India is undergoing an unprecedented consumption boom. Indian consumers have never felt better before. They are confident shopping as they are contended on major fronts such better job prospects, easy loans and increasing salaries.
The International Marketing firm, ACNielsen conducted an international survey covering 47 countries to study Consumer Confidence and Opinions. The results for the first half of 2007 shows India as the topper for the 5th consecutive year scoring 135 points while the global average was just 97. The figure has been in line with India’s booming economy reported to be at an 18 years all time high at 9.4% last month. China was at 99 just close to the average figures. Below is a bar diagarm depicting trends in the Consumer Confidence Index in 2006 and for first half of 2007.
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According to the survey,
– 93 % of the Indian consumers felt that their job prospects in the next 12 months were excellent or good
– 90 % thought great about their personal finances in the next 12 months
– 61 % consider it the right time buy things that they ever wanted, and
– 53 % of Indians wanted to invest in shares of stock or mutual funds
The urban middle class in China and India are spending on durables, home decoration, clothes, mobiles, cars, equity investments, and travel and latest gadgets. A third of Chinese consumers and one fifth of Indians say clothes shopping is their favorite thing to do.
India has never seen so many shopping outlets that it has in the last 4 years. Indians were (had to be) contended with Kiranas (little family owned grocery shops and there are millions & millions of them) when it came to buying dailies and for clothing and accessories there were a few branded outlets. Shopping was an eventful activity mainly on dedicated shopping streets, often open to the vagaries of the weather, sweating it out in Janpath or Karol Bagh in New Delhi or Crawford market & Linking Road in Mumbai. Each Locality within Delhi still has a weekly Bazar and they sell everything you ever wanted. Its like an open shopping complex. Even until 2002-3 we didn’t have many reasonable sized shopping malls. Today there has been an explosion of supermarkets and hypermarkets in India with modern retailers coming in to serve the “new” consumer.
According to a survey about 32 percent of Indians go for shopping once a month where as 22 percent of them indulge in it once a week. Both in China and India mobile phones and cars is almost a status symbol. I believe the rise in Confidence levels in the Indian Consumer (similar in China in many ways) can be attributed to
1. Higher salaries and expectations of its increase with regard to rapid high growth in the economy
2. Increase in double income families
3. One and two leading to higher affordability and disposable incomes.
4. Significantly better job prospects.
5. Easy access to variety of branded goods (The word branded was earlier connected with gifts from foreign relatives visiting us in India in summer holidays)
6. Change in fashion and trends following the more developed countries – obviously is attributed to higher dispensable incomes
7. Increased competition from international players and growing domestic market thus lowering down prices thereby bringing goods within reach of the middle class
8. Loans on easy terms thus moderating the ideology of every Indian household to “save & Invest” only
9. Concept of shopping in multiplexes being new and they are loving the “discovery”. These malls are more than just about buying. They are entertainment hubs and millions of Indians living in congested accommodations find themselves easing out in a one stop shop with movies, food courts, and clothing outlets.
To conclude: The consumer in India and China is changing rapidly. The young middle class, below 30 years and constituting majority of their population are aspirational of their needs, ambitious, hard working and have money to spend on trends. They are brand-conscious and aware of what the West is doing in fashion and style, making shopping almost a national pastime.