The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Euromonitor International predicts that India will be the fastest-growing major economy in 2017. India was the world’s sixth largest consumer market in 2016 in US$ terms and we predict it will move up to third place by 2030, ahead of Japan and Germany.
The Consumers team turn the spotlight onto India, from the Digital Consumer, Households, Income and Expenditure, Lifestyles and Population angles. Insights include a polarised consumer market as a result of growing income inequality, an interest in natural products by Indian consumers and a demographic dividend driven by a youthful population, which will result in the largest working-age population globally by 2030.
Despite an increase in network investment by the government and private operators, India trails other markets in terms of digital connectivity. These challenges, coupled with a large informal retailing sector and a strong cash culture, continue to hold back digital commerce uptake. In fact, India ranks last out of 50 nations in Euromonitor International’s Digital Consumer Index. However, the country’s huge youth population, growing smartphone base and mobile internet coverage, and expanding online shopping culture are expected to drive digital commerce growth.
The November 2016 demonetisation policy, which aimed to strip cash out of the economy, provided an initial boost to digital commerce as the prevalence of digital wallets became more ubiquitous. More importantly, it has inspired technology vendors to construct an ecosystem that will better support card-based payments. The launch of new mobile payment applications will propel mobile-based purchases, with this small-screen device outpacing the expected spend by other device types in the forecast period.
Source: Euromonitor International from trade sources/national statistics
Note: Figures for 2017-2020 are forecasted
Despite India’s strong economic performance and progressive reformist policies, the country’s rural areas remain blighted by poor access to water. With one of the largest rural markets in the world (180 million rural households in 2016), India has become extremely attractive as a destination for domestic appliances. However, as only half of the country’s homes have access to water supply, kitchen durables and bathroom goods have limited appeal. This is a major bottleneck for white goods such as washing machines, dishwashers, showers and baths, which are sold locally by brands like Siemens, Bosch, Whirlpool, and Haier.
Nonetheless, the growth of the country’s large middle class and continued expansion of urban hubs has driven uptake of water-dependent durables. For example, over 2011-2016, India was the fastest-growing market for retail sales in Asia for white goods manufacturer Whirlpool, which has a large line of washing machines, tumble dryers and dishwashers.
Note: Figures represent US$ retail value, constant terms
India has the world’s sixth largest consumer market with total consumer spending exceeding US$1.3 trillion in 2016. Income and consumer expenditure in India have been rising steadily on the back of the country’s strong economic expansion. However, the majority of the population remains on low incomes and with little wealth while the income gap is also widening:
Source: Euromonitor International’s Income and Wealth Distribution Model
Note: Data for 2030 are forecast. Data are in constant 2016 prices.
While usage of herbal and Ayurveda products has been closely linked with traditional Indian lifestyles for centuries, in recent years growing awareness of product formulation, linked with a desire to avoid potentially hazardous chemicals, has solidified interest in natural products among Indian consumers. Indeed, trust in “natural” labels is widespread; over 60% of Indian respondents to Euromonitor’s 2016 Global Consumer Trends survey agree that they find “natural” to be a trustworthy product label. In some categories, Indian consumer interest in natural product features is even greater than their desire for a strong or well-known brand name, with a commensurate willingness to pay more to avoid chemicals (71% of Indian respondents define “natural” as “chemical free”).
Many brands and retailers, both local and multinational, are moving to capitalise on this trend by offering products with traditional herbal and Ayurvedic ingredients to the Indian market. For example, in late 2015, Unilever acquired Ayurveda-centered brand Indulekha to better align its local strategy.
Source: Euromonitor International Global Consumer Trends Survey, 2016
India is home to 17.6% of the global population and is set to overtake China to become the world’s most populous country in 2025, reaching 1.5 billion in 2030:
Source: Euromonitor International’s Future Demographics Model
Note: Data for 2017-2030 are forecast.
Read more about Indian consumers in the following Strategy Briefings: