THE NEW INDIAN CONSUMER

With India opening its economy in the early 1990’s, many multinational corporations tried to
rush in and pursue the medical class consumers- an estimated figure of about 200 million of
them. They had come into confrontation with the lower income groups, social & political
conservatism and resistance to change. The Indian consumers were hard to win over

Now, we see there has been a substantial shift in their attitudes towards consumerism. The
country’s GDP growth has been a strong factor and reflects India’s current economic
performance with an average annual rate of GDP growth at 8%. Another factor being the
demographic profile of the country, with 1/5th of the world’s population below the age of 20,
belongs to India. Youthful exuberance translates to higher per capita expenditure and higher
consumption expenditure.

To examine the changes in the attitudes of the Indian consumers, Gallup Organization performed
two surveys of more than 2,000 respondents analyzing the evolution of the Indian consumer’s
habits, hopes and plans. The following three key insights were extracted:

1) Indians are getting more materialistic- Indians often stereotyped as spiritual and
uninterested in materialistic values, are now motivated more than ever by personal
ambition and a desire for material success. More than 59% of the urban population of the
country has adopted the “work hard and get rich” ethos, by 2006.
2) Consumerism is becoming a way of life- An analysis of India’s saving goals underscored
the increase in materialism. Travel and entertainment have also gained ground. Among
durable goods, hi-tech luxury goods are also growing in demand. Despite growth in
income levels, the middle-income and lower-income groups are increasingly dissatisfied.
3) Foreign is passé; Indian is paramount- Indians long believed in the overwhelming
supremacy of all things foreign but now the country is at an economic stage, where it is
aggressively promoting “Made In India” campaign. Of the top 20 brands named in a
recent survey, 8 are Indians.

Today, India is open to change but at the same time backs its ability to add new dimensions
without losing the old ones,