Upward buying trends across Indian middle-income households are unarguably driving the consumption bandwagon since an average consumer’s spending power has moved up, creating higher opportunities for retail players. Our Indian consumer base is therefore growing and gradually transitioning in to the inspirational category while consumer goods companies are sitting up acknowledging the immense untapped potential to create offerings best suited to their needs.
What has given boost to the Indian retail growth story in the past couple of decades is increased urbanization, favorable demographics (50% population in the income age group), rising per capita income creating huge growth opportunities across rural and urban consumer.
The growth of Indian consumer market size can be easily ascertained through IBEF’s recently report:
The growing purchasing power and rising influence of the social media have enabled Indian consumers to splurge on good things. Import of electronic goods reached US$ 53 billion in FY18.
Indian appliance and consumer electronics (ACE) market reached Rs 2.05 trillion (US$ 31.48 billion) in 2017. India is one of the largest growing electronics markets in the world. Indian electronics market is expected to grow at 41 per cent CAGR between 2017-20 to reach US$ 400 billion.
As of FY18, washing machine, refrigerator and air conditioner market in India were estimated around Rs 7,000 crore (US$ 1.09 billion), Rs 19,500 crore (US$ 3.03 billion) and Rs 20,000 crore (US$ 3.1 billion), respectively.
India became world’s 2nd largest smartphone market with 40.1million units shipped between Jul-Sep2018. India is expected to have 829million smartphone users by 2022.
The above insights simplify and helps us take a closer look at some of the factors that influenced the Indian Consumer landscape in 2018:
With the smartphone usage on an ever-increasing rise, urban and rural markets are heavy consumption feeders of digital content today. This phenomenon has driven the e-commerce market in the country.
As a derivative to the former, urban consumers are increasingly getting comfortable with buying product online. A KPMG study reveals that 75% of Indian language internet users prefer mobile wallets over website applications.
Higher disposable incomes coupled with recent government initiatives are influencing consumption and investment in the economy. Positive changes in FDI policy, govt drives on digital programs and higher spending power is redefining the overall Indian consumer’s story.
Hence, 2019 holds promise for the Indian Retail sector while they withstand digital disruption converging online and offline buying channels with a clear focus on enhanced Customer Experience. The SFA App is most definitely a part of this revolution. While businesses gear up for the interesting road ahead, these are the few things to consider:
· Rural and Urban growth
· Increasing adoption of technology in business
· Increasing participation of small and medium enterprises to Online Buying
· Innovation in large store formats and Modern trade
· Consumer preference towards natural products and Indian goods
· Rise in private labels
· Higher investments
· Increased competition from smaller players
2019 is set to witness a paradigm shift in the overall consumer outlook. With continued investments, changing lifestyles, higher disposable incomes, increasing literacy levels and rising consumer expectations in the rural market, India holds great potential for organizations ready to adapt and adopt the compelling changes for a sustainable future.