Consumer india ii

India’s Consumer Market –
Size and Composition

Size and Composition
What is the size of India’s consumer market at
present?
How will it grow by 2025?
What constitutes India’s consumption basket?
What does ‘consumer India’ consume today?
How is the consumption basket shifting how?
How will it be in 2025?
How much the Indians ear now?

Size and Composition …Contd.
How will income distribution change in the
coming years?
How will household income grow by 2025?
What will Indians spend their new-found income
on?
What categories will grow in their share in the
consumption basket?

What do We Mean by Consumer Market /
Consumption Basket?
A consumer market basically represents the
spending by households / people. The term
‘consumption basket’ too basically refers to the
same. They both correspond to private final
consumption expenditure (PFCE) of households
plus non-profit organisations serving
households, in the domestic market.

What do We Mean by Consumer Market /
Consumption Basket? …Contd.
In other words, they reflect the spending by
the ultimate consumers. It is usually
categorised into expenditures on food,
clothing, rent, transport and communications,
consumer goods, education, medical needs,
etc.

In India, a larger percentage of GDP
is accounted for by private
consumption basket (Research Report by
Morgan Stanley)

Size of India’s Consumer Market at
Present
In 2005 India’s consumer market stood as
shown in the Table in the next slide. It can be
seen from the table that presently, ‘food,
tobacco and beverages’ (FTB) category is
the largest expenditure head at 45 per cent of
the total expenditure. ‘Transport and
communication’ comes next at 16 per cent.

India’s Consumer Market in 2005
Category Consumption 2005 (in Rs. Billion, at
2000 prices)
Food, beverages, and tobacco 7,147
Transportation 2,788
Housing and utilities 2,019
Personal products and services 1,274
Health care 1,148
Apparel 931
Education and recreation 762
Household products 484
Communication 344

 Share of food decreases and share of other
products gets larger
 A large share goes to transport and
communications
 More goes to medical care too
 Shares of the expenditure on education,
clothing, and household goods remain
stable

How would India’s Consumer Market and Indians’
Income and Spending Grow Between 2005 and 2025?
(Source: Adapted from McKinsey Global Institute Report)
How would Household Income Grow by 2025
 Income levels will almost triple if India
continues on its current high growth path over
the next two decades. We assume compound
annual growth of 7.3 per cent from 2005-2025,
a marked acceleration from the 6 per cent
growth of the previous two decades. Forecasts
for India’s read GDP growth rate over the
coming two decades will generally, range
between 6 and 9 per cent per year.

(Source: Adapted from McKinsey Global Institute Report) …Contd.
How would Household Income Grow by 2025 …Contd.
 Average real household disposable income will
grow from Rs. 113,744 in 2005 to Rs. 318,896 by
2025, a compound annual growth rate of 5.3 per
cent as against the 3.6 per cent of the previous 20
years.
 The shape of the country’s income pyramid will
change dramatically.
 India’s middle class will swell by over eleven
times from its current size of 50 million to 583
million people.

 9.5 million Indian households will be among
the country’s rich / global class in 2025.
 Rural households will benefit too. Annual
household income growth will accelerate
from 2.8 per cent over the past two
decades to 3.6 per cent over the next two
decades.

 While despite significant GDP growth in
recent years, as of today, India remains
dominated by people in deprived and
aspirer classes, over 291 million people will
move from desperate poverty to a more
sustainable life between 2005 and 2025.

How would Household Spending Grow by 2025
 Indian spending patterns will also evolve
and shift with basic necessities such as
food and apparel declining in relative
importance, and categories such as
communications and health care growing
rapidly.

How would Household Spending Grow by 2025 …Contd.
 Aggregate consumption / spending will quadruple, in
real terms, from 17 trillion Indian rupees today to 70
trillion by 2025 – a fourfold increase in the coming 20
years. By 2015, it will have doubled and reached 34
trillion. This soaring consumption will vault India into
the premier league among the world’s consumer
markets. It will climb from its present rank of the 12th
largest to the fifth largest consumer market in the
world by 2025. By 2015, it would have become almost
as large as Italy’s market. And, by 2025, it will be
surpassing Germany’s consumer market.

How would Household Spending Grow by 2025 …Contd.
 Discretionary spending will account for 70 per
cent of all spending by 2025.
 As the incomes rise, the ‘share-of-wallet’ of
consumer spending will change significantly.
 The rich / global class will wield 20 per cent of
total spending and the new middle class will
come to dominate, controlling 59 per cent of
India’s consumption power.

