The trend of consumerism was more widely observed after the Industrial Revolution when bulk production became easier, could be done at a lower cost, and finished products could be delivered to the consumer without difficulty.
Merriam-Webster defines consumerism as “the theory that an increasing consumption of goods is economically desirable” or “a preoccupation with and an inclination toward the buying of consumer goods”. Thus, consumerism, when spoken about in the mainstream sense, fundamentally means that increasing utilization of goods and services is the desirable goal and that a person’s happiness depends entirely on material possessions.
When the word first came into use, it was meant to have a positive connotation as to how a capitalist market helps the common man increase their standards of living. But now, in the popular sense, consumerism talks about the increasing dependence of people living in a industrial society on material goods and possessions and goes against the traditional minimalist way of life.
As consumers spend more and more, it is presumed that consumers benefit from their spending, also benefitting an industry. For example, let’s talk about the sale of laptops increasing during the ongoing pandemic. If their sales increases, the dealer profits from it. But it is not just the dealer who profits. The companies that make the motherboard, the speakers, the processor, etc. also directly profit from the sales. And due to this, increasing consumption is seen as a boon for the economy. But at what cost?
Approximately 1.7 billion people worldwide are now classified into the "consumer class"— the group of people characterized by diets of highly processed food, desire for bigger houses, more and bigger cars, higher levels of debt, and lifestyles devoted to the accumulation of non-essential goods.
Although consumerism is most frequently used in context to the western world, it is a part of most economic systems of the world. The trend of consumerism was more widely observed after the Industrial Revolution when bulk production became easier, could be done at a lower cost, and finished products could be delivered to the consumer without difficulty.
As widespread as it is in the current scenario, consumerism has both its pros and cons. Let us talk about a few.
Advantages of consumerism:
i. The consumer can choose their way of life: people can choose their own lifestyle, what products they need/want, what is necessary and what other luxuries can be afforded.
ii. The fancies one can avail themselves off: the consumer can decide what worldly material one wants to relish (food, drinks, shopping, etc.)
iii. It is an incentive for people to work harder to improve their social standing with higher earnings.
iv. It leads to economic advantages for the middle, upper-middle class and higher classes.
Disadvantages of consumerism:
i. Forced obsolescence: in a capitalist society, the consumer is never satisfied. No sooner one product is released than a newer and ‘better’ version of it is available in the market.
ii. A consumerist society is more susceptible to harming the environment: an increased demand of goods steers us towards the road of more pollution, plastic waste, deforestation and hence, leads to climate change.
iii. The upper class usually benefit in a consumerist society at the expense of the lower class.
iv. Consumerism has often been criticized on psychological grounds. It leads to social anxiety amongst the middle and lower classes where they need to ‘keep up’ with the higher class. It also leads to multiple physical health issues. According to the United Nations, 2 million people worldwide are either overweight or obese and this is only seen due to the high consumption of convenience foods.
v. More people are running up debts: people work longer hours to pay for their highly luxurious and unnecessary lifestyles, hence spending less and less time with their families and communities.
Now, as widespread as consumerism is, it does differ from place to place. For example, East Asian countries are seen as more reluctant spenders than their western counterparts, but even so, Asian consumers are now increasingly impacting the global economy. With a contrasting trends between one of the top two continents that have kept their promise of rapid economic growth- North America and Asia, we shall derive a better insight into the concept of consumer behaviour in discussion.
Let’s take Starbucks as a specimen. In 2018, its then Chief Financial Officer, Scott Maw, said that Starbucks had “two significant profit engines” – North America and Asia. In China, a Starbucks shop opens every 15 hours. China is so important to Starbucks that it brings certain offerings to it ahead of New York. In December 2017, Starbucks opened a 30, 000 square foot Reserve Roastery in Shanghai. Only its hometown of Seattle has something similar. This only shows how the focus of companies is shifting from just North American middle-class households to the Asian public too.
In 2017, North America had a GDP growth of 2.3% whereas Asia had a GDP growth of 5.7%. What is also notable that North America has an unemployment rate of 10% while on the contrary Asia has an unemployment rate of 3.8% only.
In previous years, when Asia was relatively poor, most products manufactured there got shipped to North America. Though this export is still a part of life, Asian countries are also purchasing more and more from each other.
A major difference between the American consumer and the Asian consumer is that the American would more readily pay extra for a faster delivery, whereas an Asian would not.
Another major contrast is the number of credit card holders. According to a U. S. Census Bureau estimation of 253 million adults in the U. S., over 191 million Americans are credit card holders. Asian credit card holders are far, far less in number.
2018, United States had a cosmetic consumption value of 89.71 billion dollars and China, in the second place, consumed only 58.26 billion dollars of beauty products.
Netflix has 72.9 million subscribers across the United States and Canada, which is the most of any region in the world, and 22.49 million subscribers in the Asia Pacific region, which is the least.
Now of course, these are just a very few of the numerous differences between the consumer habits of Asia and North America and while both regions have their own form of consumerism, the patterns widely differ in both. Both have their pros and cons. Maybe these differences are seen due to traditional beliefs or maybe because of a difference in conscience. Whatever the reasons may be, these differences are deep rooted, and if an attempt is made to eliminate them, it would not prove to be an easy task.
Written by: Riddhi Rohatgi