Consumer Behavior in Indian Market

1. Indian Consumer Market
A Change form Pyramid to Sparkling Diamond
-- Manisha Sethia
Nilormi Das
Rohit Trivedi

2. Introduction
• Indian consumer market
• Diversity
– Languages
– Religions
– Social status)
• Rapid economic growth
• Favorable demographics

3. Indian Consumer Market
• Favorable population composition
• Rising disposable incomes
• Triple household income – 20 years
• 12th largest consumer - 2012
• 5th largest consumer – 2025

4. Pyramid Structure
Affluent
Class
Middle Class
Economically
disadvantaged class

5. Diamond structure
Affluent class
Middle class
Economically disadvantaged class

6. Pyramid to diamond
• Increasing volume and value
• Increasing tech comfort
• Changing lifestyles
• Growth of self employed survivors
• Sophisticating middle class consumers
• Rural India metamorphosis
• Urbanization

7. Consumer mindset
• Low price to better convenience
• High value
• Better shopping experience
• High brand consciousness
• Easy customer credit

8. Trend in households

9. Aggregate Disposable Income

10. Key points
• Average annual growth rate – 7.6%
• Rising employment
• Middle class – biggest segment
• Affluent class – slow pace growth

11. Statistics
• Rs. 1000000 and more
• 0.2% to 2%
Affluent
Class • Consumption share – 7% to 20%
• Rs. 200000 to Rs. 1000000
Middle • 50 million (5%) to 53 million (41%)
Class
• 94% (1985) to 61% (2005)
Extreme • 26% (2025)
rural poverty

12. Recent Investments
• Expedia – US$ 22 billion travel market
• Mobile handset market – 6% growth
• Online retail segment – Rs. 7000 crores
(2015)
• Sony India – market spending by 25%
• GCPL – growth by 10 times

13. Implications
• Consumer spending – US$ 3.5 trillion (2020) – BCC
and CII
• Focus
– Food
– Housing
– Consumer durables
– Transport
– Communication
• Forced denial to affordable indulgence

14. Global Attention-Consumer
Behavior
• Shift in the nature of demand drawing the global attention not just
volume.
• Increasing urbanization, Increasing incomes and rising aspiration for a
better life, especially, among the lower economic strata are some of the
factors reshaping the Indian consumer market
• Result: Brand Conscious, Quality Conscious, convenience, Eager to
explore organized retail.

15. Aspiration for the Better Life
• The lower strata of the middle class segment will begin to
be able to afford and demand products and services
beyond food and clothing.
• Increasing penetration of media and infrastructure
facilities will expose the rural
• India to urbanized lifestyle and fuel the latent desire for
improved living standards

16. Value Creation
• Customer are more choosy now due to a rise in income, increased
awareness about products and proliferation of choices
• So, Product, positioning and packaging innovation will be the key for
companies to attract this new consumer
• Companies are required to be GLOCOLISED.
– E.g International fast food chains like McDonnalds

17. Innovation
• Companies will have to drive innovation differently for different
regions and consumer classes
– E.g.-Sachet and pouch Innovation has given a head start to FMCG companies for
penetrating the rural India
• The rural India too like the urban area is beginning to demonstrate a
demand for packed goods but their purchasing power limits their
capacity to buy
– E.g. When products like edible oil and shampoos were made available in small
pouches, they were well received by rural India.