India’s retail industry, estimated to grow into a $427 billion industry by 2010 from the current $328 billion, should intensify its focus on the youth as the most potential consumer, recommends a study.
The country’s biggest asset in the context of the retail industry is the consumption power held by a billion-plus consumers, more than half of whom are less than 25 years of age. This is made all the more lucrative by the increasing purchasing power coupled with aspirations for acquiring quality products, said YouSumerism – Youth In India: Opportunity Knocks – conducted by leading global professional services firm Ernst & Young.
“Those living in emerging markets still have the tendency to save money. However, by 2010 it is expected that the per capita income in India will reach a tipping point, which will then lead to accelerated consumerism in India,” Ashok Rajgopal, director (retail industry), Ernst & Young, said in a statement.
“By targeting the youth population in India, retailers will be investing for the future as they will be able to influence and create loyalty from the start. The Indian youth offers a huge lifestyle and luxury products and services consuming audience,” Rajgopal added.
According to the study, Indian youth can be classified into three age groups – 13-21, 22-28 and 29-35 – based on behavioural patterns and habits. Besides, consumerism as manifested among youth in large cities varies from that in smaller towns, which means that regional characteristics and ethnic backgrounds also can be used to reach out to the youth.
India’s vast middle class and its as-yet under-tapped retail industry are key attractions for global retail giants wanting to enter newer markets. Rajgopal said, “The availability of quality retail spaces and brand communication are seen as positive factors inviting investment from retailers in the United Kingdom, Spain, Germany, Italy, France and the United States.”
According to ‘Retail in India Getting Organised to Drive Growth’, a report by AT Kearney and the Confederation of Indian Industry, retail is one of India’s fastest growing industries with a 5 per cent compounded annual growth rate.