Share-of-wallet shifts from category to category
not Just from brand to brand
Today, marketers are struggling to retain consumers’
share-of-wallet to their respective categories.
Retaining the market share of one’s brand within the
given category comes only next. The category-to-
category competition confirms that the consumer is
shifting his / her share-of-wallet across categories. For
example, consumers have been transferring a part of
what they have traditionally been spending on FMCG
items to durables / semi-durables / technology
products.

India’s Consumer Market – Size and Projected Growth Category-Wise
(in Rs. Billion, at 2000 prices)
Category Market
size 2005
Market
size 2025
Market
growth
CAGR
(%)
Transportation 2,788 13,754 10,965 8.3
Food, beverages, and tobacco 7,147 17,296 10,150 4.5
Health care 1,148 8,902 7,775 10.8
Personal products and services 1,274 7,424 6,150 9.2
Education and recreation 762 6,120 5,359 11.0
Housing and utilities 2,019 6,624 4,605 6.1
Communication 344 4,288 3,944 13.4
Apparel 931 3,267 2,336 6.5
Household products 484 1,828 1,344 6.9
Source: McKinsey Global Institute Report

The Rich / Global Indians
The rich / global Indians comprise of households
with real earnings of more than Rs. 10 lakh or
$21,890 a year ($117,650 at PPP). As a share of
the total, ‘the rich’ is not a large segment in
consumer India. However, in absolute terms,
their number is significant. It is a particularly
significant segment when we consider their
consumption –s size and pattern. It is also a high
growth segment. Actually, two things are
happening: (i) their number is growing and (ii)
they are getting richer and consuming more.

The Rich / Global Indians …Contd.
McKinsey has estimated that there were 12
lakh households in the ‘rich’ class in 2005 and
has projected that it will grow at a rate of 8.6
per cent and reach 2 million households by
2010. The number would grow almost eight
times and reach 9.5 million by 2025.
Interestingly, by then they will be earning
almost a quarter of the country’s income.

Showing a new attitude towards consumption
The rich / global class does not hide their grandeur
anymore. They do not believe in living for tomorrow.
They believe in living life king size today, instead of
merely squirreling away wealth for future
generations. A sizeable section among them is after
instant gratification. The growing sales of diamonds,
furs, caviar and champagne, exquisitely crafted
artifacts, customised modern art, and expensive
accessories, are accounted for, by this high-end /
affluent consumers.

Indulgence regardless of cost; buying
status through super brands
They are willing to pay the due price for the
exclusivity they seek. The higher end in this
breed, in particular, does not battle an eyelid
about spending lakhs on club memberships
and games like polo and gold, and expensive
holidaying. They are actually looking out, all
the time, for ‘new things’ on which they can
spend their money.

Indulgence regardless of cost; buying
status through super brands …Contd.
Every new gizmo that hits the market is a
must-have for them. They spend
conspicuously. They are constantly upgrading
their lifestyle to that of the affluent in the
West. The high purchasing power, in
combination with interaction with the rest of
the world, especially Europe and the US, has
brought the western world into their homes.

‘The rich’ are found in tier-two cities and
rural areas too
Evidence suggest that today half of the ‘rich’
are found in India’s tier-two cities and
selected rural areas. Consumer goods
marketers today, focus their marketing efforts
here too, along with the metros. LG,
Samsung, Maruti, Hyundai, Daimler Chrysler
and others are examples.

rural areas too …Contd.
They have ramped up distribution to tap this
growing base of affluent consumers in smaller
cities. Evidence suggest that non-metro cities
like Chandigarh, Shimla, Ludhiana,
Jalandhar, Pune and Amritsar are becoming
more receptive by the day to premium cars,
home theatres, and other high-value
consumer products.

rural areas too …Contd.
The rich plus the upper crust of the middle
class form a unique consumption group in the
contemporary Indian context. Luxury / high-
end products depend entirely on them. With
other products too, the premium brands
greatly depend on them. That is why this
segment is sometimes described as the
‘image segment’ of consumer India.

The Middle Class
Who Constitute the Middle Class? What is its
Size?
The Strivers and Seekers together – those with
incomes of Rs. 2 lakh to 10 lakh per annum –
constitute the middle class. The Seekers (with
incomes of Rs. 2-5 lakh) form the lower part of
the class and the Strivers (with incomes of Rs. 5-
10 lakh) the upper part. McKinsey has estimated
that in 2005, the Indian middle class comprised
13 million households and 50 million consumers.

