A series of macro insights into India's consumer market. Given recent elections, there is optimism that a more business friendly government can help the country fulfil its economic potential. As new opportunities start to open up, this document outlines opportunities and challenges for brands. 'Passage to India' completes our series on the BRICs: documents are also available on Brazil, Russia and China

1. PASSAGE TO INDIA!
7 Insights into the Indian Consumer Market

2. A FRESH START?
Only a decade ago India’s future looked assured.
But recent years have been disappointing: growth
halved, the rupee slumped, inflation and borrowing
ballooned. But two things remain certain – India is a
country of huge potential and also vast complexity.
By 2030 India is forecast to have the world’s largest
middle class consumer market (surpassing China
and the US), alongside a youthful population and
fast rising disposable income – by 2020 India is
forecast to make up 5.8% of global consumer
spending (up from 2.7% in 2012).
Alongside this there is the challenge of how to
make sense of India’s huge diversity: more than 1.2
billion people, spread over 3.2mil square km, with
23 official languages and 8 major religions!
To help you tap into India’s potential we have
highlighted 7 insights we see as key opportunities
in India’s fascinating consumer culture. While there
are levels of complexity and nuance we cannot
capture here, we hope they give you a sense of
some of the shifts shaping India’s future.

3. 7 INSIGHTS – WITH IMPLICATIONS FOR BRANDS – TO
HELP YOU SUCCEED IN INDIA:!
1. Bright, Young Future
2. Generation ‘I’
3. Changing Mindset
4. She-Economy
5. Top of the Pyramid
6. Rural Transition
7. Connected Revolution

4. 1. BRIGHT, YOUNG FUTURE
India has a fifth of the world’s young people and is
set to become the youngest country in the world
by 2020. This youthful generation share much of
the confidence and optimism of other global
Millennials: as they hit prime consumption years
they will significantly reorient the market.
This new generation is increasingly globally aware
– since 1990 the number travelling abroad has
risen sixfold – and no longer mimic their elders: in
an Economist poll of Indian youth, 74% said they
would vote differently from their parents. However,
they still respect many traditions: 64% of Millennial
consumers in India are keen to maintain their
religious observations.
IMPLICATIONS!
Understanding the values, mindset and needs of
young Indian consumers will not only open up
new opportunities for brands, but will lead to a
better understanding of the India of tomorrow.
This is an increasingly globally aware generation,
which expects to have wide choice and brands
that match their high standards.

5. 2. GENERATION ‘I’
Whilst family remains a key part of Indian culture,
there seems little doubt India is becoming more
individualistic in its shopping habits. According to
BCG, discretionary spending on beauty, travel and
social events (weddings / parties) means these are
among the categories that will grow fastest.
For example, we’ve observed changing aspirations
and attitudes in India to ideas of beauty (which had
centered on the face, but now encompasses the
whole body); health (which is becoming more about
being toned & slim than rounded & well fed); and
fashion (with the middle class seeing looking good as
important, rather than frivolous). The focus is on
helping individuals make the most of themselves.
IMPLICATIONS!
India is seeing a shift from household family
purchases to more individual, indulgent shopping; the
number of single-member households has more than
doubled in the last 10 years to 4%. As India moves
towards the levels of China and Brazil (c. 9%) expect
to see an increasing consumer focus on categories
that promise personal fulfillment.

6. 3. CHANGING MINDSET
Indian culture traditionally valued the intrinsic
qualities of knowledge, simplicity & restraint. With
economic liberalisation this mindset began to shift
– especially amongst the younger generation – to
more extrinsic values like action, winning and glory.
According to Dheeraj Sinha, author of ‘Consumer
India’, this shift from a spritual (Brahminical)
approach to the more warrior (Kshatriya) approach
is ‘the cultural engine of India’s economic charge’.
It is exhibiting itself in the rapid growth of
categories like popular culture (X Factor and India’s
Got Talent are hugely popular), sports (IPL cricket
is a star-studded short version of the game) and
even academia (where JNU’s crown as most
prestigious place of learning has been stolen by
the IIM’s promise of high earnings).
IMPLICATIONS!
This shift has changed what is culturally desirable –
consumers’ aspirations, behaviour and everyday
choices are shifting. Brands must understand how
to help consumers express these more externally
focused values – celebrating dynamism & success.

