AUGUST 15, 2017 marks the 70th anniversary of India’s Independence, SANDA puts together factual data, and some key findings for any International Brand exploring to enter the Indian Market.
INDIA, by 2020 & 2022.
By 2020, India will be a population of 1.7 Billion people.
By 2025, 69 cities in India will have a population exceeding one million. For example, considering Bengaluru’s economy, a sizable market of $155 billion in consumption, may turn out to be bigger than Malaysia’s today. Other four metro cities by market size may have annual consumption of $180 billion to $300 billion by 2025
By 2020, the E-Commerce business will rise to $138 billion. This has the potential to drive unprecedented economic growth, create a new market for rural India and side line industries that have reached potential in other regions across globe.
By 2020, 670 million people in India will have internet connection and by 2022, 838.2 million people.
“The STERIOD CALLED JIO”. The boost from 2016 to 2018 is attributed to Reliance JIO offering free internet. This has motivated people in Tier 2 & 3 cities to go online.
By 2020 there will be 526 million smart phone users and by 2022, 696 million Indians will have smart phones.
As of 2017, India boasts 2.39 million high net worth (HNI) individuals and around 1.2 million ultra-high net worth individuals (UHNWI) . Besides, more than 50% of the population already reaching middle class, per capita income and per capita consumption is projected to reach record levels.
As of 2017, women contribute close to 17 percent of India’s GDP while making up just 27 percent of the total workforce against 43 percent globally. In next decade, we project that women will be representatives of one of the most powerful economic forces in India.
The GREAT GOLIATH of an Economy
Government of India & the dynamic Prime Minister Modi is working towards helping as many people as possible to get uninterrupted access to Internet. Also, there is a great synergy of Corporate India + the government together to create a sustainable infrastructure for improving internet penetration and usage. This initiative by public administration along with the businesses in India eager to make their presence felt will make sure the products for people in India would be unique and create a platform in the form of content sharing, comments and videos.
Cascading effect of economic, trade and cultural liberalization has taken millions of Indians from one socio economic class to another in the past two decades. Officially, poverty rate has declined from 45 percent in 1994 to 22 percent in 2012. The new class which we term as upper middle class, wherein people spend between 150 to 700 INR per capita per day, has closed to doubled from 300 million in 2004 to 600 million in 2014.
INDIA: the number 1 Retail & Consumer destination.
Very Recently, India pipped China as the number 1 retail & consumer destination. The launch of RELIANCE JIO moved India up the ranks with lightning speed in the past 12 months and we have the growth numbers of smart phone users and internet connectivity mapped above for 2020 & 2022.
For International brands seeking to penetrate the Indian marketplace, here are three findings from a study conducted in five metro cities in India
1) With rapidly increasing disposable income, availability of International products from Omni Channel means a tectonic shift in spending patterns of consumers. Indians in general are exposed to luxury goods and services due to the Reliance JIO explosion, increase in tourism activities to others countries. Key finding here was that on an average Indian consumers are now aware about International brands thrice the number they were aware in 2015.
2) Another key finding is increase in wealth distribution among tier 2 and tier 3 cities in India. The government policies are conducive to growth of consumer segments in Tier 2 & 3 cities and this market alone is estimated to grow more than 36%.
3) In India, mobile shopping has grown by 121 percent since 2015. The GDP for India is forecasted to grow by 7.4 percent in 2017 and by 7.6 percent in 2018. This will help boost the middle class per capita consumption and thereby increase consumer spending beyond the essentials into International Brands segment. These trends will help organised retail triple in size by 2022.
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Author: Simrita Dhillon, with Kaustubh Shinde (MBA Candidate, MISB Bocconi, Mumbai).