The consumer market is expected to grow at 12 percent annually over the next decade and touch Rs 335 lakh crore, says a report.
The consumer market was around Rs 110 lakh crore in 2018, clipping past 13 percent annually in the past decade when it stood at Rs 31 lakh crore in 2008.
Between 2008 and 2028, the share of private consumption in GDP has increased from 56.8 to 62 percent, higher than the emerging market average which is expected to stay constant at 50-51 percent, the Boston Consulting Group (BCG) said in a report Tuesday.
Growth will be driven by increasing population, higher affluence, continued urbanisation, shifting family structures, the report said and noted that with an 8 percent growth in average spend per household across all income segments, the critical differentiator in consumption growth has turned out to be the expanding base of affluent and elite households.
These households have grown at 10 percent annually in the past decade to double their share from 6 percent in 2008 to 12 percent in 2018. Subsequently, consumption by the affluent and the elite grew at 20 percent annually to corner one-third of the total consumption pie, it said.
Top metros led the growth story in the past decade with 16 percent annual growth. Demand rose in both products and services with clothing, footwear and healthcare amongst the fastest growing categories.
“While clothing and footwear grew 16 percent CAGR, for healthcare it was 14 percent. Categories like financial services, social protection and jewellery also registered strong growth of 15-19 percent annually, it said.
Online retail market grew at a rapid 78 percent albeit on a small base in the last 10 years, taking the share of online retail to 2.8 percent of total retail spending in 2018 from 0.1 percent in 2008.
This growth was led by tenfold growth in the number of Internet users and 26 times growth in the number of online shoppers between 2008 and 2018, it added.