Indian consumer segment is broadly segregated into urban and rural markets, and is attracting marketers from across the world. The sector comprises of a huge middle class, relatively large affluent class and a small economically disadvantaged class, with spending anticipated to more than double by 2025.
India hit ten-year high and stood first among the 63 nations surveyed in the global consumer confidence index with a score of 136 points for the quarter ending December 2016.
Global corporations view India as one of the key markets from where future growth is likely to emerge. The growth in India’s consumer market would be primarily driven by a favourable population composition and increasing disposable incomes.
India’s robust economic growth and rising household incomes are expected to increase consumer spending to US$ 4 trillion by 2025#. The maximum consumer spending is likely to occur in food, housing, consumer durables, and transport and communication sectors.
The growing purchasing power and rising influence of the social media have enabled Indian consumers to splurge on good things.
By 2020, the electronics market in India is expected to increase to US$ 100 billion from US$ 28 billion in FY17. The production is expected to reach to US$ 104 billion by 2020. By 2018, the television industry in India is expected to grow to US$ 11.78 billion from US$ 9.23 billion in 2016, registering a growth of 12.97 per cent.
India has become the second largest smartphone market in the world as shipments increased 23 per cent year-on-year in Q3 2017, to reach more than 40 million units, according to a report by Canalys.
According to the data released by the Department of Industrial Policy and Promotion (DIPP), the electronics sector attracted foreign direct investment (FDI) worth US$ 1.80 billion between April 2000 and September 2017.
Following are some recent investments and developments in the Indian consumer market sector.
By 2025, India would rise from the 12th to the 5th largest position in the consumer durables market in the world. The consumer durables market in India is expected to reach US$ 20.6 billion by 2020. Demand growth is likely to accelerate with rising disposable incomes and easy access to credit. Increasing electrification of rural areas and wide usability of online sales would also aid growth in demand.
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References: Media reports, press releases, Press Information Bureau (PIB), Union Budget 2017-18, Boston Consulting Group, International Data Corporation.
Notes: # - According to a report by Boston Consulting Group (BCG)