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    India's Consumption Story: A Quick Look - ABSLMF Blog

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    India's Consumption Story

    May 22, 2019
    7 mins | Views 8505
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    How far are we from being a 5 trillion dollar economy?

    India’s per capita GDP will soon cross USD 2,000 - historically this has been the trigger point for acceleration in consumer spending for several countries such as Singapore, South Korea China and Russia etc

    The changing demographics of India is pushing consumerism – namely increasing young population contributing to a growing workforce, urbanisation and a quantum increase in average household income.

    Specifically what is driving increased consumption in India today?

    • The affluent class is driving ‘premium’ segment growth rapidly – CAGR in premium bath and shower, mobile, hair care and apparel and footwear in range of 15% to 26% from 2011 to 20161.

    • It is estimated that the affluent households will contribute approx 40% of the total consumption by 2025 from the current range of 26%.

    • Lifestyle related deficiencies and illnesses driving ‘health and wellness’ segment – over 15% CAGR2.

    • Nuclear family set up and higher lifestyle standard driving ‘convenience’ and ‘recreation’ product categories – CAGR off over 15%3

    • Increased awareness driving demand for India made products

    • Lastly but certainty not the least, an increasing digital footprint in India is increasing spending and consumption across categories4:

      • India internet users to cross population of six G7 countries by 2020 – smart phones being the major contributor

      • Internet users spread across all categories – including non-metro, female and elderly population

      • Resulting in increased online spending – buyers have grown 7 times over 3 years

      • It is expected that there will be 400-450 million digitally influenced shoppers by 2025

    The cumulative effect of the above changes could lead to household (urban and rural) consumption expenditure touching 4 trillion USD by 20255

    Source:
    1IDC mobile data, Euro monitor database, BCG CCI analysis
    2National Health Family survey 4, 2015-16–average across Andhra Pradesh, Bihar, Maharashtra, Haryana; |MDPI Report on Vitamin D deficiency in India -Data for the Kashmir state only | MDPI Report on Vitamin D deficiency in India-Data for Delhi only | India Health nutrition report 2015-Stunted and wasted growth among children |Press research TOI – 'Why rich Indians are malnourished too' | India: Towards universal health coverage report, lifestyle related disease includes angina, depression & diabetes. PWC Health and wellness report.
    3Media Edelweiss 2015 report, Consumer lifestyle in India report 2015, BCG CCI analysis
    4BCG CCI Digital Influence Study 2013, 2014, 2015, 2016 analysis (N=18,000 per year), EIU, BCG CCI Analysis
    5CCI proprietary consumption model

    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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    • BazaarTrading
      On 7/15/2020
      Great Content, Super high-quality and keep it up :) http://www.bazaartrading.in/
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