With over 1.2 billion people, of whom 572 million are under the age of 24, India is currently the country with the biggest youth population in the world.
Rising income levels and the change in consumer choices are creating a greater demand for white goods, cars, mobile phones, leisure items, travel shopping malls and Western brands. India matters, with millions of affluent brand conscious customers and a growing middle-class presenting significant opportunities for UK businesses.
According to the OECD, India’s middle class (defined as those with per-capita incomes of USD 10-100 a day) will expand from 5-10% of the population today to 90% in 2039. In other words, India will have added 1bn people – almost its entire current population – to the middle class. A sizeable proportion of this expanding middle class hail from small town India and are emerging as a force to reckon with. They have ever deeper pockets and a real desire to spend it on luxury goods. According to experts, the nouveau riche in smaller towns constitute over 50 per cent of luxury buyers in India.
Rising incomes and a greater exposure to Western lifestyles will also create inflexion points for various products and services, as previously unattainable purchases will become necessities. Both of these developments are likely to unleash a substantial shift in consumer spending and consumption patterns over the next two decades. According to the Boston Consulting Group India’s largest spending categories today – food, housing and consumer durables, transportation and communication will continue to remain at the top in 2020. Expenditures on personal care, loan repayments, holidays and social events (weddings and parties) will grow most swiftly through 2020. Expenditure on education and leisure will be the second fastest growing, and money spent on health and fashion is expected to increase by almost 4 times by 2020.
By 2025, India is expected to become the world’s fifth largest economy in terms of consumption, an improvement from its 12th position in 2010.