The Middle Class …Contd.
Who Constitute the Middle Class? What is its
Size? …Contd.
Thus, as a percentage of the total population, the
Indian middle class is still relatively small,
comprising approximately 5-7 per cent of the
population. Of course, the size would change if
we changed our definition of the class, i.e. the
income bracket. For example, if we consider
everyone with income of Rs. 1 lakh to 10 lakh
per annum as part of the class, the size would of
course bulge.

By 2025, it will have 583 million, making India
a truly ‘middle-class country’
According to both NCAER and McKinsey
studies, the middle class is growing at the fastest
rate and will continue to do so in the coming
twenty years. By then it would have reached 41
per cent of the population or 128 million
households with 583 million consumers. There
will be a bulge in the categories of strivers as
well as seekers.

Fig. 1 – Indian Consumption is Currently Dominated by the
Aspirers – the class immediately below the middle class in income
– Position in 2005 (E)
Note: Figures are rounded to the nearest integer and may not add
up to 100 per cent.
Source: MGI India Consumer Demand Model, v1.0
7%
6%
12%
51%
24%
Household Income Brackets (in Thousand
Indian Rupees)
Globals (>1,000)
Strivers (500-1,000)
Seekers (200-500)
Aspirers (90-200)
Deprived (<90)

Fig. 2 – Indian will be Dominated by the Middle
Class by 2025 (F)
Note: Figures are rounded to the nearest integer and may not add
up to 100 per cent.
Source: MGI India Consumer Demand Model, v1.0
3%
17%
35%
24%
20%
Household Income Brackets (in Thousand
Indian Rupees)
Globals (>1,000)
Strivers (500-1,000)
Seekers (200-500)
Aspirers (90-200)
Deprived (<90)

Concentrated Somewhat in Urban Areas
India’s middle class is presently concentrated
to a good extent in cities and class I towns. A
marketer can cover over a half of the middle-
class market, by reaching out to top 50 cities
in the country in terms of population. He can
reach over two-thirds of the market by
covering top 100 cities.

Not totally confined to urban areas, not
just to the big cities, anyway
The middle class is not, however, confined
totally to the metros / other big cities or to
urban areas in general. This would be evident
from the district-wise income index published
by different agencies. The ET district-wise
income index, for example, shows that higher
incomes are not confined to the metros.

just to the big cities, anyway …Contd.
While Mumbai, Delhi, Bangalore and Chennai
quite expectedly grab the top four ranks,
along with them districts like north and south
24 Parganas, Indore, Ernakulam, and
Muzaffarnagar, also find a place in the top 25
list.

While the top six Indian cities – Mumbai, Delhi,
Chennai, Kolkata, Bangalore and Hyderabad –
account for 14 per cent of India’s GDP, cities
with a population of more than half a million –
tier-two cities like Nagpur, Surat, Vadodara,
Ahmedabad, Vijayawada – account for about 13
per cent of the GDP. There is a sizeable middle
class in the rural areas too.

An NCAER study reveals that rural
households in the upper income categories
are growing at a much faster pace than urban
households in the corresponding categories.

There are middle-class consumers in
small towns; they are buying high-end
durables
There is a reasonably-sized segment of
middle class consumers in small towns too –
towns with less than one lakh population.
They have begun contributing significantly to
sales of high-end durables such as flat
televisions and frost-free refrigerators.

durables …Contd.
According to an estimate by ORG-GFK, they
contributed about 33 per cent of flat television
sales, about 28 per cent of frost-free
refrigerator sales and 20 per cent of fully
automatic washing machine sales.
Consumers in the rural areas are included in
this. Higher income has fuelled the growth.

durables …Contd.
According to recent industry estimates,
consumption of premium bikes and top end
cars by middle class in rural areas have gone
up by 35-40 per cent. They are also now
looking for value products, and better-
technology products, not just cheap products.

The Changing Profile
of the Middle Class

The Changing Profile of the
Middle Class
A Class Growing in Confidence
The middle class is at the centre of the socio-
economic changes now taking place in the
country.
It is better educated and better exposed to
matters global. The younger among them
usually have a professional qualification.
Opportunities are available to the class as
never before. They enjoy far greater scope to
shape their future than their parents ever had.

