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Indian Consumer Market

November, 2012

Indian Consumer Markets: Brief Overview

India’s flourishing consumer markets are largely being driven by factors like favourable demographics, increasing levels of disposable income, positive business environment and supportive government policies. Given the vast size and volume of the Indian economy, the consumer markets include numerous segments such as retail, luxury segment, fast moving consumer goods (FMCG) and consumer durables. A survey conducted in 58 markets covering 29,000 consumers by Nielsen has found that India is the most positive country in terms of consumer confidence at 92 points for the third quarter of 2012.

Global researchers have been releasing many forecasts about Indian consumer market segments. For instance, an industry body predicts that the size of India's retail industry would grow by more than 100 per cent to become US$ 1.3 trillion by 2020 from the current size for US$ 500 billion. Similarly, the Indian direct selling industry is anticipated to touch Rs 7,120 crore (US$ 1.29 billion) by the end of 2012-13, according to a study by Ernst and Young.

Such estimates have placed India as a strategic country for the world economy’s future growth and development. Foreign players are betting high on the country’s prospects and are vying to tap Indian consumers in every possible way.

The Internet Revolution

Internet and digitisation in India have transformed every industry segment in a big way. There are about 137 million internet users in India according to iCube-IMRB survey for July 2012. The financial sector (consisting of banking, financial services and insurance) spends around Rs 1,500 crore (US$ 272.11 million) of which less than 10 per cent are spent for digital advertising. Another significant finding given by the study showed that one out of every 10 financial queries comes from a mobile phone. In terms of percentage growth for search queries coming from mobile phones (banking queries grew 85 per cent year-on-year (y-o-y), investment related queries grew 105 per cent y-o-y and insurance queries grew 75 per cent y-o-y). Investment-related queries in the mobile space are also the biggest category by search volume in the finance vertical.

Television and mobile devices are also being used increasingly for watching online content, according to a latest survey by market researcher NPD DisplaySearch. The study indicates that though consumers view online content majorly from desktop computers and laptops, mobile devices such as tablets and smart-phones, and television sets are becoming popular as well.