Case 16: The Rising Middle Class and Changing Consumption Pattern: Its Impact on Businesses

Southeast Asia is on the cusp of a historic transformation benefitting from the emergence of an Asian century by 2050. Sustained growth in the region creates tremendous business opportunities since projections reveal an increase in middle class consumers. Malaysia is enjoying the benefits of this trickle-down effect on growth since global trends predict that the continent will host the world’s largest consumer market with spending power. This means the middle class will play a more significant role in the global demand for goods and services in the coming decades. The emergence of the middle class may present unprecedented challenges but will also mean more substantial business opportunities. Understanding the middle class consumption patterns within the vibrant Malaysian economy becomes more pertinent for marketers as this segment grows in size and importance. This case study analyzes the middle class consumption using an example in the beverage industry. Tealive is a growing lifestyle tea brand in Malaysia, expanding its outlets throughout Asia. Using Engle’s law and Bennett’s law, the case study further explains the theory behind this observed consumption behavior and concludes with some future implications for businesses.