India as one of our BRICS partners, and also a major force in ICT and the 4IL deserves some of serious consideration. My attention was grabbed by the recently published Future of Consumption in Fast-Growth Consumer Markets, a project of the World Economic Forum (WEF) and Bain & Company, which focuses on the emerging markets. After studying China in 2017, it turned its attention to India in 2018. India is one of the fastest-growing economies in the world. By 2030, it is on course to witness a 4x growth in consumer spend. It will remain one of the youngest nations and will be home to more than one billion internet users. The new Indian consumer will be richer and more willing to spend. For example, today there are more than twice the number of Indians with credit or debit cards than the total population of SA. The Report identified 10 mega trends for India in 2030. The trends draw upon the research and consumer survey conducted by the WEF and Bain for the Report.
- The Indian middle class will truly come into its own
By 2030, India will move from being an economy led by the bottom of the pyramid, to one led by the middle class. Nearly 80% of households in 2030 will be middle-income, up from about 50% today. The middle class will drive 75% of consumer spending in 2030.
- Upward income mobility will drive growth across all consumption categories
As 140 million households move into the middle class and another 20 million move into the high-income bracket, they will spend 2-2.5 times more on essential categories (food, beverages, apparel, personal care, gadgets, transport and housing) and 3-4 times more on services (healthcare, education, entertainment and household care). Upper-middle-income and high-income entrants will drive a 15-20% increase in the ownership of durables (washing machines, refrigerators, TVs and cars).
- Half the incremental rupees will go into buying more, the rest into buying better and buying new, and better access will transform this intent into actual spend
Half the incremental consumer spend by 2030 will be simply to buy more of the products and services being consumed today.
- Aspirations are fast converging across urban and rural India,
The internet and smartphones have significantly bridged the information divide between consumers in urban and rural India. Beyond the top 40 cities, developed rural and small urban towns already have a very similar income profile. The use of innovative distribution channels will enhance the well-being and unlock the true consumption potential of rural India (an important learning point for Africa).
- Millennial and Generation Z preferences will significantly shape the market
By 2030, 77% of Indians will have been born from late 1980s onwards. Businesses will have richer, more willing buyers, but these buyers will be highly informed and make very specific choices for themselves and their families.
- Digitally influenced consumption will become the norm
“Connectedness” will drive a significant difference in preferences, even at the same income level. As many as 50-70% of the most digitally connected consumers today, across income levels, already use digital platforms for product discovery and pre-purchase research. By 2030, more than 40% of all purchases will be highly digitally influenced.
- India’s eternal hunt for value will grow ecommerce, ‘value for money’ brands and category extensions
Indian consumers will be willing to adopt value-for-money brands that have “just right” features and prices. India’s new consumers have aspirations to consume more (and the necessary income), but they are dispersed across tens of thousands of urban and rural towns. Asset-light ecommerce models, supported by offline partnerships and demand-aggregators, will help brands test out and reach these new markets in a cost-efficient manner.
- Technology-enabled new business models will leverage inherent comfort with ‘usership’ and the desire for increased convenience and well-being
India is the original “usership economy”. Indians have traditionally used public transport services over owned vehicles, and furnished homes using low-cost second-hand furniture rather than new purchases. Digital platforms for renting and sharing will speak to this usership mindset, as well as to the tech-savviness of future consumers. Subscription models will serve the value-conscious Indian keen to access new brands and products for a small recurring spend. Digital platforms for health and learning will fulfil the Indian consumer’s prime aspiration – the desire for greater well-being for themselves and their family.
- Business, policy and civic society leaders will collectively drive an inclusive, healthy and sustainable future for India
Public-private-civic-society partnerships will tackle the 3 key societal challenges facing India today: the need for skills and jobs for its working age majority; the greater inclusion of rural India; and the building of a healthy and sustainable future for its citizens and cities.
- Firms will thrive by innovating and will embrace a ‘founder’s mentality’
Companies will go a step beyond replicating Western models at low costs; they will localize and personalize business models and product/service offerings according to the unique preferences and constraints of their Indian consumer. In the past, companies that have sustained growth in India have been ones with an insurgent mission, frontline obsession and strong owner’s mindset.
The Report concludes that India in 2030 will be a playground for growth and innovation for consumer businesses – both Indian and global, established and emerging. The transformations in the Indian consumer’s income, propensity for consumption, awareness and tech-savviness will create massive opportunities. India in 2030 will also be a platform for stakeholders to shape a path of inclusive and responsible growth, for fast-growing markets across the world to follow.
Definitely some thoughts for SA to consider!