India will be the third largest consumer market by 2025 with the nominal year-over-year expenditure growth at 12 per cent and consumption expenses will increase three times to 4 trillion said the report, released by the Boston Consulting Group's (BCG) Centre for Customer Insight (CCI).
This growth will be influenced by emerging cities with populations of less than 1 million. These cities will be the fastest growing and will shape the growth in a big way. Consumers in these cities act in a different way from big city consumers. Annually 40% of expenditure is rising in these cities and about 40 per cent of the population will be living in urban areas by 2025.
Another important factor which will help in the growth will be elite and affluent Indians and will become the largest joint section by 2025. These will mutually account for 40 per cent of the consumption compared to 27 percent now. “By 2025, wealthy urbanites will be responsible for one-third of total consumption,” the report says.
The internet is an increasingly persistent factor in India’s business and its influence will only expand in the future. The number of online buyers has increased from 80 million to 90 million in the past three years. Digital spending will also be on the rise. According to the study digital channels will influence 30% to 35% of all retail sales by 2025 and 8% to 10% of retail spending will be online.
“Our research found that about 70% of those who have access to the internet go online to make informed purchase decisions. As consumers get more comfortable with digital capabilities, their usage patterns exhibit growth that belies age and other demographic variables.” said Kanika Sanghi, a BCG principal and report coauthor.
According to BCG, “Companies need to stay ahead of the curve, developing their own innovative offering for consumers and staying agile enough to change effectively”.
April 01, 2017