Indicus Consumer Handbook - Asset Penetration and Housing Conditions

CHAPTER THREE Asset Penetration and Housing Conditions DURABLE AND GOODS PENETRATION Most homes in India have a cot or a bed, but a large proportion of those do not have mattresses. Though data is unavailable, it is likely that despite the presence of cots/beds in most Indian households, the large majority of Indians sleep on the floor as average home area is small and there is not that much space for furniture. Apart from cots, timepieces (watches and clocks) are the most prevalent, followed by mattresses, chairs and electric fans. This is followed by televisions, where almost half of all households in the country have access to either a colour or black and white TV. With improvements in access to electricity, it is likely that the penetration of fans will go up further. Refrigerator is the next most important white good that has great potential demand. However, unlike the fan, the refrigerator requires 24-by-7 electricity for it to be of any use. Given the poor supply of electricity in greater part of India (in most rural areas it continues to be limited to a few hours a day), the utility of refrigerators is quite doubtful. The large majority of households still do not have a mobile phone, but at the current rate of expansion, it is only a matter of time, before penetration of mobiles would be more or less universal. Among all durables and various household goods, rural penetration rates are lower than those in urban areas. This is not only due to lower aggregate incomes in rural India; a large number of manufacturers of such items have not been able to penetrate into the hinterlands as much as they would like to. The cost of selling and servicing in far flung areas are quite high; in urban areas, however, the concentration of demand makes it easier to spread such costs over larger sales. The bicycle continues to be the preferred means of transport for Indians; but two wheelers have been catching up rapidly in the last couple of decades. With increased rural incomes, improved rural roads (the Pradhan Mantri Gram Sadak Yojana seeks to con- nect all the 600,000 odd villages in the country with surfaced roads), greater spread of petrol pumps; it is only a matter of time when the majority of Indian households would have graduated to two wheelers. Barely 3 per cent of Indian households have access Ch-03_Bharati.p65 41 1/6/2009, 1:08 PM

to a car with most being in urban areas. Very low cost cars are about to make an entry into rural and urban markets in the near future; however, given their larger fuel consumption, greater price and maintenance costs; it will be some time before they will be able to compete with the two wheelers. Small-sized households with one or two rooms and with five to six persons living in them are highly space constrained entities. This keeps a check on the type and scale at which the poor and the lower middle classes use various consumer goods and durables. Hence with improved incomes not only will households need to change housing conditions, but housing itself. HOUSING CONDITIONS Housing conditions are at the very core of understanding consum- ers’ economic characteristics and their decision-making. In poor country, such as India, the bulk of homes have a single dwelling room, but there is a significant and growing middle class and the affluent, and this is reflected in a pyramidical distribution of households by number of rooms. Low standard of living is also reflected in the fact that the majority of households have kuccha (tiles or grass/bamboo, etc.) roof. Concrete roofs are rapidly growing in importance and will soon overtake all other. The floor however is another story, mud flooring rules – it has significant cost advantages and is not too difficult to maintain as well. However, as more and more people put up concrete walls and roofs, having tiled or stone flooring will be a natural progression. Energy is required by households for both lighting and cooking. Electricity has finally taken over as the most accessed source for lighting by rich and poor households alike. Kerosene is a distant second. Non conventional sources such as solar energy are insignificant and given the costs as well as maintenance issues, are not likely to become a significant source in the near future. Greater access to electricity for lighting has, however, not been matched by greater access to either electricity or LPG (liquid petroleum gas) for cooking. Firewood is by far the most important source of cooking for Indian households in rural areas followed by dung cakes and LPG a distant third. But it is only the upper economic segments where LPG has decent enough penetration rates. LPG is the most important source of cooking energy in urban areas and its importance will only grow. But it is not only economic criteria or accessibility that deter- mines usage of particular sources for cooking. A large number of households cook in the open, flame-based cooking such as in the 42 THE INDICUS CONSUMER HANDBOOK Ch-03_Bharati.p65 42 1/6/2009, 1:08 PM

