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Consumer Markets

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Consumer Markets

February, 2012

Consumer Markets in India: Brief Overview

According to Manu Anand, CEO, PepsiCo India, India's consumer pyramid is shaping into a diamond. The Indian consumer markets are majorly driven by increase in disposable incomes, apart from other factors like change in demographics, entry of foreign players, liberalisation, Government efforts et al. Asia's third largest economy currently accounts for 2.7 per cent of the global consumption.

Indian consumer markets are experiencing a flurry of investments as more and more foreign majors are getting attracted towards a set-up which is considered to be economically safe and with huge potential. The Indian consumer markets- majorly comprising retail, fast moving consumer goods (FMCG), luxury brands and e-commerce- have witnessed lot of developments in the recent past. Some of them are discussed hereafter.

Investments through FDI, M&A and PE in India

Cumulative FDI inflows in single-brand retail trading during April 2000 to November 2011 stood at US$ 44.45 million, according to the Department of Industrial Policy and Promotion (DIPP).

Retail in India

Business Monitor International (BMI) has recently released its India retail report for first quarter of 2012 which projects that total retail sales will grow from US$ 422.09 billion in 2011 to US$ 825.46 billion by 2015. Explosion of organised retail in a big way is one of the major factors behind such a positive forecast. Certain developments in this space are given below:

  • Kama Schachter, the diamond jewellery manufacturer and exporter, has plans to venture into India's retail market. The company would infuse a capital of Rs 50-70 crore (US$ 10.15-US$ 14.23 million) for building brand, marketing and for opening retail store in 2012. The jeweller plans to open around 20 stores in India, starting with Mumbai and Delhi, within a span of five years.
  • Auchan, the second largest French grocer after Carrefour, is holding discussions with the Landmark Group to foray into Indian business space. Landmark Group currently runs the Dutch retail chain Spar in India.


Emergence of internet retailing (e-tailing) and e-commerce as a completely new space is driving the growth of number of online shoppers. As a result, the internet retailing companies are getting attracted towards Indian markets which are poised to grow leaps-and-bounds in the years to come. There are about 17 million online shoppers in India and the number is projected to grow over three times in the years to come.

  • Seattle-based world's largest internet retailer has recently launched its website with a view to harness burgeoning online shopping market in India which is expected to triple in size by 2015. has partnered with several Indian online and offline retailers like HomeShop18, Hidesign, Dabur Uveda, the Bombay Store and others. It has also formed alliances with online players like Snapdeal, Univercell, Saholic (a Spice Group firm) and
  • India's largest and most-funded e-commerce company Flipkart Online Services Pvt. Ltd has acquired, the country's second-largest online electronics retailer, for an undisclosed amount. The move reflects Flipkart's strategy of becoming a major player through acquisitions and eventually grabbing a substantial pie of the ever- increasing Indian online retailing space.