In a recently released report on the Indian consumer by Goldman Sachs, titled ‘India Consumer Close-Up’ analysts Joshu Lu, Anita Yiu and Aditya Soman note:
- The “Urban Mass” – a cohort of 130 million people today – both educated and blue-collar and migrant workers that will expand “both in size and income level, will be the key driver of India’s consumption .”
- Within the youth segment, the 440 million millennials, and the 390 million Gen Z (those born after year 2000) will push up consumption levels in the next 10 years in India.
“The sheer size of India’s youth combined with improved education paves the way for sustained growth in purchasing power and makes India’s consumer story one of the world’s most compelling for the next 20 years. The nation’s challenge is to create enough jobs to unleash the productivity of India’s youth,” the analysts said.
Here are seven insights contained in the report:
- There will be an increased awareness of brands, but only those that offer incremental value and quality will see growth.
- Efficiency, rather than vanity will be a significant factor in buying decisions.
- Eating out will increase.
- Connectivity and e-commerce will boom.
- The number of weddings will see a surge over the next five years, given India’s demographics (births peaked 23 yrs ago).
- TV as a form of entertainment will be replaced by mobiles, benefiting content providers and mobile gaming companies.
- Best categories positioned for profit pool expansion are packaged snacks, baby products, premium personal care, scooters, SUVs and jewelry; but restaurants may grow faster than them all.
“With a young, tech-savvy population, improved education and rapid growth, India is creating a consumer market deeply tied into mobility and connectivity,” quotes Forbes from the report.