3 case of firewood; it is relatively more difficult in such areas, and it is here that dung has an advantage. It is a slow burning fuel that is difficult for the winds to blow out. Given that LPG is also charac- terized by flame-based cooking, it is unlikely that the objective of universal usage of LPG can ever be met as long as all households do not have separate covered kitchens/cooking. Few households in India have separate bathrooms, and only a minority access water from taps. Closed drainage is also a rarity. Spread and quality of public infrastructure greatly impacts living conditions. Few cities in India have a sewage system (and most of those drain into our rivers) and therefore households have to de- pend upon septic tanks. However, septic tanks require space which is difficult for the lower income homeowners to obtain in urban areas. Some home owners, therefore, have to resort to dig- ging pits (but those are no permanent solutions), still others have to resort to open drains, again not an attractive option. But with increasing incomes, greater electricity, road, and water and sanitation infrastructure investments, we will see a great churn in such living conditions in coming years. This in turn will impact household purchase of various goods and services as well. Exhibit 3.1 Per cent distribution of households by size of dwelling units occupied Size of dwelling 1991 2001 units occupied Total Rural Urban Total Rural Urban No Exclusive Room – – – 3.1 3.4 2.3 One Room 40.5 40.8 39.6 38.5 39.8 35.1 Two Rooms 30.6 30.7 30.4 30.0 30.2 29.5 Three Rooms 13.9 13.5 14.8 14.4 13.3 17.1 Four Rooms 7.1 6.9 7.8 7.5 7.0 8.7 Five Rooms 3.2 3.2 3.1 2.9 2.8 3.3 Six or More Rooms 3.9 3.9 3.8 3.7 3.6 4.0 Unspecified number 0.9 1.0 0.5 – – – of rooms Total 100.1 100.0 100.0 100.1 100.1 100.0 Source: Office of the Registrar General of India Note: Data for the year 1991 exclude Jammu & Kashmir. Besides, these exclude institutional population ASSET PENETRATION AND HOUSING CONDITIONS 43 Ch-03_Bharati.p65 43 1/6/2009, 1:08 PM

Exhibit 3.2 Households across dwelling rooms 80000 Number of households Number of households 70000 60000 50000 ('000s) 40000 30000 20000 10000 0 No exclusive room One room Six rooms and above Two rooms Three rooms Four rooms Five rooms Number of dwelling rooms Source: CSO Exhibit 3.3 Percentage distribution of households by source of drinking water Size of drinking 1991 2001 water Total Rural Urban Total Rural Urban Tap 32.26 20.64 65.06 36.70 24.29 68.66 Well 32.23 38.01 15.91 18.17 22.22 7.71 Tubewell/handpump 30.04 34.90 16.32 41.22 48.94 21.35 Tank/pond 1.33 1.69 0.31 1.01 1.28 0.31 River, canal and lake 2.00 2.58 0.36 1.01 1.33 0.19 Spring – – – 0.74 0.93 0.25 Others 2.14 2.18 2.04 1.15 1.01 1.53 Total 100.00 100.00 100.00 100.00 100.00 100.00 Source: Office of the Registrar General of India Notes: Data for the Census year 1991 exclude Jammu & Kashmir. Exhibit 3.4 Per cent distribution of urban, rural, and total households and de jure population by source of drinking water Source of drinking water Urban Rural Total De jure population* Improved source 95.00 84.50 87.90 87.60 Pipedwater into dwelling/yard/plot 50.70 11.80 24.50 23.50 Publictap/standpipe 20.30 16.10 17.50 15.30 Tubewell or borehole 21.30 53.20 42.80 45.80 Protected dugwell 1.80 2.80 2.50 2.40 Protected spring 0.10 0.30 0.20 0.20 Rainwater 0.00 0.20 0.10 0.10 Exhibit 3.4 Contd. 44 THE INDICUS CONSUMER HANDBOOK Ch-03_Bharati.p65 44 1/6/2009, 1:08 PM

