India’s affluent classes will overtake the combined population of the United Kingdom, Germany and France within five years, according to “India: Planning your Approach”, the latest research from international food and grocery expert IGD.
IGD estimates that the middle and upper classes are growing by 15.3 per cent per year and will reach 235 million people by 2012, or 19 per cent of the total population.*
“The opportunities for suppliers and retailers in India are huge. However, success is dependent on understanding a complex morass of regulatory issues and consumer segments,” says Mala Morris, senior business analyst, IGD.
“The later generations of Indians have a vastly different worldview from those that preceded them, which translates into radically different purchasing patterns. India’s young people are embracing a boundary-less world and are more likely to try new tastes and shopping habits.”
“It is crucially important that store formats are adapted to local conditions, and that investment is made in a strong local management team and scalable systems.
“The winners in India will be those that act with speed, have a consistent strategy, and are willing to invest in multi-formats and customer-focused brands,” concludes Morris.
IGD has identified five consumer segments, based on generational differences:
• The broadband generation (born post-1996): A rapidly growing market segment, these young Indians will embrace a boundary-less world; size of the segment in 2010 – 374.8 million
• The liberalisation generation (born between 1985 and 1996): Well-educated and striving to grasp opportunities, this group has grown up in a booming India and is comfortable with technology and modern retail formats; size of the segment in 2010 – 235.1 million
• The transition generation (born between 1966 and 1985): Part of the media boom, this generation is at the forefront of a new, confident India. Comfortable with the traditional and the modern, they will switch easily between the two; size of the segment in 2010 – 348.2 million
• The traditionalist generation (born between 1951 and 1965): Born post-Independence, this generation is savings-oriented and strongly price-conscious; size of the segment in 2010 – 164.5 million
• The pre-Independence generation (born before 1950): Born prior to Independence, this generation is dependent on their children financially and emotionally; size of the segment in 2010 – 97.35 million
*IGD defines the middle and upper classes as those earning over 200,000 rupees (US$21,000 in purchasing parity terms) per year.