Changing Lifestyle: Indian Consumption Story – 4
(Image used for illustrative purpose only)
Recently, I had a unique experience. A 22-year old colleague of mine was seen with one of oldest feature phones. On being asked why, she informed that she had lost her IPhone and is saving her salary for three months to buy a new IPhone. I, aware of her family background, enquired with her about reasons that she wants to spend Rs. 70,000 on a new phone when her total family income was less than that amount. She just smiled.
Aspirations, speed of life, thirst for better acceptance, exposure to rich lifestyle through Internet & television, increasing incomes, shrinking family sizes are fueling India’s higher consumption besides government policies, urbanization and lower average age. The consumption story is growing so fast that India expects to double her GDP in next seven years! In Indian stock markets, the shares of companies who are dependent on Consumption Story have appreciated faster than average. Most Mutual Funds are flush with shares of such companies in their Funds. Any Company with consumer brands finds it easier to market its IPO easier.
This is the story of upward socio-economic mobilization. There is no doubt that the rich are getting richer and the economic divide continues to be a major social issue. But bottom-of-the-pyramid are benefited by government policies, poor are migrating to lower middle class, those in lower middle class are converting to higher middle class. This march is getting momentum.
Though India is urbanizing herself rapidly, a major portion of Indian population still resides in rural India, and everybody is eyeing the next wave of growth to rural households. It was a pleasant surprise to see the stock of a typical Indian farmer rising during my recent visit to a village in Maharashtra. Dish TV antennas, refrigerator, mobile phones, packaged foods, urban-like clothing, tractors, two-wheelers, painted homes, etc. were a common sight. If food consumption pattern is another important barometer of individual welfare and well-being in any region, then rural India is not very far behind.
I know that some of the readers will say that rural India is still reeling under several socio-economic issues. Yes, it is. But I prefer to see the glass half-full.
In the end, I would say that Indians are successfully fighting for better living standards. The recent commentary in The Economist is lopsided and unidimensional to me. So long as I see more and more middle-class families flying to their holiday destination or I see more urban housewives using Surf or Ariel while washing clothes in a washing machine or I see more girls going to colleges on their two-wheelers, etc. I see tremendous scope for India.
After all, India is a nation of approximately 600 million middle-class citizens including over 160 million in upper-middle class. This class is just about beginning to assert itself. Their consumption is a mere reflection. Their changing lifestyle is a mere statement.