The Great Indian Market

Results from the NCAER’s

Market Information Survey of Households

In association with
Business Standard

August 9, 2005
 Key Findings

The rapid rise in incomes will lead to an even faster increase in

demand for consumer durables and expendables

As a result, the ownership of goods will also go up significantly

What will power this is the increased usage in different income

classes

coupled with the rise in the size of the Great Indian Middle Class
 Demand of Consumer Durables
(Figures in '000)

1995-96 2001-02 2005-06 2009-10

Cars 276 788 1,560 3,466

Motorcycles 760 2,599 4,663 8,369

CTV Regular 1,785 4,580 6,295 9,957

Refrigerators 1,850 3,006 4,335 6,774

White Goods 3,437 6,024 8,727 13,149

Demand of Consumer Expendables
(Figures in 000 tonnes)

1995-96 2001-02 2005-06 2009-10

Edible Oil 4,582 6,977 8,514 10,586

Shampoos 7 21 33 50

Washing
Powder 1,190 1,977 2,596 3,364
Penetration of Consumer Durables
(Number of households owning goods per '000 households)

1995-96 2001-02 2005-06 2009-10

Cars 16.1 30.0 50.2 91.4

Motorcycles 29.3 70.8 147.6 282.6

CTV Regular 72.0 145.6 213.0 314.0

Refrigerators 86.1 134.0 160.7 224.9

White Goods 149.4 247.1 319.1 451.7

 Penetration of Expendables
(Number of households using consumables per '000 households)

1995-96 2001-02 2005-06 2009-10

Edible Oil 912.7 998.3 999.0 999.6

Shampoos 182.1 391.7 480.7 583.2

Washing
Powder 607.4 693.0 745.6 809.6
 Income Groupings and Ownership
(Ownership per household, 2001-02)

Annual Households Two CTV Ref AC Car

household (Million) Wheeler
Income
('000)
Deprived <90 135.4 0.07 0.05 0.04 0.00 0.00
Aspirers 90-200 41.3 0.47 0.40 0.34 0.02 0.04
Middle Class 200-1,000 10.7 0.70 0.73 0.62 0.15 0.32
Rich > 1,000 0.8 0.71 0.99 0.74 0.43 0.83
Total 188.2 0.20 0.17 0.14 0.01 0.03
 Growing Prosperity - All India

1995-96 2001-02 2005-06 2009-10

<90 1,31,176 1,35,378 <90 1,32,249 1,14,394

91-200 28,901 41,262 91-200 53,276 75,304

201-500 3,881 9034 201-500 13,183 22,268

501-1,000 651 1712 501-1,000 3,212 6,173

1,001-2,000 189 546 1,001-2,000 1,122 2,373

2,001-5,000 63 201 2,001-5,000 454 1037

5,001-10,000 11 40 5,001-10,000 103 255

10,001+ 5 20 10,001+ 52 141

Income figures in ‘000 per annum at 2001-02 prices, households in ‘000 numbers
 Key Findings

Rural markets will increase in importance

How do middle class consumers in the rural India

differ from their urban counterparts, and how will
this change in the years to come?

Do consumption patterns differ across occupation

groups in urban and rural areas as well?
Rural Demand- Consumer Durables
(% of All India)

1995-96 2001-02 2009-10

Consumer Durables
Scooters 33.1 39.4 39.9
Motorcycles 47.3 39.8 48.3
Mopeds 52.7 58.2 57.7
Cars/Jeeps 2.1 8.0 10.9
Automotives 37.9 36.0 37.9
Television 54.0 54.5 44.2
White goods 23.8 23.9 23.7
Fans 50.0 56.9 56.7
Low cost items 58.1 60.1 61.3
Rural Demand- Expendables
(% of All India)

1995-96 2001-02 2009-10

Consumer Expendables

Edible oil 64.3 67.1 62.9

Health
beverages 28.6 27.3 28.1
Packaged
biscuits 36.0 42.8 30.3

Shampoos 27.2 31.9 33.0

Toilet soaps 49.8 52.5 54.7

Washing cakes 68.7 71.4 75.6

Washing
powder 50.4 50.8 54.9
Urban-Rural Usage Pattern in Middle Income Group
(Per 000 Households)