3 Exhibit 3.4 (Contd.) Per cent distribution of urban, rural, and total households and de jure population by source of drinking water Source of drinking water Urban Rural Total De jure population* Bottled water, improved source for 0.80 0.10 0.30 0.30 cooking, handwashing1 Non-improved source 4.80 15.40 11.90 12.20 Unprotected dug well 2.90 12.40 9.30 9.60 Unprotected spring 0.10 0.80 0.60 0.60 Tanker truck/cart with small tank 0.90 0.30 0.50 0.50 Surface water 0.80 1.80 1.50 1.50 Bottled water, non-improved source 0.10 0.00 0.00 0.00 for cooking, handwashing Other source 0.20 0.10 0.20 0.10 Total # 100.00 100.00 100.00 100.00 Source: NFHS III, 2005–06 Note: # Total percentages may add to more than 100.0 because multiple answers are allowed, *The de jure population is a concept under which individuals (or vital events) are recorded (or are attributed) to a geographical area on the basis of the place of residence Exhibit 3.5 Number of households having the particular material of roof Material of roof Number of households Grass, thatch, bamboo, wood, mud, etc. 53,386,004 Plastic, polythene 1,173,771 Tiles 75,526,970 Slate 2,808,660 G.I., metal, asbestos sheets 30,487,215 Brick 14,074,492 Stone 17,153,862 Concrete 52,839,227 Any other material 1,645,668 Source: Census of India, 2001 Exhibit 3.6 Number of households having particular material of floor Material of roof Number of households Mud 136,779,853 Wood, bamboo 2,286,504 Brick 6,287,685 Stone 14,507,423 Cement 69,712,015 Mosaic, floor tiles 18,544,232 Any other material 978,157 Source: Census of India, 2001 ASSET PENETRATION AND HOUSING CONDITIONS 45 Ch-03_Bharati.p65 45 1/6/2009, 1:08 PM

Exhibit 3.7 Number of households across source of lighting Source of lighting Number of households Electricity 107,209,054 Kerosene 83,127,739 Solar energy 522,561 Other oil 184,424 Any other 305,308 No lighting 614,849 Source: Census of India, 2001 Exhibit 3.8 Type of drainage Type of drainage Number of households Closed drainage 23,925,761 Open drainage 65,142,354 No drainage 102,895,820 Number of households having bathroom facility 69,371,158 within the house Source: Census of India, 2001 Exhibit 3.9 Per cent distribution of urban, rural, and total households and de jure population by source of drinking water Source of drinking water Urban Rural Total De jure population* Improved source 95.00 84.50 87.90 87.60 Pipedwater into dwelling/yard/plot 50.70 11.80 24.50 23.50 Publictap/standpipe 20.30 16.10 17.50 15.30 Tubewell or borehole 21.30 53.20 42.80 45.80 Protected dugwell 1.80 2.80 2.50 2.40 Protected spring 0.10 0.30 0.20 0.20 Rainwater 0.00 0.20 0.10 0.10 Bottled water, improved source 0.80 0.10 0.30 0.30 for cooking, handwashing1 Non-improved source 4.80 15.40 11.90 12.20 Unprotected dug well 2.90 12.40 9.30 9.60 Unprotected spring 0.10 0.80 0.60 0.60 Tanker truck/cart with small tank 0.90 0.30 0.50 0.50 Surface water 0.80 1.80 1.50 1.50 Bottled water, non-improved source 0.10 0.00 0.00 0.00 for cooking, handwashing Other source 0.20 0.10 0.20 0.10 Total# 100.00 100.00 100.00 100.00 Source: NFHS III, 2005–06 Note: # Total percentages may add to more than 100.0 because multiple answers are allowed, *The de jure population is a concept under which individuals (or vital events) are recorded (or are attributed) to a geographical area on the basis of the place of residence 46 THE INDICUS CONSUMER HANDBOOK Ch-03_Bharati.p65 46 1/6/2009, 1:08 PM