Middle Class …Contd.
A Class Growing in Confidence …Contd.
It has become possible for exceptionally talented
young people in the class to make big fortunes in
a short time, via enterprise as well as
professional work. Many entrepreneurs are
emerging from the class every year, many of
them seizing key slots in the IT and other New
economy businesses. The class is non-
ideological, pragmatic and result oriented. What
we see today is ‘a confident new middle class’.

Acquires a New Political Clout
Along with the explosion in size and the
growth in economic power, the class has
acquired a new political clout. No political
party can now risk displeasing this group. It
has the clout to shape the government’s
policies in may fields. It is not swayed much
by considerations such as religion, region,
caste, and language, or even ideology.

Acquires a New Political Clout …Contd.
It has a common agenda, a simple agenda for
that mater – get good income, provide for the
best goods and services and enjoy life. The
developments in recent years have brought
some tangible gains to them and they would
oppose any move at the policymaking level to
change that equation. They have become a
powerful lobby. They also have the support of
the media in good measure.

Becomes India’s ‘Consumption
Community’
The middle class is becoming the
‘consumption community’ of the country.
Their number as well as spending power has
been growing at a rapid pace. Often, they
spend more than what they earn at the given
point in time, in order to cope with their new
social image. Availability of credit has come
to their rescue.

Becomes India’s ‘Consumption Community’
…Contd.
Expensive fabrics, ready-mades, stereo-
music systems, CTVs, refrigerators, electric
mixer cum grinders, pressure cookers, gas
stoves and now, cell phones have become
essential items for the class. Appliances like
washing machines, vacuum cleaners,
microwaves, and dishwashers are gaining a
rapid entry into the homes of the upper
segment of the class.

…Contd.
Personal transport is becoming a must for
them. The massive expansion in the two
wheeler and passenger car markets is linked
to the demand from this class. The rise of the
stock markets over the past few years is also
attributed, to some extent, to the growing
economic strength of the class.

…Contd.
A combination of factors like increasing
disposable income arising out of larger job
opportunities at higher wages – in sectors like IT,
insurance, finance, and retail.
Today, a person in the middle class just starting
a job goes for own house and car. His high
income coupled with the availability of ample
loan facilities / finance options permits such
purchases.

Paradigm shift in outlook on consumption
No longer is the consumer willing to wait,
save, and defer consumption. He or she
wants to consume now and pay later.

Spending Pattern Undergoes a Major Shift
The share of spending on grocery has fallen
significantly while that on clothing, personal care,
and eating out has risen significantly. Analysis
shows that people in the age group of 20-24
years are spending the largest proportion of their
incomes on consumer durables like TV’s,
fridges, and microwaves and those in 35-44
group are spending it on apparels and
furnishings. Practice of giving gifts is growing.

From Functional Living to Lifestyle Living
to Flaunting the Affluence
In the past, the middle-class was, by and
large, voting for functional living, buying most
of the products for functional reasons. They
have now started buying many products for
emotional reasons. Spending has shifted from
conventional to aspirational. They now feel
the need for projecting a specific image.

From Functional Living to Lifestyle Living
to Flaunting the Affluence …Contd.
It is the change in their lifestyles that has
brought about the change in their
consumption habits. Yesterday’s luxuries are
fast becoming today’s necessities. Spending
big is fine with them. So is living on credit.
Unlike their fathers who were content driving
an Ambassador for 25 years, they change
their car every two years.

From ‘family-need based spending’ to
‘spending for pampering oneself’
Earlier, middle class people were generally
spending more for the family than for
themselves. Today, most of them happily
lavish things on themselves. This trend is
more visible among the younger in the class.

Goes after lifestyle products / activities
According to a KSA Technopak Consumer
Outlook report, the present day urban middle
class is going after lifestyle – oriented
products and activities – items such as
entertainment, clothes, eating out, and
vacations. Many of them – from the upper half
of the segment in particular – are now
embracing many hitherto unaccustomed
products. comfort products.

Goes after lifestyle products / activities …Contd.
They have moved up from spending on basic
products to the lifestyle categories – air travel,
personal grooming, alcoholic beverages, leisure,
entertainment, CDs, DVD players, camcorders,
digital cameras, and several convenience and
comfort products. Health awareness has turned
them towards health insurance. They are also
spending substantial sums of money on fitness
centres, skincare products and health food.

Goes after lifestyle products / activities …Contd.
They also now have a more liberal attitude to
eating out, and travel. In their homes,
computers and related furniture are replacing
bookshelves in children’s rooms. They prefer
to shop at a supermarket instead of a local
grocery store and watch a movie in a
multiplex rather than a cinema house of the
older type.

