A World 2 country in South America, Chile has achieved real development and is on the shortlist to transition to World 1 status. It has a high percentage of middle-income consumers, with sophisticated buying habits. Business conditions are good, and the country is ranked highly in global lists of competitiveness.
POPULATION BY AGE GROUP: Chile is making the transition from a relatively young society to a middle-aged one as it reaches a new level of development.
- At about three-and-a-half million, the number of children will be stable, and will decline as a percentage of the population.
- The working-age population will show only slight growth, and also shrink as a share of the population.
- The fast-growing segment will be Chilean seniors.
- Chile’s median age is rising relatively quickly, and is at 32.1 in 2013.
- Five years younger than Americans on average in 2013, Chileans will have made up the gap by 2030, when—like Americans—their median age is projected to be 39.
- This aging could exacerbate the country’s already severe obesity problem: 23% of Chileans are obese, and Chile’s childhood obesity rate is the sixth highest in the world.
URBAN POPULATION + POPULATION GROWTH RATE:
- Like many Latin American countries, Chile is highly urbanized, with 90% of the population living in cities. This percentage will increase only slightly in the next few decades, to a forecast 92% by 2030.
- Chile’s population is growing only slowly, somewhat less than one percent per year. This is expected to slow even further in the next few decades, dropping to 0.41% in the 2030s, when Chile’s population growth rate may be even lower than the US.
Birthrates dropped from 2.6 children per woman in 1990 to 1.8 in 2011, below the replacement rate of 2.1. This low rate has alarmed the government enough that it is offering financial incentives for people to have more children.
3 BUSINESS IMPLICATIONS
- Chile is a small but solid market, with 11 million consumers (65%) classified as middle class, and more joining their ranks. With the projected increases in the size of the middle class and growth in GDP per capita, as well as the country’s relatively high levels of consumer sophistication, it should be an attractive outpost for consumer-facing firms in coming decades.
- As incomes rise, serving Chilean demand in the future will be about meeting more advanced consumer needs rather than feeding an expanding market for basic products.
- Despiterisingprosperity,Chile—withitsrelativelyhigh inequality—displays some of the typical emerging-market pattern of a market with numerous lower-income consumers and a smaller segment that can live fully World 1 lifestyles.