7. 4. SHE-ECONOMY
India continues to be a patriarchal society, with
women’s role often still restricted to the home due to
social customs and low female education levels. The
WorldBank shows that India has the lowest workforce
participation rate of women amongst the BRICs at
only 29% (Russia is 57%; Brazil 60%; & China 65%).
However, changes are happening and positive signs
are emerging. The working woman rate is set to
increase 40% by 2020, there has been a 33% jump in
the number of women who have a savings bank
account in the last decade and income has doubled.
At the same time, the government is expanding
educational coverage, and more women are taking
on professional jobs, leading organisations and
starting businesses than ever before.
IMPLICATIONS!
The growing aspirations and financial independence
of women – not only in urban India but in Tier II and III
cities – mean brands must increasingly look to
understand and target women. Men may have ‘power
of veto’ over larger purchases, but many everyday
purchase decisions are already in female hands.

8. 5. TOP OF THE PYRAMID
The number of ultra-high net worth households in
India is expected to triple in the next 5 years
(Mumbai is among the top 5 ‘billionaire cities’
globally). Although global luxury brands have been
cautious about entering India, Bain estimates the
country’s luxury sector to be close to $6 billion a
year with growth rates of 15-20% a year.
But a recent report identified a new generation of
‘closet consumers’. This substantial segment of
newly wealthy retain a more ‘middle-class
mindset’: they are price-conscious and seek value
even when buying luxury products. Equally, BCG
defines affluent as having a household income of
$18,500 or more pa – still relatively limited.
IMPLICATIONS!
It is important to understand the different attitudes
of the traditional & professionally wealthy; for
example, the latter are often more comfortable
with credit. Equally, there is a big opportunity with
affluent consumers, but brands should recognize
even those near the top of the pyramid have
incomes far below their Western equivalents.

9. 6. RURAL TRANSITION
Rural India accounts for nearly 70% of the country’s
population, but has traditionally been seen as too
poor and too difficult to reach for many companies.
However, incomes and aspirations are growing as
consumption habits increasingly mirror those in
urban areas. Nielsen estimates that rural India’s
FMCG market will touch $100 billion by 2025.
This shift, and its sheer scale, means rural India is a
tremendous opportunity: it already accounts for 40%
of Hindustan Unilever’s business, 30% of Coca-Cola,
and Amul has opened parlours in rural areas which
seem to be outperforming those in urban areas.
IMPLICATIONS!
Rural consumption patterns and aspirations are
changing: brands and premium products are no
longer a novelty. Equally, as ownership of items like
refrigerators grows, new opportunities will open up,
with what were traditionally urban products (such as
chocolates, cheese and pizzas) becoming more
relevant. Companies need to understand how to
penetrate and win in this complex market.

10. 7. CONNECTED REVOLUTION
The number of Internet users in India is expected
to grow from 125 million in 2011 to 330 million by
2016, according to BCG; by 2020, there will be
1.5 billion connected devices and mobile data
traffic will increase twenty fold, helping overcome
many of India’s geographical barriers.
Alongside this, e-commerce in India is expected to
reach around $50-70 billion by 2020. BCG
calculates digitally influenced purchases already
represent $30 billion of consumer spending. This
growth is increasingly fueled by women, who
appreciate the convenience and option to indulge
in more recreational, relaxed shopping.
IMPLICATIONS!
Brands must tap into this connectivity in ways that
are meaningful for Indians and ensure they are
optimised for mobile access. Although e-
commerce accounts for less than 1% of India’s
shopping total, this is growing rapidly – especially
as payment and delivery infrastructure improves.
Brands should explore the opportunities this new
channel offers to influence consumers.

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If you're interested in how we can help you understand how global markets are changing,
and what this means for your brands, we'd be delighted to talk further. If you’d like to
receive our other BRIC ‘Speed Briefings’, or future market updates, just let us know
Tom Ellis
tom.ellis@brandgenetics.com
+44 (0) 7815 896 098
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andrew.christophers@brandgenetics.com
+44 (0) 7967 175 623
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for their support & collaboration
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