Products from across the globe make it to Indian
retail shelves
The Indian consumer is also getting global.
Imported brands in several categories like
food, home-cleaners, shampoos, soaps and
health foods are now seen to occupy a good
part of the shelf space of the supermarkets.
Three factors – awareness, availability and
affordability – are aiding it.

Products from across the globe make it to Indian
retail shelves …Contd.
Many consumers have travelled abroad and
are used to the imported brands. They now
have access to them in India. Even first-time
consumers buy it since it is aspirational. Many
imported brands have moved on from a mere
high-end usage category to the middle-class
one and are poised to be volume pushers.

Seek World-Class Shopping Experience
Today’s middle class is also looking for world-
class shopping experience. A good shopping
place and a decent mix of products is not
enough; they want food courts, entertainment
facilities, amusement facilities for children,
and hassle-free parking facilities. They are
also after intangibles like best ambience and
best mall arrangement.

Seek World-Class Shopping Experience
…Contd.
The shoppertainment concept has spread all
over India. It confirms the new leisure-
pleasure-shopping lifestyle of the middle
class. Middle-class Indians in metros and tier-
two cities are now making a good part of their
purchases from such modern retail outlets.

Go for modern, attractive and fully loaded
homes
Many middle-class Indians are now either buying
/ building new modern and attractive homes or
are redesigning their existing houses. House
improvement and improvement of interiors are a
significant preoccupation of a large number of
present-day middle-class Indians. Of course,
with many women working from home, there is
also a genuine need now to accommodate a new
workspace in the house.

Go for one more car, one more TV..
The middle class homes – the higher end of
the class in particular – are now aspiring for
buying ‘one more’ in every category. They
need a second car, a second TV and a
second refrigerator. This is an indication of
their growing needs, the growing purchasing
power, and the growing willingness to spend.

Go for one more car, one more TV …Contd.
Marketers fuelled this desire by appropriate
offers and campaigns like, Onida candy,
positioned as a bedroom TV, the Bajaj Sunny
selling as ‘a bike for your wife’, Akai’s free
offer of a 14-inch TV along with every 29-inch
model and HDFC’s additional mini credit card
for city shopping.

Go for fast replacement of appliances /
gadgets
Many middle class consumers now change
appliances every 4-5 years. Earlier, they were
doing it over 10-12 years. In the case of mobile
handsets, they are now willing to change within
two years. According to a survey by the mobile
handset industry, 76 per cent of those contacted
said they would change their handsets within the
next 12 months and 18 per cent said they would
do so in the next 12 to 24 months.

Proliferation of new generation coffee
cafes
In the context of the changing lifestyle and
eating habits, a mention must be made about
the growth of the new generation coffee cafes
too.

The Globetrotter
Mobility is also high now with the middle class;
travel by road, rail or air, are all on the increase. In
fact, holidaying is now becoming very popular.
People travel to all corners of the country for
enjoyment and relaxation. Foreign travel too is
becoming popular. The middle-class Indian’s foreign
travel began with forays into destinations in South
East Asia, the Gulf and the UK and has spread to
other parts – especially the US – in more recent
years. Travel has become a mass market.

The Middle-Class Youth, Poised to Change
Traditional Profile of Consumer India
Young India is on the Move; in Fast-
Forward Mode
It is the best way to express the emerging
youth market – fast forward. They are going
to be the big spender, from now on. They
drive taste trends; especially leisure and
lifestyle trends will be set by this group; they
experiment the most.

The Middle-Class Youth, Poised to Change
Traditional Profile of Consumer India
Young India is on the Move; in Fast-Forward
Mode
Much of the retail book is already being driven by
them; consumption of items like sports shoes,
apparel and cell phones are shooing up because
of them. Already lakhs of young middle-class
Indians (median age of 24) now live ‘the life of
the rich’. It is a sight of ‘the young and the
restless’ being unleashed.

The Teens
The middle-class Teens (Teenagers) – 13 to 19
years olds – form another distinct and sizable
segment of ‘consumer India’. It must be noted that
there is a slight overlap between ‘youth’ and ‘teens’
in our discussions as the 18-19 group is included in
both. An IRS study shows that this group consumes
about 30 per cent of the mainstream products. It is a
particularly important consumer segment for product
categories like garments, cosmetics, personal care
products, fast foods and soft drinks, and consumer
electronics / IT products.

