There’s a $56 trillion market that could be the biggest in the history of commerce

Thursday, June 9, 2016

Occasionally, there comes along an opportunity so gigantic that it would be hard to miss.

In a round-up of some of its strongest long-term investing themes, Bank of America Merrill Lynch highlighted one such opportunity for businesses and economic growth: the explosion of the global middle class.

“In a world starved for growth, we believe that the answer lies in uplifting the 4.5 billion people at the base of the economic pyramid,” wrote BAML’s thematic investing team.

They continued: “These ‘Bottom Billions’ earn only $1-10/day, but have $5 trillion in purchasing power and $7.4 trillion in wealth.”

The note mentions that many of these “Bottom Billions” are young, mainly in urban areas, and technologically connected. Additionally, trends that support consumption and income growth such as education and access to stable housing are on the rise, which should logically lead to an increase in consumer spending for the group.

Add up all of these trends, and you have a shift into the middle class like never before.

Source: Business Insider (link opens in a new window)

Base of the Pyramid, research