3 Exhibit 3.10 Per cent distribution of urban, rural, and total households and de jure population by type of toilet/latrine facilities Type of toilet/latrine facility Urban Rural Total De jure population* Improved, not shared 52.80 17.60 29.10 29.40 Flush/pour flush to piped sewer 18.80 0.60 6.60 6.50 system Flush/pour flush to septic tank 27.60 10.60 16.10 16.30 Flush/pour flush to pit latrine 4.70 4.10 4.30 4.40 Ventilated improved pit (VIP) 0.20 0.10 0.20 0.20 latrine/biogas latrine Pit latrine with slab 1.40 2.20 1.90 2.00 Twin pit, composting toilet 0.00 0.00 0.00 0.00 Not improved 46.70 82.20 70.60 70.30 Any facility shared with other 24.20 5.30 11.50 10.20 households Flush/pour flush not to sewer/ 4.40 0.20 1.60 1.40 septic tank/pit latrine Pit latrine without slab/open pit 0.70 2.20 1.70 1.80 Dry toilet 0.50 0.60 0.50 0.70 No facility/open space/field 16.80 74.00 55.30 56.20 Other 0.40 0.10 0.20 0.20 Missing 0.20 0.10 0.10 0.10 Total 100.00 100.00 100.00 100.00 Source: NFHS III, 2005–06 Note: *The de jure population is a concept under which individuals (or vital events) are recorded (or are attributed) to a geographical area on the basis of the place of residence Exhibit 3.11 Per cent distribution of urban, rural, and total households and de jure population by housing characteristics Housing characteristic Urban Rural Total De jure population Electricity Yes 93.10 55.70 67.90 67.20 No 6.90 44.30 32.10 32.80 Total 100.00 100.00 100.00 100.00 Type of house1 Kachha 2.50 19.10 13.70 13.40 Semi-pucca 15.80 51.60 39.90 41.60 Pucca 81.20 28.80 45.90 44.50 Missing 0.40 0.50 0.50 0.50 Total 100.00 100.00 100.00 100.00 Persons per room used for sleeping <3 47.30 41.90 43.70 34.10 3 to 4 34.30 34.50 34.40 36.70 5 to 6 14.20 17.10 16.20 19.70 7+ 4.00 6.40 5.60 9.40 Missing 0.10 0.10 0.10 0.10 Total 100.00 100.00 100.00 100.00 Source: NFHS III, 2005–06 ASSET PENETRATION AND HOUSING CONDITIONS 47 Ch-03_Bharati.p65 47 1/6/2009, 1:08 PM

Note: 1 Houses made from mud, thatch, or other low-quality materials are called kachha houses, houses that use partly low-quality and partly high-quality materials are called semi-pucca houses, and houses made with high quality materials throughout, including the floor, roof, and exterior walls, are called pucca houses. Exhibit 3.12 Per cent distribution of urban, rural, and total households and de jure population by housing characteristics Housing characteristic Urban Rural Total De jure population Cooking fuel Electricity 0.90 0.10 0.40 0.40 LPG/natural gas 58.70 8.20 24.70 22.90 Biogas 0.50 0.40 0.50 0.50 Kerosene 8.20 0.80 3.20 2.60 Coal/lignite 4.30 0.80 1.90 1.90 Charcoal 0.50 0.30 0.40 0.40 Wood 22.00 61.70 48.70 49.30 Straw/shrubs/grass 0.50 7.60 5.30 5.40 Agricultural crop waste 0.80 5.40 3.90 4.00 Dung cakes 2.80 14.40 10.60 12.60 Other 0.80 0.20 0.40 0.10 Total 100.00 100.00 100.00 100.00 Place for cooking In the house, separate room 58.90 34.10 42.20 43.00 In the house, no separate room 27.20 33.90 31.70 30.70 In a separate building 4.30 9.90 8.10 8.50 Outdoors 8.70 21.80 17.50 17.50 Other 0.60 0.20 0.30 0.10 Missing 0.20 0.10 0.20 0.10 Total 100.00 100.00 100.00 100.00 Number 35579.00 73462.00 109041.00 522027.00 Type of fire/stove among households using solid fuels2 Stove with chimney 0.10 0.00 0.00 0.00 Open fire/chullah under 9.00 8.20 8.30 8.50 a chimney Stove without chimney 0.40 0.10 0.20 0.20 Open fire/chullah not under 89.60 90.80 90.70 90.50 a chimney Other 0.30 0.00 0.00 0.00 Missing 0.60 0.80 0.70 0.80 Total 100.00 100.00 100.00 100.00 Number using solid fuel 10986.00 66251.00 77236.00 383715.00 Source: NFHS III, 2005–06 Note: 2 Includes coal/lignite, charcoal, wood, straw/shrubs/grass, agricultural crop waste, and dung cakes. 48 THE INDICUS CONSUMER HANDBOOK Ch-03_Bharati.p65 48 1/6/2009, 1:08 PM

