The Five Future Megatrends Affecting the Region
Regular trips to Asia, retail customer meetings, APAC industry keynotes, and recent business articles confirm that economically China is 
going "Back to the Future".
Before USA surpassed it in 1890, China was the world's largest economy. By the end of 2014 China is on track to become the world's number one economy once again. This crowning achievement is arriving 5 years earlier than originally projected by the IMF.
It took 155 years for the UK to double its GDP with about 9 million people in 1870. The USA and Germany took 30 to 60 years with tens of millions of people. China and India, with 100 times the number of people than the UK doubled their GDP in one tenth of the time.
Asia Market / Technology Trends
By 2030, the majority of the world’s population will be considered middle class. China and India will have the largest middle class consumption as a share of the world's total population.
By 2022, China will account for around a quarter of the total global retail sales generated by the largest 60 markets and its retail market will be twice the size as USA.
Over the past decade, the share of people living in China's urban cities increased from 36% to nearly 50%. If trends hold, China's urban population will expand from 570 million to 925 million in 2025, an increase larger than the entire current population of the United States.
Emerging markets are the major engines for mobile connections and subscriber growth. Asia Pacific generated 57% of all new mobile connections between 2008 and 2012, reaching 3.3 billion. Between 2012 and 2017, APAC’s growth will be 7% per year, adding 1.4 billion new mobile connections.
42% of the world's internet users live in Asia. This year 36.5% of worldwide B2C e-commerce sales will come from Asia-Pacific. APAC B2C e-commerce will reach 39.7% by 2016. Six out of every ten dollars spent online comes from China. 74% of consumers use smartphones for price comparison or to search product reviews.
Five Future Megatrends Affecting the Region
Asia and particularly China are undergoing substantial change. Five key megatrends will shape the region's future:
- Deteriorating diplomatic climate – The increased Chinese tension with Japan is leading to declining regional investment and a new arms race.
- Demography changes & rising labor costs in China – China faces an aging population because of its one child policy plus a five year plan where the official minimum wage is scheduled to rise 13% per year.
- From quantity to quality – A growing middle class is demanding better living conditions, less pollution, and higher quality branded products.
- Internet adoption – The online revolution in Asia is disrupting traditional business models, including retail.
- Global competition – An emerged Asia will face aggressive global competition. Faster regional adoption of social media is bringing visibility to more global options outside local production.
Back to the Future, But Not Business as Usual
Asia and particularly China are key engines for global GDP and retail growth. It is "Back to the Future" from a total economy size point of view, but it will not be business as usual.
- Globalization is driving faster technology adoption in Asia’s emerging markets. Traditional linear technology adoption models are being highly disrupted.
- Western technology and retail companies will see the emergence of aggressive Asia based competitors. Alibaba's recently filed IPO in the United States could be the largest IPO in history. Alibaba does not look like Facebook, Google, or even Amazon. Instead it operates more like GE.
Capitalizing on Asia’s growth will require managing through the emerging megatrends, adopting new business models, greater innovation, localized market approaches, and faster response to competitive pressures.
