The new Indian consumers trend at WEF

10 Mega Trends appeared:

How India Will Consume in 2030

India to witness a 4x growth in consumer spends!

According to Nikhil Prasad Ojha and Zara Ingilizian, “The new Indian consumers will be richer and more willing to spend, and unlike their predecessors, will have very specific preferences.”

Over the next decade, consumption in fast-growth consumer markets such as China, India and Southeast Asia will be reshaped by the Fourth Industrial Revolution and more than one billion first-time consumers. The Future of Consumption in Fast-Growth Consumer Markets, a project in collaboration with Bain & Company, focuses on the emerging markets that comprise more than 40% of the world’s population. After studying China in 2017, for 2018 it turned its attention to India.

India is one of the fastest-growing economies in the world. By 2030, it is on course to witness a 4x growth in consumer spend. It will remain one of the youngest nations on the planet and will be home to more than one billion internet users. The new Indian consumer will be richer and more willing to spend, and unlike her predecessors, she will have very specific preferences.

The following 10 mega trends for India in 2030 can help businesses and policy leaders envision the India of the future. The trends draw upon the research and consumer survey conducted by the World Economic Forum and Bain for the Insight Report on the “Future of Consumption in Fast-Growth Consumer Markets: India”.

1. The Indian middle class will truly come into its own:

By 2030, India will move from being an economy led by the bottom of the pyramid, to one led by the middle class. Nearly 80% of households in 2030 will be middle-income, up from about 50% today. The middle class will drive 75% of consumer spending in 2030.

2. Upward income mobility will drive growth across all consumption categories:

As 140 million households move into the middle class and another 20 million move into the high-income bracket, they will spend 2-2.5x more on essential categories and 3-4x more on services. Upper-middle-income and high-income entrants will drive a 15-20% increase in the ownership of durables.

3. Half the incremental rupees will go into buying more:

Half the incremental consumer spends by 2030 will be simply to buy more of the products and services being consumed today. Affordable options will continue to be important. The remaining half will be split nearly equally on upgrading to premium offerings and including new variants in existing routines, looking good and staying connected

4. Aspirations are fast converging across urban and rural India:

The internet and smartphones have significantly bridged the information divide between consumers in urban and rural India. Beyond the top 40 cities, developed rural and small urban towns already have a very similar income profile.  Future efforts to improve physical and digital connectivity, and the use of innovative distribution channels, will enhance well-being and unlock the true consumption potential of rural India.

5. Millennial and Generation Z preferences will significantly shape the market:

These consumers will be able and willing to spend more but will also be more discerning. In 2030, 77% of Indians will be born in the late 1980s and onwards. These youngest Indians already exhibit the greatest willingness to increase spending over the next 10 years, but they are also highly discerning about what they consider "best in class" offerings in every consumption category.

6. Digitally influenced consumption will become the norm:

"Connectedness" will drive a significant difference in preferences, even at the same income level. As many as 50-70% of the most digitally connected consumers are as of today, across income levels, already use digital platforms for product discovery and pre-purchase research. By 2030, more than 40% of all purchases will be highly digitally influenced, up from 20-22% today.

7. India’s eternal hunt for value will aid the growth of e-commerce:

Indian consumers will be willing to adopt value-for-money brands that have "just right" features and prices. India’s new consumers have aspirations to consume more, but they are dispersed across tens of thousands of urban and rural towns. Asset-light e-commerce models, supported by offline partnerships and demand-aggregators, will help brands test out and reach these new markets in a cost-efficient manner. Businesses will also have an opportunity to unlock spend on new category extensions.

8. Technology-enabled new business models:

Digital platforms for renting and sharing will speak to this usership mindset, as well as to the tech-savviness of future consumers. Subscription models, much like today’s Bombay Shaving Club, Amazon India Grocery Pantry and Fab Bag, will serve the value-conscious Indian keen to access new brands and products for a small recurring spend.

9. Business, policy and civic society leaders will collectively drive an inclusive:

India presents a host of exciting business opportunities in the next decade. At the same time, the next phase of India’s growth story offers stakeholders a chance to shape a path of responsible and equitable growth, from which other fast-growing markets can learn.

Building on the momentum of collaborative efforts such as Skill India and Eat Right India, public-private-civic-society partnerships can help tackle the three key societal challenges facing India today.

10. Firms will thrive by innovating for India:

Companies will go a step beyond replicating Western models at low costs; they will localize and personalize business models and product/service offerings according to the unique preferences and constraints of their Indian consumer.

In the past, companies that have sustained growth in India have been ones with an insurgent mission, frontline obsession and strong owner’s mindset. This "founder’s mentality" will be a critical capability for the future, for small and established businesses alike. Entrepreneurial and agile organizations will be best positioned to capture the full potential of consumption opportunities in the vibrant and diverse market that is India.

India in 2030 will be a playground for growth and innovation for consumer businesses—both Indian and global, established and emerging. The transformations in the Indian consumer’s income, propensity for consumption, awareness and tech-savviness will create massive opportunities.

India in 2030 will also be a platform for stakeholders to shape a path of inclusive and responsible growth, for fast-growing markets across the world to follow.

This blog draws from the Insight Report "Future of Consumption in Fast Growth Consumer Markets: India", published in January 2019 by the World Economic Forum in collaboration with Bain & Company. Nikhil Prasad Ojha is partner and head of Strategy practice, Bain & Company, India. Zara Ingilizian is head of Future of Consumption, member of the Executive Committee, World Economic Forum.