MUMBAI: Even as the world economy struggles and many developed countries are trying to alter their consumption through austerity drive, India could end up as the third largest consumer economy by 2025 according to a report by the Boston Consulting Group (BCG).
Consumption in India is set to triple to $4 trillion by 2025 as rising affluence drives changes in consumer behaviors and spending patterns that have big implications for companies, the BCG report --Center for Customer Insight (CCI), The New Indian: The Many Facets of a Changing Consumer—said. “Nominal year-over-year expenditure growth of 12% is more than double the anticipated global rate of 5% and will make India the third-largest consumer market by 2025,” it added.
“India’s consumer market is poised for fundamental change,” said Nimisha Jain, a BCG partner and report coauthor. “As the consumer market continues to grow and evolve, companies will need to shed conventional wisdom, try multiple business models simultaneously, and be prepared for rapid change internally to adapt to changing consumer needs and behaviors.”
“A set of emerging social trends could reshape consumption patterns significantly,” said Abheek Singhi, a BCG senior partner and report coauthor. “These include more—and better educated—women taking their rightful place in society, greater pride in being Indian, and increasing time compression, each of which will drive exponential growth in various categories differently.”
According to the report in addition, the internet is an increasingly pervasive factor in India’s commerce, and its influence will only expand. Online spending is taking off: in the past three years, the number of online buyers has increased sevenfold to 80 million to 90 million. Digital’s influence on broader consumer spending is significant and growing rapidly. Digitally influenced spending is currently about $45 billion to $50 billion a year, and that figure is projected to increase more than tenfold to $500 billion to $550 billion—and to account for 30% to 35% of all retail sales—by 2025. As a result, omnichannel interaction is more and more important, but its significance varies by category. Consumers’ purchase pathways also are increasingly complicated.
Source: economictimes.indiatimes.com