Ch-03_Bharati.p65 Exhibit 3.13 Per 1000 distribution of households by primary source of energy for cooking for each MPCE class in rural areas MPCE class No cooking Primary source of energy for cooking (Rs) arrangement Coke/Coal Fire wood LPG Gobar Dung Charcoal Kerosene Electricity Others NR Total & chips Gas Cake 0 – 225 8 4 855 9 0 68 0 0 0 56 0 1000 225 – 255 0 11 833 12 1 86 1 0 0 56 0 1000 49 255 – 300 4 6 832 10 0 101 2 2 0 42 1 1000 300 – 340 10 5 808 11 0 105 1 3 0 56 0 1000 340 – 380 6 10 818 19 3 98 0 3 0 41 0 1000 380 – 420 1 8 801 30 3 110 0 3 0 44 0 1000 420 – 470 5 11 834 30 3 81 0 4 0 32 0 1000 470 – 525 3 9 799 57 3 95 0 8 0 26 1 1000 525 – 615 4 8 796 74 3 79 0 9 1 25 0 1000 615 – 775 7 6 734 131 4 87 0 12 0 18 0 1000 775 – 950 8 7 642 227 5 71 0 20 1 19 0 1000 950 + 25 8 423 439 4 60 0 27 3 10 0 1000 all classes 6 8 770 82 3 89 0 8 0 34 0 1000 ASSET PENETRATION AND HOUSING CONDITIONS estd. hhs. 277 11257 1103263 117093 3847 126857 484 10763 713 48130 383 1432066 sample hhs. 108 374 36672 4271 122 4050 29 348 29 1282 17 47302 49 Source: NSS 60th Round, 2004 1/6/2009, 1:08 PM 3

Ch-03_Bharati.p65 Exhibit 3.14 Per 1000 distribution of households by primary source of energy for cooking for each MPCE class in urban areas 50 MPCE class No cooking Primary source of energy for cooking (Rs) arrangement Coke/Coal Fire wood LPG Gobar Dung Charcoal Kerosene Electricity Others NR Total & chips gas cake 0 –300 48 92 634 128 0 32 5 20 0 40 0 1000 300 – 350 35 65 606 159 0 51 11 44 1 29 0 1000 50 350 – 425 32 35 585 202 1 37 1 92 0 16 0 1000 425 – 500 9 52 478 287 0 34 4 115 3 18 0 1000 500 – 575 26 46 429 333 5 29 1 96 4 30 0 1000 575 – 665 42 31 331 424 0 16 3 144 1 7 0 1000 665 – 775 20 40 253 494 1 11 3 172 3 5 0 1000 775 – 915 31 22 170 623 0 6 0 135 4 8 0 1000 915 – 1120 40 25 97 657 1 8 0 163 5 5 0 1000 THE INDICUS CONSUMER HANDBOOK 1120 – 1500 66 7 52 757 0 3 1 101 3 10 0 1000 1500 – 1925 39 9 22 861 0 1 0 49 7 12 0 1000 1925 + 107 0 15 853 0 1 0 13 0 10 0 1000 all classes 44 27 223 566 1 13 1 110 3 12 0 1000 estd. hhs. 24724 15051 123747 314275 310 7431 828 61240 1585 6400 50 555641 sample hhs. 339 816 6196 16357 21 339 69 2106 89 225 9 26566 Source: NSS 60th Round, 2004 1/6/2009, 1:08 PM

