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Let’s go to India, but where?

, April 21, 2015, 1 Comments

Let’s-go-to-India-but-where-MarketExpress-inIndia is not one unified market; rather it is a basket of numerous markets with different tastes, choices and preferences. Unless it has a ‘Maggi’ to sell, the marketer should be certain of which of the 670+ different markets it plans to target. The pattern of wealth distribution and income inequality adds to the diversity of tastes and choices. Even a pan India Goods and Services Tax (GST) would not overcome such a diverse universe of ‘markets’.

Based on the wealth distribution pattern, the districts (the basic unit of demand) can be classified into three categories of – ‘Crust’, ‘Core’ and ‘Base’. 72 million (29%) of the total Indian households inhabit the ‘Crust’ category. ’Crust’ is the fountainhead of demand and the focus of attention for marketers. The bottom rung of ‘Base’ has 71 million households spread across 201 districts, with least concentration of wealth and consumption demand.

Hotspots of future

Who continues to fire the growth engine of consumerism, going ahead – would it still be the ‘Crust’ or would there be a new set of centers joining them?

These have to be the centers which have a high populace with the potential to move to the next higher level of prosperity. These centers (represented in the map) would be from the ‘Crust’ and also from outside of this category. In a growing economy like India, which also has the advantage of being a democracy, there is an opportunity for every section of society to grow. While the upper middle and richer sections (11.5 million households) will contribute incrementally to the demand growth, the real push will come from the vast number of aspiring middle class and the lower middle class, who are striving to move on to the next higher level of prosperity. This is true not only for the next quinquennium for but also for next few decades.

50-100 million households are aspiring to join the middle income group over next decade. These new entrants to the middle income group are the ones that would deliver the high impact consumption demand in future.

India is not a homogeneous mass of consumers

For an outsider, India is a market of 1.21 billion people, who are waiting to be served. As an informed observer, it would be perilous to assume that. Yes, India is growing. But a large chunk of the pie is the base of the pyramid (BOP). The base is shrinking and people are getting richer, but it will be some time before this becomes an addressable segment for a mid-market player.

Till then, over 95 million middle income and richer individuals spread across 20 million households will power the consumption engine. There has been major growth in rich and upper middle income groups in urban India in the last decade, swelling from less than a million to 9.6 million households. This coincides with per capita consumption more than doubling in the decade.

Identifying and targeting the right geographical and wealth segments would be the key to success in the diverse and heterogeneous Indian market.

Are you ready!!!


Each household on average has 4.9 individuals

  • PVRajeevS

    India may be diverse but the entire nation falls under one Central Government Budget, one common monetary policy; it has a common foreign trade policy; it is governed by one constitution; it has one law making Parliament……..