Per capita income of $5,000 is a “key threshold for consumption” in emerging markets, according to UBS analysts Nicholas Smithie, Jennifer Delaney, and Stephen Mo.
At purchasing power parity GDP per capita of $5,000 most consumers have met their basic needs like food, shelter, and clothing and have room left for discretionary spending.
Interestingly the analysts found that households were buying tech goods at much lower incomes than expected and that “spending on ‘luxury’ white goods” like dishwashers is not as important as technology goods like mobile phones, tvs, and internet access.
The following charts from UBS show what consumers can afford and different levels of per capita income in developing economies, and what the rung of the consumption ladder that various economies are on:
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