bird of gold-report by mckinsey final
TRANSCRIPT
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Bird Of Gold-Report By Mckinsey
The Indian Consumer Market Ayushi KakwaniNishant Dubey
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Experts Speak
• “The Indian consumer is maturing fast, and is upgrading within product segments at a pace
that consumer companies are struggling to keep up with.”
— Subbu Narayanswamy, McKinsey & Company
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What is a consumer market ?
• Market dominated by products and services designed for the general consumer, The consumer market excludes business or government purchases, or other non-personal investments.
• The consumer market pertains to buyers who purchase goods and services for consumption rather than resale
• Industries in the consumer markets often have to deal with shifting brand loyalties and uncertainty about the future popularity of products and services
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Experts Speak
• “Today, the drivers in urban and rural areas are the same — aspiration, quality and price differing only in order.”
— D Shivakumar, Nokia
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Characteristics Of Consumer
• The consumer market pertains to buyers who purchase goods and services, However, not all consumers are alike in their tastes, preferences and buying habits due to different characteristics that can distinguish certain consumers from others
• The characteristics are :1. Demographic Characteristics2. Psychographic Characteristics3. Behavioralistic Characteristics4. Geographic Characteristics
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Experts Speak
• “From pester power, kids have changed their role to becoming influencers. In the older age group, they have actually become consultants, whom parents turn to for advice during the decision-making process.”
— Rajat Jain, Mobile2Win
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Indian Consumers • India has the youngest population profile
• There are a lot of young people, in different income segments and locations, who are influencing their parents' spending, or spending their own money
• The Indian consumption patterns are slowly converging with the impact of globalisation
• The Indian consumer is now spending more on consumer durables, apparel, entertainment, vacations and lifestyle and other related activities
• The rate of growth of spending on discretionary items has been growing at an average of 9 per cent per year over the past five years.
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Indian Consumer Market
• Global corporations view India as one of the key markets from where future growth will emerge.
• The growth in India's consumer market will be primarily driven by a favourable population composition and rising disposable incomes
• India's consumer market till now was broadly defined as a pyramid; This pyramid structure of the Indian market is slowly collapsing and being replaced by a diamond
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Experts Speak
• “There is a new normal in the Indian consumer market today.”
— Ishan Raina, OOH Media
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Decoding The Empowered Indian Consumer
• The Indian consumer market is drawing global attention not just because of its promise of sheer volumes but also because of the tectonic shift happening in the nature of demand
• The result of this flux is a new Indian consumer who is more discerning than ever, ready to place his money on brand, quality and convenience and eager to explore the organized retail market.
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Decoding The Empowered Indian Consumer
• Aspiration for a better life
• Value and innovation
• The brand conscious consumer
• Growth in consumption
• Organized retail
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Number Of Households By Annual Income
deprived aspirers seekers strivers globals
101.1 91.1
10.9 2.4 1.2
74.1 106
55.1
5.5 3.3
49.9
93.1
94.9
33.19.5
2005 2015 2025
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Share Of Population In Each Income Bracket
1985 1995 2005 2015 20250%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of Population in each income bracket
Glbals StriversSeekersAspirersDeprived
Year
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2005 2015 20250
10
20
30
40
50
60
70
80
Aggregate disposable income(trillion INR)
globalsstriversseekersaspirers deprived
2005 2015 20250
10
20
30
40
50
60
70
80
90
100
Aggregate consumption (tril-lion INR)
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Microwave Ovens Air Conditioners TVs Refrigerators Washing Machines0
20
40
60
80
100
120
4030 27 30 35
Korea's LG Electronics Share of the Indian Appliance Market (2006)
OthersLG
Perc
enta
ge
India Japan China0
10203040506070
61 5735
Personal Consumption as % of GDP (2006)
Personal Consumption
% o
f GD
P
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Average Household Disposable Income
1 2 3 4 5 6 7 8 91960
1970
1980
1990
2000
2010
2020
2030
1985
1990
1995
2000
20052010
2015
2020
2025
Household Income
Percentage
Year
3.6%
5.3%
Actual
Forecast
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Share of average household consumption
Food,beve
rages a
nd tobacc
o
Apparel
Housing and utiliti
es
Household pro
ducts
Personal p
roducts
and servi
ces
Transp
ortation
Communication
Education and re
creation
Health ca
re0
20
40
60
80
100
120
140
160
180
2025201520051995Pe
rcen
tage
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Conclusion
• Indian market undergoes a paradigm shift due to India’s rapid economic growth and favourable demographics
• The upcoming changes in the Indian consumer market will create major opportunities and challenges for Indian and multinational businesses alike
• Growth in Indian incomes and consumption will also deliver extensive societal benefits
• Indian consumer market is becoming increasingly sophisticated and brand conscious
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Conclusion
• Rising Incomes will lift 291 million out of poverty and create 583 million-strong middle class
• India will be the 5th largest Consumer Market by 2025
• Middle class growth will spread beyond top tier countries
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During the first millennium AD, merchants referred to India as the "Bird of Gold" due to the glittering dynamism of its market. Over the next two decades, that bird may take flight once again.
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Bibliography
• India Consumer Report- Mc-Kinsey Report
• Indian Consumer- Roundtable report
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