The Indian Consumer Pyramid
Posted : October 31, 2005 at 9:07 pm [IST]
During last few days, we had been going around market. As usual, we do buy some essential things too. But I keep on watching the crowd that moves around the market and the varieties in products that the manufacturers are offering. As usual, the whole canvas of the Indian consumers before our eyes is so perplexing that it becomes difficult to be happy for the prosperous lot or be morose after seeing still some street urchins collecting the left out of the vegetables left out from earlier night weekly market by the shopkeepers as rotten and useless. It will be interesting to look at the categories of Indian consumers as whole to understand India’s potential better. It is based on a Mc Kinsey report.
Global India: An estimated 1.2 million affluent households sit atop the Indian income and consumption pyramid. This is “global India”-only a third as large as the comparable segment in China but expanding by more than 20 percent a year. Largely concentrated in the top eight cities, these households buy branded products, vacation abroad, own a number of cars and television sets, and generally behave like their counterparts in developed markets. This segment may be the target for manufacturers of high-end products such as perfume, haute-couture apparel, and luxury cars. However, it is far too small a number for most consumer goods MNCs to make India a key market.
Aspiring India: At the center of the pyramid are the real drivers of the growing consumer goods market among India’s 40 million middle-income households, which purchase more than just the basics. In this “Aspiring India,” a typical family comprises five people, lives in a city, and has an educated head of household who is an employee or a small-business owner earning $4,000 to $10,000 ($20,000 to $45,000, adjusted for PPP). The family often lives in a small apartment, has a bank account, and owns a television, a refrigerator, and a motorcycle or small car. This aspiring India is growing by about 10 percent a year, and is expected to comprise 65 million households by 2010. Its emergence is signaled, for example, by passenger car sales of $5 billion in 2004, more than twice the level of sales five years earlier. The growth in mobile telephony has been even more extraordinary: in excess of 55,000,000 Indians are subscribers, up from 300,000 in 1996. And more than 2 million are getting added every month. With the spurt in IT and IT-related services, BPO, call centers, retails, tourism, and many other fast growing sectors, the number in ‘aspiring India’ is growing very fast. The Indian as well as MNCs are basing all their strategies on this class.
Struggling India: Towards the bottom of the pyramid are the large but poor segments. “Struggling India” comprises more than 110 million households earning $1,500 to $4,000 a year-$7,500 to $20,000, adjusted for purchasing-power parity (PPP). The youngsters in this category are trying to make a break-though to get promoted to the next class, more popularly known as ‘middle class’.
Destitute India: And then a “Destitute India” comprises 40 million households that are poorer still. The unfortunates in these segments will be able to afford only basic necessities for some time to come. This is the worry of the nation. The government is devising many means to provide some employment, but the corrupt system with greedy intermediaries are siphoning off the aid allocated for this class. I wish the thrust got changed to empowerment of this class to find honest means of earning. India must go in a big way for improving its infrastructures- particularly roads, ports and electricity. India must focus on its manufacturing sectors for large-scale employment of this largely unskilled mass.
India as whole must go for transformation. The growth must touch all categories, particularly the ‘destitute India’; otherwise all our efforts will be useless.
- Indra
Category: Employment/Education |
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