 |
| India has huge potential for consumption growth. (Source: Getty) |
India is set to become the world's third largest consumer market by 2027 thanks to a booming middle and upper class, according to a recent report by research firm BMI.
Currently, the South Asian nation is ranked fifth after Japan, China, the European Union (EU) and the United States. However, the company, which is controlled by Fitch Solutions, forecasts that the country's spending and consumption will increase by 29% over the next two years, helping the world's most populous country move up two places in the above ranking.
To achieve this, India's consumption growth rate is expected to "surpass" some other developing economies in Asia such as Indonesia, the Philippines and Thailand.
BMI estimates that household spending in India will soon cross the $3 trillion mark as disposable incomes grow at an annual rate of 14.6% through 2027. By then, about 25.8% of households nationwide will have an annual disposable income of at least $10,000.
“A majority of these households are concentrated in economic hubs such as New Delhi, Mumbai and Bengaluru. This makes it easier for retailers to build key market strategies,” the report said.
A young population is also helping to boost consumption in Asia’s third-largest economy. About 33% of the country’s population is between the ages of 20 and 33, and BMI predicts that electronics will be a “magnet” for this demographic.
BMI forecasts that media spending will grow at an average of 11.1% per year to $76.2 billion by 2027 as young people in urban areas, with rapid access to technology and abundant income, will increase spending on entertainment products, typically electronics.
India's rapid urbanization also contributes to this success as businesses can easily reach consumers through a wide sales network.
In April 2023, Apple opened two stores in Delhi and Mumbai. Its rival Samsung also revealed plans to open 15 premium experience stores across India by the end of this year, located in major cities such as Delhi, Mumbai and Chennai.
BMI revealed that global investors such as Blackstone Group and APG Asset Management have "poured" money into a number of businesses that own many shopping mall chains to anticipate the trend of consumer growth.
Source
Comment (0)