“Indians are learning to consume more and more,” stated Kishore Biyani, founder and CEO of Future Group, told CNBC. Ah the sweet, sweet sounds of consumerism. All jokes aside, this sentiment is evidence of a burgeoning retail landscape, healthy wages, and is a precursor to further economic development in the South Asian nation.
Meet the New Consumer
In the aforementioned, Biyani, spoke highly of this new Indian consumer saying that, “Every new generation of Indians has consumed more than its predecessors.” In addition, he added there are a multitude of factors that has led to this new attitude towards acquiring goods.
First and foremost, one of the most exponential factors is rising affluence. Thegoes further, detailing that out of the five income categories (elite, affluent, aspirers, next billion, and strugglers) are all experiencing positive growth as Indian society evolves. In fact, it is predicted that from 2016 through 2025, the top two groups will increase from 8% to 16%. Even better, the percentage of strugglers will drop from 31% to 18%.
An Attitude of Aspiration
A change in the attitude of acquiring goods is taking shift for the average person. Nowadays, shopping is becoming social and that is changing the traditionally frugal Indian household. It is no longer considered frivolous, but an enjoyable activity that’s meant to be shared with friends and family. This makes sense as to why CNBC would report that brick and mortar is growing in the nation. They furthered that e-commerce is growing, but before they can flourish long-term, costs of doing business must drop.
One of the many factors in these shifting mindsets is the “increased exposure and large volumes of media content.” In fact, it has led to an attitude of aspiration. The BCG added that, “30% of consumers in India are willing to spend more on products that they perceive are ‘better’—a much higher percentage than is found in more developed markets such as the US, Germany, and the UK.” So, this in turn will lead to a potential market for the luxury goods sector. This is most evident in the Aspirers category that is more willing to trade up for better brand names for product categories such as clothing. For the affluent categories, BCG emphasizes that they, “are becoming comfort seekers and are willing to pay for it.”
This all illustrates Biyani’s point that Indians are learning to consume; which is promising to the economy. He ends on the note by saying,” I believe this — more consumption, more development, more job creation, more manufacturing, more GDP growth.”