A Mexican Middle Class Revival?Fragile to be sure, but it's there.
Most economists agree that the fundamental engine of sustained economic growth is dependant on an expanding middle class. In Mexico the middle classes have still yet to recover from the massive crash of 1982 and the "lost decade" that culminated in the Tequila meltdown of 1994. So, news of a Mexican middle class revival (from a number of sources) is welcome news indeed.
An article in the Economist points to a resurgence of the the lower middle (D+) class in Latin America, specifically in Brazil and Mexico.
" According to Alejandro Hope of GEA, a consultancy in Mexico City, the number of (D+ and lower C class) families with a monthly income of between $US6,600 and $US17,600 has increased from 5.7m in 1996 to 10.7m in 2006." An increase of 88%.
As the Economist article points out, evidence of an expansion in the Mexican lower middle class are plain to see:
> The growth in low cost home construction and mortgages
> Expanding credit (the Mexican Bank Association recently announced that 3 million new credit cards will be distributed to lower middle class consumers.
> First time use of air travel. A survey by a new low-cost Mexican airline found that 47% of its passengers had never flown before.
> Record levels of new car (sub compact) sales
Data from AC Nielsen (a leading market research company) points to growth, but at the upper end of the middle class, the C+ and Middle C groups: from 29% of the population in 2000 to 32% in 2006. Nielsen produces an excellent market overview of key trends (Cambios en el Mercado Mexicano 2007) which you down load as a pdf here
As one might suspect, these trends are far from being uniform across the country. According to AMAI, 2004 data, the C class represents 22% of the population in Monterrey, 21% in Guadalajara, falling to 15% in Mexico City and 12% in the south of the country.
What is interesting, are the ways in which middle class values and aspirations are changing. The Economist article sees new middle class as being well educated and more self-reliant than the traditional middle class, that relied on their political, professional, commercial contacts and protected markets to succeed, rather than initiative, innovation and competition which are beginning to provide the opportunities for people now entering and climbing the middle class ladder. Aspiration, status and upward mobility are still the key drivers of middle class habits and attitudes. But, perhaps, now joined with a self-reliant northern work ethic. That should be wake up call for brands wishing to connect to the new emerging middle class.
Most economists agree that the fundamental engine of sustained economic growth is dependant on an expanding middle class. In Mexico the middle classes have still yet to recover from the massive crash of 1982 and the "lost decade" that culminated in the Tequila meltdown of 1994. So, news of a Mexican middle class revival (from a number of sources) is welcome news indeed.
An article in the Economist points to a resurgence of the the lower middle (D+) class in Latin America, specifically in Brazil and Mexico.
" According to Alejandro Hope of GEA, a consultancy in Mexico City, the number of (D+ and lower C class) families with a monthly income of between $US6,600 and $US17,600 has increased from 5.7m in 1996 to 10.7m in 2006." An increase of 88%.
As the Economist article points out, evidence of an expansion in the Mexican lower middle class are plain to see:
> The growth in low cost home construction and mortgages
> Expanding credit (the Mexican Bank Association recently announced that 3 million new credit cards will be distributed to lower middle class consumers.
> First time use of air travel. A survey by a new low-cost Mexican airline found that 47% of its passengers had never flown before.
> Record levels of new car (sub compact) sales
Data from AC Nielsen (a leading market research company) points to growth, but at the upper end of the middle class, the C+ and Middle C groups: from 29% of the population in 2000 to 32% in 2006. Nielsen produces an excellent market overview of key trends (Cambios en el Mercado Mexicano 2007) which you down load as a pdf here
As one might suspect, these trends are far from being uniform across the country. According to AMAI, 2004 data, the C class represents 22% of the population in Monterrey, 21% in Guadalajara, falling to 15% in Mexico City and 12% in the south of the country.
What is interesting, are the ways in which middle class values and aspirations are changing. The Economist article sees new middle class as being well educated and more self-reliant than the traditional middle class, that relied on their political, professional, commercial contacts and protected markets to succeed, rather than initiative, innovation and competition which are beginning to provide the opportunities for people now entering and climbing the middle class ladder. Aspiration, status and upward mobility are still the key drivers of middle class habits and attitudes. But, perhaps, now joined with a self-reliant northern work ethic. That should be wake up call for brands wishing to connect to the new emerging middle class.
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