With India rapidly transitioning from a bottom of the pyramid status to become a truly middle-income country in the next 12 years, marketers are exploring fresh avenues of growth from up-trading consumers. By 2030, India will add approximately 140 million middle-income and almost 30 million high-income households, according to research by Bain & Company.
At 61 million, comprising 21% of existing households today, the number of upper middle-income households will more than double to 168 million — or 44% of the total households in the country — in the next 12 years, Bain & Company partner Nikhil Prasad Ojha said. The outcome of this economic transformation, said Ojha, will be most evident in low-income households.
This is music to the ears of the consumer durables industry. The increase in the upper middle-class income to 44% of total households means that the average ticket price would go up drastically. As we all know, it is the evolving group of people who embrace premium brands as soon as they can afford it. Hence, we would see the sale of premium brands and premium products going up significantly. Looking at the scenario, I think we could also see an increase in activity levels of super premium brands like Miele, De Longhi and many more such brands. Products like dishwashers, high-end vacuum cleaners, 100% clothes dryers, hobs and chimneys would find more takers with the economic transformation.
An enhanced purchasing capacity primarily impacts sale of automobiles in two ways: While customers become choosy, aspiration levels escalate in terms of taste, comfort and features. The auto industry could benefit from a portfolio of cars in the mid to high end of the price pyramid.
An economically evolved consumer would only bolster the growth of personal care products. FMCG players are eyeing a share of the rising disposable incomes of households by offering products with exotic ingredients like aloe vera. Fabric softeners, hair serums and premium brands of makeup and skin creams are some of segments that could see a growth boom in the coming years. The transformation is aiding the trend of premiumisation and convenience.