According to the World Economic Forum‘s (WEF), report ‘Future of Consumption in Fast-Growth Consumer Market: India‘ by 2030, India will see a tremendous jump in consumer spending driven by increased incomes, a billion diverse internet users, and a very young population.
With an annual GDP growth rate of 7.5 per cent, India is currently the world’s sixth-largest economy, the report noted. By 2030, domestic private consumption, which accounts for 60 percent of the country’s GDP, is expected to develop into a $6-trillion growth opportunity. “If realized, this would make India’s consumer market the third-largest in the world, behind the U.S. and China,” says the report.
- Growth in income will transform India from a bottom of the pyramid economy to a middle class-led one.
- The consumption growth will be driven by rich and densely populated cities and the thousands of developed rural towns.
- India’s top 40 cities will form a $1.5 trillion opportunities by 2030 and thousands of small urban towns will also drive an equally large spend in aggregate.
- Additionally, there will be an opportunity to unlock nearly $1.2 trillion of spending in developed rural areas by improving infrastructure and providing access to organized and online retail.
The report builds on in-depth consumer surveys conducted across 5,100 households in 30 cities and towns in India and draws from over 40 in-depth interviews with leaders in both the state-owned and private sectors. Commenting on the report, Zara Ingilizian, Head of Consumer Industries and a Member of the Executive Committee, World Economic Forum, said, “As India continues its path as one of the world’s most dynamic consumption environments, private and public-sector (state-owned entities) leaders will have to take shared accountability to ensure such consumption is inclusive and responsible.”
The new Indian consumer will be more affluent, and more willing to spend but will have more evolved preferences and aspirations than consumers of the past. The ‘Urban vs. Rural’ paradigm of the past may not hold as firm in future. To unlock the potential of these opportunities and to ensure equitable growth, the report identified three critical societal challenges that need to be addressed: skills development and employment for the future workforce, socio-economic inclusion of rural India, and a healthy and sustainable future.
