealth last 200 Years

43. Russia : Health and Wealth last 200 Years

44. India : Health and Wealth last 200 Years

45. China : Health and Wealth last 200 Years

46. End of the presentation