Megatrends: Quantifying Digital Living

The pandemic years boosted many aspects of consumer digital living. From online shopping to digital entertainment, many of these habits have become engrained in our daily lives. Digital Living is among the largest megatrends driving consumer behaviour, second behind only Convenience. Consumer spending per capita on products and services related to digital living grew at a 20% CAGR during 2017-2022. To quantify the impact of Digital Living and other megatrends on consumers, Euromonitor International has created a quantification model to assess the impact of these long-term trends.

What are the biggest markets for Digital Living?

The megatrends model provides a comprehensive framework to map the market potential for megatrends, including Digital Living, across 40 countries. In particular, the model helps to identify white space opportunities in these countries, pinpointing where the shifts towards this digital-first lifestyle are gaining traction.

The US, South Korea, the UK, Hong Kong, and the United Arab Emirates are the five largest markets for Digital Living, based on the megatrend’s consumer spending per capita in 2022. This is not surprising as these markets are among the wealthiest and most digitally developed.By contrast, the smallest markets for this megatrend in terms of consumer spending per capita in 2022 are all emerging markets. In particular, Nigeria, India, Egypt, the Philippines and Morocco are among the smallest for this megatrend in the 40 tracked countries. While there is significant attention placed on these consumer markets due to their long-term potential, the digital spend in each of them remains just a fraction of what can be seen in the world’s most sophisticated digital markets.

How is the Digital Living megatrend evolving?

Many of the habits consumers formed during the pandemic have persisted till today, in varying degrees. Consumers continue to find the experience of working, playing and shopping digitally extremely convenient. While activity levels have come down from pandemic highs, usage levels are still higher than pre-pandemic, indicating a new normal.

The model estimates that the Digital Living megatrend enjoyed a 20% CAGR in consumer spend per capita over 2017-2022. The only megatrend that grew more was Convenience, which grew at a 24% CAGR over the same period. By contrast, the Experience More megatrend experienced a significant decline over the period due to changing consumer habits and the impact of high inflation.

Moving forward, over the period 2022-2027, the Digital Living megatrend is expected to post the second fastest CAGR, of 11%, behind only the Convenience megatrend

^{Source: Euromonitor International}

Where are the growth opportunities for Digital Living?

Unsurprisingly, after five years of high growth, the propensity to spend on digital living in Asia Pacific for the period 2022-2027 is expected to moderate, mainly due to the maturity of the Chinese market. Chinese consumers are among the most tech-savvy in the world, with a large population of millennials and Gen Z driving trends such as social commerce and livestreaming. The region has been a dominant force behind digital developments in industries ranging from payments to retail. As a result, it is often labelled as the world’s innovation hub.

As digital innovation spreads from more developed markets, growth in the next five years is expected to come from regions such as Middle East and Africa and Eastern Europe

^{Source: Euromonitor International}

The model also points to predominantly emerging markets as those that will drive opportunities in Digital Living. In particular, the model forecasts that the greatest opportunity for this megatrend in 2022-2027 will be in the United Arab Emirates, followed by Indonesia, Nigeria, India and Italy.

High growth in digital living spending will be a boost to many industries. We expect industries such as e-commerce, electronics, appliances, and consumer finance to be the greatest beneficiaries of this trend. Companies will need to increase their investments in these countries as growth in digital living is typically exponential at the growth phase with high consumer adoption.

Read Megatrends: Digital Living – A Framework for the Future for the complete report on Digital Living.

^{Editor’s note: This article was published in October 2021 and has been updated.}