3 Exhibit 3.15 Number of households across type of fuel used for cooking Type of fuel used Availability of separate kitchen within the house for cooking Available Cooking in Not available Total open Firewood 62,398,392 13,376,588 25,067,671 100,842,651 Crop residue 7,914,771 3,621,919 7,718,161 19,254,851 Cowdung cake 9,016,459 3,926,266 5,816,160 18,758,885 Coal, lignite, charcoal 2,294,194 429,171 1,209,365 3,932,730 Kerosene 8,564,798 528,410 3,435,708 12,528,916 LPG 31,079,163 387,143 2,130,492 33,596,798 Electricity 270,204 18,237 49,613 338,054 Biogas 764,793 18,728 65,577 849,098 Any other 636,590 289,693 305,444 1,231,727 No cooking 0 0 0 630,225 Source: Census of India, 2001 Exhibit 3.16 Percentage of urban, rural, and total households and de jure population possessing various household goods Household goods Urban Rural Total De jure population* Mattress 75.40 48.70 57.40 59.40 Pressure cooker 69.90 22.10 37.70 38.60 Chair 76.10 43.80 54.30 55.40 Cot or bed 86.30 81.20 82.90 85.00 Table 65.00 32.90 43.40 44.60 Electric fan 84.70 38.60 53.70 54.00 Radio or transistor 38.90 27.00 30.90 32.40 Television (black and white) 25.60 18.70 21.00 22.80 Television (colour) 51.50 12.50 25.20 25.60 Any television 73.20 30.10 44.20 45.90 Sewing machine 30.90 12.60 18.60 21.20 Mobile telephone 36.30 7.40 16.80 17.60 Any other type of telephone 26.70 8.00 14.10 14.60 Computer 8.00 0.60 3.00 2.80 Refrigerator 33.50 6.60 15.30 15.70 Watch or clock 91.00 71.40 77.80 80.50 Water pump 11.00 9.90 10.20 11.70 Thresher 0.40 2.20 1.60 2.40 Tractor 0.50 2.30 1.70 2.60 None of the above 1.20 4.40 3.40 2.50 Source: NFHS III, 2005–06 ASSET PENETRATION AND HOUSING CONDITIONS 51 Ch-03_Bharati.p65 51 1/6/2009, 1:08 PM

Exhibit 3.17 Percentage of urban, rural, and total households and de jure population possessing vehicles Means of transport Urban Rural Total De jure population* Bicycle 50.10 51.60 51.10 56.50 Motorcycle or scooter 30.50 10.80 17.20 19.00 Animal-drawn cart 1.00 7.40 5.30 6.70 Car 6.10 1.00 2.70 2.80 None of the above 36.40 43.00 40.90 35.60 Source: NFHS III, 2005–06 Asset Ownership Exhibit 3.18 Asset ownership Assets Number of households (lakh) Percentage of households Electricity 1,372 64.09 LPG 544 25.40 TV 882 41.20 Telephone 332 15.51 2 wheeler 387 18.08 4 wheeler 78 3.62 Source: Market Skyline of India, 2006–07, Indicus Analytics Exhibit 3.19 Asset ownership, 2006–07 1600 1400 1200 No. of households (lakh) 1000 800 600 400 200 0 e ty G er er TV on ci LP el el tri ph he he ec le w w El Te 2 4 Assets Source: Market Skyline of India, 2006–07, Indicus Analytics 52 THE INDICUS CONSUMER HANDBOOK Ch-03_Bharati.p65 52 1/6/2009, 1:08 PM

Ch-03_Bharati.p65 Exhibit 3.20 Consumption profile of layers in consumption pyramid (IRS) Layer name Household/Population Percentage of households in each layer consuming/having (mn) Tvs Cars PCs AC Washing 2 Modern Shampoo Bank A/C 53 (Internet) machine wheeler foods* Samriddha I (Prosperous) 0.20 100 71 59(42) 48 81 65 55 93 94 Samriddha II (Prosperous) 0.20 100 44 42(24) 26 76 72 39 91 93 Sampanna (Well off, not wealthy) 0.20 98 24 18(3) 5 53 69 25 89 87 Siddha 0.20 94 10 4 - 30 62 9 85 80 Unmukha (Upward looking, aspiring, 0.20 92 2 - - 8 50 1 79 69 moving beyond average) Saamaanya (Ordinary, average) 0.20 79 - - - - 30 - 70 54 Sangharshi (Strivers) 0.53 51 - - - - 6 - 69 33 Nirdhana (Poor) 0.20 6 - - - - - - 38 8 Source: Guide to Indian Markets 2006, MRUC, Hansa Research Note: *3 out of 5 of the following products consumed = Jams, cheese, ketchup, instant noodles, soups ASSET PENETRATION AND HOUSING CONDITIONS 53 1/6/2009, 1:08 PM 3

Indicus Consumer Handbook - Asset Penetration and Housing Conditions

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