PECULIARITIES & CHARACTERISTICS OF INDIAN CONSUMER

1. PECULARITIES & CHARACTERISTICS OF
INDIAN CONSUMER
PRESENTED BY : ANGELA MARY GEORGE
SEMESTER-II,
MBA (EVENING)
IMK KARYAVATTOM.

2. INTRODUCTION
• With the growth of India’s middle class
and changes in its lifestyle, the quality
and quantity of demand for retail of
foodstuffs and daily goods are
undergoing significant changes. While
traditional Kirana (small shops) hold
sway over the industry, accounting for
more than 90% of the market, modern
distribution stores such as supermarkets
and hypermarkets of local conglomerates
are also expanding rapidly.

3. CONSUMER GROWTH IN INDIA
The Indian economy is changing in profound
ways by the onward march of its “consumers”.
India’s ascendance as an economic power to
reckon with has forced the world to unravel the
mystery called India.
An intriguing element of this mystery is India’s
Consumer Market; characterized by diverse
languages, regions, religions, and economic and
social status.
Consumer growth has, of course, always been a
central engine of economic growth, but what is
significant about the past decade is the
acceleration in the pace of change.

4. Why Should Global Businesses Bother With
Consumer India?
India is a ‘guaranteed to happen’ growth
story.
India has a majority of young people and
a virgin market.
Low country risk: political and social
stability.
Strong institutions: strong judiciary,
legislature.
Change confluence: average Indian’s
income is growing, India’s economic
fundamentals are growing stronger

5. Why Should Global Businesses Bother With
Consumer India?
Rural India is decreasing its dependence on
agriculture, the self employed population is
making India a nation of vibrant achievers.
China 2005=India 2015. Researchers
predicts that India will have the same per
capita income that China has in 2005 after
8 years.
India is amongst the better destinations
globally for investments and business.
India is set to grow into the fifth largest
consumer market in the world by 2025.

6. RAPIDLY GROWING SECTORS IN
CONSUMER INDIA
INFORMATION TECHNOLOGY &
COMMUNICATION INDUSTRY
AUTOMOBILE INDUSTRY
E-COMMERCE INDUSTRY OR ONLINE
SHOPPING
RETAIL INDUSTRY
INDUSTRIES UNDER WOMEN
EMPOWERMENT.
INDIAN FAST MOVING CONSUMER
GOODS (FMCG) INDUSTRY

7. INDIAN CONSUMER MARKET TODAY
It is a market with three segments :
The first comprises the top end with the
mindset: “I pay more to get more”, where
the purchase is driven by the emotional
surplus that the consumer experiences.
The second is the mid-level which thinks: “I
get good value at a reasonable price”.
More important, however, is the large block
at the bottom which says: “I pay less and I
get less” and is totally satisfied with that.
This is probably a segment that many
marketers tend to overlook since they feel
that there is no existing demand there.

8. INDIAN FAST MOVING CONSUMER GOODS
( FMCG)
FMCG’s are products that are sold quickly and
at relatively low cost. Examples include non-
durable goods such as soft drinks, toiletries and
grocery items.
India’s rising affluence will drive the growth for
FMCG firm over the next several years.
Demand will grow by a strong 11-12% p.a.
Rapid growth in India’s toiletries and cosmetic
market will create opportunity for new players.
Foreign firms that can add localization in their
health and beauty products and leverage
international expertise and well known brand
names, will continue to have a competitive edge
over domestic players.

9. INDIAN FAST MOVING CONSUMER GOODS
(FMCG)
The industry has tripled its size over the
past 10 years growing much faster than in
recent decades. This has been facilitated
by the many changes in the Indian
economic and industrial landscape -
reduced levels of taxation, easier import
of materials and technology, reduced
barriers to entry of foreign players,
growing organizational maturity of
Indian players, growth of media, and, of
course, the growing affluence and
appetite for consumption of the Indian
consumer.

10. INDIAN FAST MOVING CONSUMER GOODS
(FMCG)
The market for cosmetics and toiletries and
other personal care items is concentrated,
with a few well-known brands dominating
sales of shampoos, hair conditioners, Make-
Up, fragrances and personal hygiene
products. Growth in demand for most of
these products is expected to be rapid in
2011-15, leaving scope for new companies to
make inroads into the current market
leaders’ dominance. Men’s grooming
products, such as skin lightening creams,
deodorants, facial cleaners and so on is an
area that is showing steady growth.

