paradigm shift in Indian market
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The Indian consumer is rapidly transforming from traditional to more modernized and lifestyle-oriented. Consumers now value convenience over small savings and prefer to minimize time spent on tasks like grocery shopping and eating out. When buying appliances like TVs, Indians consider non-functional factors beyond just price. The categories receiving most discretionary spending have changed from 1991 to 2011, with entertainment, eating out, and services accounting for a larger share of consumer budgets. Private consumption in India makes up 64% of GDP, higher than most other major economies.
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paradigm shift in Indian market
- 1. By: RISHABH DOGRA Rishabh
- 2. Rishabh
- 7. Rishabh
- 8. Buying a TV set- Factors Rishabh
- 10. . Private consumption currently accounts for 64% of GDP -- higher than in Europe (58%), Japan (55%), and especially China (42%). Rishabh
- 11. Rishabh
Editor's Notes
- The world’s economic center of gravity is shifting-away from the established, wealthy economies of Europe, Japan, and North America towards the Asia Pacific India’s ascendance as an fastest growing economic power to reckon with, has forced the world to unravel the mystery called India. Over the last 15 years Indian market has undergoes a paradigm shift much faster than many predicted.
- India’s consumer market till now was broadly defined as a pyramid; a very small affluent class with an appetite for luxury and high-end goods and services at the top, a middles-class at the center and a huge economically disadvantaged class at the bottom. This pyramid structure of the Indian market is slowly collapsing and being replaced by a diamond – a relatively large affluent class at the top, a huge middle class at the center and a small economically disadvantaged class at the lower end. The diamond represents increasing volume and value across all classes of Indian consumer market.
- India has sometimes been called a nation of shops Highest per capita outlets in the world - 11.5 outlets per 1000 population As much as 96 per cent of the 12 million-plus outlets are smaller than 500 square feet in area. The organized sector accounts for just 2 per cent. Unorganized sector includes low-cost retailing such as the local kirana shops, owner-manned general stores, paan/beedi shops, convenience stores, handcart and pavement vendors Since the early 1990s the market in India has been characterized by a major shift from traditional shops to modern formats that include department stores, hypermarkets, supermarkets and specialty stores across a wide range of categories. Sales from the organized stores are to expand at growth rates ranging from 24% to 49% per year during 2003-2010, according to a latest report by Euromonitor International
- With the availability of low-interest finance schemes, price is increasingly becoming a smaller factor in a purchase decision in a whole range of consumer durables also. Consumers jump steps as they enter: today the line between entry-level and upgraded products is disappearing. The newer generation is willing to pay more if she is convinced she is getting better value for the higher price. Upgrade is part of life. Today the average life of a mobile is 12 months, that of a TV three years; cars four to five years and soon even homes will be changed more frequently. Clearly durability is no longer the most desirable value. "One household, multiple products“: two cars is no longer a luxury but a practical necessity for working couples; two TVs in the house is recognition of the fact that different family members have different interests
- Early nineties One, availability; two, price; and, three, picture quality Mid-nineties, the efficacy of an exchange scheme and the number of channels a company offered Today sophistication -one of the fastest growing segments of the market is high-end flat TVs
- Since 1990 (after deregulation) the number of sectors open to foreign participants has expanded steadily, and India’s working-class population has increased and so is the demand of the services
- India's transition to a 7% growth path in recent years is very much an outgrowth of the emerging consumerism of one of the world's youngest populations