ISLAMABAD: A new report has estimated that nearly a billion Indians lack the financial means to purchase discretionary goods or services, despite India’s population of 1.4 billion, according to BBC.
The report, compiled by Blume Ventures, a venture capital firm, reveals that India’s consumer base—essentially the potential market for start-ups and businesses—is comparable in size to Mexico, at approximately 130-140 million people.
Furthermore, another 300 million people are considered “emerging” or “aspirant” consumers. These individuals have just started to open their wallets but remain hesitant to spend.
The report highlights that India’s consumer market isn’t expanding as much as it is “deepening,” meaning that while the wealthy are growing wealthier, the number of affluent individuals is not increasing significantly.
The trend of “premiumisation” is evident, with brands focusing on high-end products and catering to the wealthier population, rather than targeting mass-market segments. This shift is reflected in the rising sales of ultra-luxury homes and premium smartphones, while lower-end products struggle to gain traction.
Additionally, affordable housing now accounts for just 18% of India’s market, down from 40% five years ago. Meanwhile, branded goods are commanding an increasing share of the consumer market.
The report supports the long-held view that India’s post-pandemic recovery has been K-shaped, where the wealthy have seen their purchasing power grow, while the less affluent have experienced a decline in spending ability.
