Consumption by segment

I started to write something today, which I will probably come back to at some point, but I found some World Bank data that is extremely interesting.

Back in a prior life, when I was looking at Egypt, it was extremely hard to find out how much people were actually spending on goods and services. The only thing we had was a consumer survey that broke out the population by segment and how much they were spending on different things. It was commissioned by a mobile phone company, and it seemed legit, but I just wasn’t sure.

But now I found a real source: World Bank Global Consumption Database. The figures are estimates based on sample surveys. They do note that the higher segment may be based on a small sample size. But still, it

Some interesting charts:

Below, a couple of interesting points from this:

First, a caveat: this data is from 2010. GDP per capita has more than doubled in that time period. And the urban population had fallen more than 5pp by 2017 (and definitely more since then).

As you can see in the chart above on the left, 53% of consumption is food and beverages (F&B). We’ve talked about this before: poor countries spend more on essentials like F&B than rich countries. It turns out that as countries get richer, they spend more on housing.
We see this looking at the cross tabs. Rich people spend just 15% on F&B, and 58% on housing. This reverses for the lowest segment: 61% on F&B and 2% on housing.
Based on this, most of the "higher” consumption segment is spending too much on housing. It should be something like a third of income.
Consumption on education is 4%, and 3% on health. Transport is 7%, while energy is 6%. These seem low to me.
The number of people in the ‘higher’ consumption segment is basically a rounding error. There are less than 40,000 of them, and they spend something like $223m in total ($5,636 on average).
The average spending per person is low. GDP per capita was $1,318 in 2010. Consumption is less than that - just $359 for the lowest segment, $856 for the next, $2,154 for the middle, and $5,636 for the higher segment, as mentioned above.
If I were a consumer good company, I would target the “low” consumption segment. It’s almost as big in total dollar terms as the lowest, despite being less than half as big in population. Also, they are easier to target, since more than half are in urban areas
In 2020, the rural population made up 70% of the total at 60.5m people, while the urban was 26.4m. And urban people consume much more. The rural aspect probably explains more of housing spending. It’s rare that rural people would be paying for housing.
Below, you can see the difference in spending by consumption segment.

VietEcon

Consumption by segment

VietEcon