The Teens …Contd.
Compared to their seniors, the present-day teens
are more modern and adventurous. In them, we
see the blend of the Western and Indian
lifestyles. As a general rule, they care less for
aspects like religion and tradition, and more for
material comforts and physical well-being. They
seek novalties, and are after a ‘New Look’ in
most respects. ‘Variety’ interests them. And most
of them are quick in adopting ‘current fashions’.

The Teens …Contd.
They are more receptive to change. Their tastes
and preferences can be influenced relatively
more easily. It is, of course, not easy to dupe
them. Marketers can motivate them to try new
things. As the ‘teenage market’ is gaining in
importance, many manufacturers now
particularly target the teens and make distinct
offer to suit them.

Consumer electronics players target the
teenager
In urban / semi-urban India, there is a large tech-
savvy, computer-oriented, teenage-group, whose
parents have the required affordability. Naturally
consumer electronics players target them. HP
has targeted them for its latest digital cameras.
Their assessment is that ‘Photo printers and all-
in-one products are now used widely by the
teenage group for communication and instant
image-sharing’.

Consumer electronics players target the
teenager …Contd.
Philips too has recognised the importance of
the segment. To quote the company, ‘Youth,
especially the teenager, wants to integrate
PC with entertainment gadgets, which has
prompted us to incorporate PC links into the
audio systems.’

The Tweens
The middle-class tweens also represent big
consumer power. In the chapters on
Marketing Environment and Consumer
Behavior we talked about the advent of the
tweens as a distinct and powerful segment of
consumers across the globe. Here, we are
particularly concerned about the tweens as a
consumer segment in India.

The Tweens …Contd.
Future consumption in the country is going to
be dominated by this category. At present,
they influence most of the purchases of the
family. When a marketer is able to secure a
person as a customer at a young age, he has
a greater possibility of maintaining that
relationship over the long term. Marketers
cannot afford to take this demographic
segment lightly.

The Kids
The middle-class kids (those below the
‘tweens’ in age), also represent sizable
consumer power.

The Lower Income Section
Now, let us turn to the third category, the
lower income section. It corresponds to the
‘aspirers class’ with household incomes of
Rs. 90,000 to Rs. 2 lakh a year. It represents
a sizeable demand base for some categories
of products. Though the per capita purchasing
power of the consumers here is low, their
number being very large, the size of the
market represented by them as a class, is
large.

…Contd.
According to NCAER data / estimate, the
lower income section will constitute 34 per
cent of total households by 2010. NCEAR has
also found that over 75 per cent of the
purchase in categories like cooking oil, tea,
detergent cake, bath soap, tooth powder,
transistor radios, and lower priced footwear,
come from people with below Rs. 25,000 per
annum per capita income.

…Contd.
This translates into an income of around Rs.
1,00,000 per household, per annum. The
section provides a continuous stream of first-
time users of several branded FMCG
products, heralding continuously increased
penetration of these products.

…Contd.
With this Class, Product Categories
Compete for the Same Consumer Rupee
Though incomes with this class have been
rising in recent years, purchasing power
continues to act as a limitation on their
consumption of different products. P.M.
Sinha, former chairman, Pepsi India, has
made some interesting observation on this
which is given in the next slide:

…Contd.
‘Yeh dil maange more’ did Touch This
Consumer, But His Pocket did Not Match
Proliferations of brands / choices have no doubt
kindled consumer’s desires. He has now got a
taste of what the world has to offer. Not
surprising, therefore, that ‘Yeh dil maange more’
finds so much resonance with the lower income
Indian consumer! But sadly, his pocket has not
become matchingly deeper.
Source: Adapted from a speech by Sri P.M. Sinha, former
chairman, Pepsi Co. India.

…Contd.
The climbing up process will continue
In recent years, this class has been moving
up. Every year, its upper most part has been
joining the middle class. The process will
continue. At the aspirational level, a good part
of this group is already a part of the middle
class.

…Contd.
The class is poised to become a market for mobile
phone
Earlier, India became a big market for mobile phones as
the middle class joined the market. Now, even the lower
income section is joining the fray. Both service providers
and handset makers are looking at them as a viable
segment. Handset makers are bringing in mobile
phones below $30 a piece as part of their strategy to
reach out to them. Chinese made handsets are going to
be made available still cheaper. With this, the section is
expected to take to the cell phone in a big way in the
coming years.

Consumer india ii

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