It was Geographer Mark Jefferson who came out with the concept of primacy ratio in 1939. This ratio works out the relationship between the populations of the largest city in a country over the second largest one. In this case the largest one is called as primate city. Every country has this phenomenon and understanding how primacy works is vital before formulating business strategy.
Bangkok in Thailand, is arguably the number one primate city in the world with a ratio of 18X. The capital city has population of nearly 18 million while the next populous city is Chiang Mai which braces one million residents. In comparison, Malaysia records 3X for its capital Kuala Lampur with population of 7.6 million as against the next largest city of George Town’s population of 2.5 million.
Delving deep one finds that the extent of area in the two primate cities differ a lot. While Bangkok metro is of 1569 square km in extent, Kuala Lampur has a meagre total area of 243 square km.
Further analysis shows consumer expenditure as percentage of GDP is 66% in Thailand and 71% in Malaysia respectively. Household debt as a percentage of GDP is 84% in Thailand where the housing debt is around 45%. In the case of Malaysia household debt as a percentage of GDP is 88% with realty taking a large chunk at sharp 50%.
Although at first sight market potential appear almost similar in both Bangkok and Kuala Lampur a trained business strategist will immediately spot the potential for selling consumer goods and luxury to semi luxury apartments in Bangkok as most feasible compared with Kuala Lampur.
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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