11. ONLINE SHOPPING IN INDIA
On-line shopping is a recent phenomenon in
the field of E-Business and is definitely
going to be the future of shopping in the
world. Most of the companies are running
their on-line portals to sell their products /
services on-line. Though online shopping is
very common outside India, its growth in
Indian Market, which is a large and strategic
consumer market, is still not in line with the
global market. As truly stated “Customer is
the King today”, the concept of on-line
shopping will not materialize if the
customers are not benefited

12. ONLINE SHOPPING IN INDIA
ADVANTAGES
Customers can shop from any place and need not physically
visit the shops/outlets for shopping purposes. Therefore, even if
customer is staying in remote area, he/she can easily shop
through internet.
If a customer goes to any retail outlet or any other shop, the
choice of products is normally very limited. However, here
customers can visit any number of sites to reach at final choice.
Hence, online shopping provides unlimited choices to the
customers in nut shell.
The customer can shop any day of the year on any time of the
day. This also helps in customers’ time and energy saving. More
over due to unlimited choice and less excess time, customers can
easily search for the desired things and can easily compare the
products/items.

13. DISADVANTAGES
As customer has unlimited choice, he/she can fall
a victim to over choice. Customer may spend a
good amount of time without taking any final
decision.
There is no “touch and feel factor” involved in on-
line shopping.
It is very much possible that customer purchases
from internet by just looking at price, but
ultimately may land up paying more due to
transaction cost. Thus, these extra costs become
very crucial in online shopping.
One of the major options to purchase from
Internet is through credit cards. However, it is
quite possible that customers may fall victim due
to security and privacy problems on the Internet.
ONLINE SHOPPING IN INDIA

14. INDIAN RETAIL INDUSTRY
For many foreign companies, the opportunity to
capture a share of India’s rapidly growing retail
sector is the most compelling reason to explore
options for exporting to and investing in the
country. With more than a billion potential
consumers, a growing middle class, steadily rising
household income, and an organized retail market
valued at more than US$30 billion, India’s retail
market is among the most underpenetrated and
promising in Asia. According to some analyses,
increasing income levels combined with moderating
savings will cause India’s consumer market to
quadruple over the next two decades.

15. INDIAN RETAIL INDUSTRY
Despite the rosy hopes, some facts have to be considered to
positively initiate the retail momentum and ensure its sustained
growth. The major constraint of the organized retail market in India
is the competition from the un-organized sector.

16. PECULARITIES OF INDIAN CONSUMER INDUSTRY
Burgeoning middle class, its changing
values and pent up consumer demand.
Changing women's roles, their labor
participation and the changing structure of
the family.
Rising consumer aspirations and
expectations across many segments of the
population.
Increased consumer spending on luxury
items aided by past savings and the
introduction of the credit system.
New types of shopping environments and
outlets
Media proliferation, satellite and cable TV,
and the thriving film industry

17. Media proliferation, satellite and cable TV, and
the thriving film industry.
Media sophistication and familiarity with
English language among media people and a
wide segment of the population.
High degree of consumer awareness and
sophistication across different segments.
The emergence of traveling Indian consumers
immigrants in US and England, overseas
workers, tourists, professionals and their
exposure to world-wide consumer products.
Strong domestic consumer goods
manufacturing sector
The emergence of the rural consumer sector.
PECULARITIES OF INDIAN CONSUMER INDUSTRY

18. CONSUMPTIONAL & CHARACTERISTIC
TRENDS IN INDIAN CONSUMERS
1. ECONOMIC GROWTH AND RISING
DISPOSABLE INCOMES
• India is growing at an average annual rate
of 7.6% for the past five years and it is
expected to continue growing at an equal if
not faster rate. The rapid economic growth
is increasing and enhancing employment
and business opportunities and in turn
increasing disposable incomes Extreme
rural poverty has declined from 94% in
1985 to 61% in 2005 and is projected to
drop to 26% by 2025.

19. CONSUMPTIONAL & CHARACTERISTIC
TRENDS IN INDIAN CONSUMERS
2. PRO-GROWTH DEMOGRAPHICS
In India, the proportion of citizens of working
age is forecast to fall slowly and the
overall labor force will continue to grow.
India has a young population, 54% of
Indians are under 25 years of age. A
young, economically empowered
population not only translates into
increasing consumer demand but also
into a more value-conscious demand.
Thus, pro-growth demographics will
expand consumer market in India.

20. • ASPIRATION FOR A BETTER LIFE
• As millions of economically deprived
households move into the lower strata of
the middle class segment, they will begin
to be able to afford and demand products
and services beyond food and clothing.
Increasing penetration of media and
infrastructure facilities will expose the rural
India to urbanized lifestyle and fuel the
latent desire for improved living standards
CONSUMPTIONAL & CHARACTERISTIC
TRENDS IN INDIAN CONSUMERS

21. CONCLUSION
• The Indian consumption patterns are
slowly converging with global norms. The
Indian consumer is now spending more on
consumer durables, apparel,
entertainment, vacations and lifestyle
related activities. Entertainment, clothing
and restaurant dining are categories that
have been witnessing a maximum rise in
consumer spending since 2002.