Introduction to Consumer India

I N T R O D U C T I O N T O
CONSUMER INDIA
Sameer Mathur, PhD (http://smathur.com)

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Disclaimer: These teaching materials have been compiled from multiple, non-creditedsources for non-profit, academic use. Copyright is retained by the original content creators.
SameerMathur, Ph.D.
Assistant Professor (Marketing)
Web: www.smathur.com
Email:sameer.mathur@mcgill.ca
Twitter: @ProfessorMathur
Facebook:Click Here

The Unique Indian Context
Largest democracy; 7th largest Country
Largest employer in India: Indian Railways
A bigger movie market than America and Canada combined, India sold 3.2 billion tickets last year

Basics of Consumer India
Consumer India is large
Mostly poor, but getting less poor
Increasing number of rich people
Totally schizophrenic
=> unusual strategic complexity

Large Population (Growing at 1.6% annually)
18% of world’s population by 2030
World Population Comparison

Increase in Per Capita Income US$ 120 in 1991 to US$ 720 in 2007
Large reduction in number of people below poverty line

Per Capita Income levels comparison Top 10% of India’s population = Top 60% of Malaysia’s population = Top 80% of Brazil’s population
However, a small percentage of India’s large population is still a large number of people

Totally Schizophrenic
Diversity within India:
23 languages, 28 states, Climatic Diversity
Co-existence of Rich and Poor
Social Development Disparities
Varying norms and cultures
Varying Economies: Agricultural vsInfotech

India: Long Term Sustainable Growth
Change Confluence
Real GDP Growth
1990’s Average: 6.3% p.a and 2000’s Average: 6.2% p.a
Demographics
400 million people below 21; 20 million new babies each year
Low Political and Social Risk : Democracy
Strong institutions
Comparable to an IPO

India’s Tipping Point

Strong India getting larger
Entrepreneurial -- generates wealth through trade, finance and technology
Visible improvements in education, healthcare and housing.

Change in the shape of Income Distribution
Urban Areas:
Pyramid  Diamond  Cylinder (future)

Change in the shape of Income Distribution
Rural Areas:
Pyramid  Diamond  Distinct Diamond (future)

Step changes in consumption, comfort and aspiration
Actual Visible Consumption Increases
Cars and two wheelers, Cell phones, Televisions
Visible Consumption breeds more consumption
Step change in consumer confidence
Affordability growth greater than income growth
Drop in prices of goods and an increase in their performance
Increased comfort with borrowing
Low interest rates, Increasing confidence, EMI Repayment
Decline of the poverty effect
Consumption increase lags behind income increase
Rampant Rise in Aspiration

Sophisticating middle-class consumers
Price drops lead to increase in sales volumes and creation of markets to cater to middle-income India
Increase in high-quality budget hotels, airlines, apparel brands, pre-paid card and high-end banking facilities

Generational Transition 2005
Liberalization generation will lead to consumption-friendly ideology
The first non-socialist generation of India

Growth of self-employed strivers
Rise of the self-employed and the service economy
90% of rural households and 60% of urban households are headed by a self-employed person
Source: NCAER

Rural India’s metamorphosis
Decreased dependence on agriculture which depends on the monsoon season
Reduction in boom and bust cycles

Tech comfort of masses spreading
Increased IT awareness and IT employment opportunities across all social classes

Summary
Totally schizophrenic
=> unusual strategic complexity

Summary

Background Reading

FREE TEACHING
RESOURCES
ON MARKETING
MANAGEMENTATWWW.SMATHUR.COM
OVER 130,000 VIEWS
FROM 96DIFFERENT COUNTRIES
These presentations are part of Sameer Mathur's teaching portfolio.
They are free to view or download for non-profit, academic use.
Disclaimer: These teaching materials have been compiled from multiple, non-creditedsources for non-profit, academic use. Copyright is retained by the original content creators.
SameerMathur, Ph.D.
Assistant Professor (Marketing)
Web: www.smathur.com
Email:sameer.mathur@mcgill.ca
Twitter: @ProfessorMathur
Facebook:Click Here

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Introduction to Consumer India

by Sameer Mathur on Jul 17, 2011

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