Consumer Durables
Urban Rural
2001-02 2009-10 2001-02 2009-10
Motorcycle 134.3 320.7 109.0 250.9
Television 942.8 1258.9 616.3 561.3
Car 31.4 52.2 1.6 3.5

Consumer Expendables
Urban Rural
2001-02 2009-10 2001-02 2009-10
Edible Oil 1000.0 1000.0 1000.0 1000.0
Shampoos 827.8 1000.0 354.5 458.4
Washing Powder 904.7 1000.0 775.4 946.9
 Ownership Pattern across Occupational Groups
(Per 000 Households)

Two Wheelers
Urban Rural
2001-02 2009-10 2001-02 2009-10
Salary Earner 495.0 834.0 286.0 755.0
Professionals 859.0 1539.0 521.0 1354.0
Televisions
Urban Rural
2001-02 2009-10 2001-02 2009-10
Salary Earner 1080.0 1452.0 744.0 1056.0
Professionals 1128.0 1759.0 929.0 1201.0
 Key Findings

Do consumption patterns differ across towns of different sizes as well

and how is this likely to change over the next few years?

How do consumption patterns vary across the top cities?

How important are the top cities in the demand for major durables
today?

Do more Mumbaikars own cars than Delhi-ites? How does the usage
of durables differ across cities?
 Ownership Pattern by Size of Town
(Per 000 Households)

Town Size Two wheeler White goods Television Low cost goods
>50 lakh 382.02 1149.95 1185.49 4150.19
10-50 lakh 627.02 970.91 792.01 4825.13
5-10 lakh 504.19 756.54 845.5 4419.35
< 5 lakh 346.07 427.68 682.53 3837.46
Household Expenditures Across Top Cities
(Proportion of total expenditure in households earning
over Rs 3 lakhs per annum)

Cities Health Outdoor eating

Vijayawada 4.6 3.3
Indore 7.7 4.4
Bangalore 8.2 3.3
Chennai 5.2 4.9
Delhi 6.3 4.8
Mumbai 3.3 3.8
Ahmedabad 6.9 5.1
Kolkatta 4.1 5.1
 Share and Usage Pattern of Top 67 Cities in 2001-02
(Ownership in per ‘000 households; share of stock in percent)

Durables Usage Pattern Stock

Top 67 Cities All India (% Share)
Scooter 243.2 78.6 44
Motorcycle 138 70.8 27
CTV Regular 486.7 145.6 47
Cars/Jeeps 145.8 30 68
Refrigerators 492.5 134 52
Washing Machines 316.4 72.4 61
Usage of Durables in Delhi and Mumbai
(Ownership per '000 household)

Cars Washing Machines

Income Class
(Rs. 000) Delhi Mumbai Delhi Mumbai

<90 0 0 29.2 29.4

90-135 80.3 67.8 224.8 221.5

135-180 163.2 226.3 503.2 647.9

180-300 272.7 391.6 616.1 703.8

>300 526.8 597.1 822 857.6

Total 301.0 212.1 574.9 422.3

 Key Findings

Does it make more sense to target a marketing

plan for refrigerators at two wheeler owners as
compared to those owning TVs or even ACs?

Who buy second hand goods in India and in which

products are they more widely preferred?
Ownership of Refrigerators by those owing other Durable
(Percent of households owing various durable)

Durables All India Urban Rural

Two wheelers 21.8 31.3 9.2
Cars/Jeeps 83.8 89.0 17.1
Televisions 26.3 36.7 8.7
AC 85.9 88.2 31.7
Cellphones 64.5 80.4 35.8
Credit cards 12.9 36.1 4.0
Share of Second Hand Goods in 2001-02
(% of total purchase)

Urban Rural

Scooters 11.2 16.3

Motorcycles 4.5 12.5

Color TV 1.8 3.0

Refrigerators 4.0 2.3

Washing Machines 1.4 5.6

Thank You