India is on the cusp of a tremendous opportunity for both economic progress and improvement in the general well- being of its citizens.
India is currently the world’s sixth largest economy and one of the fastest-growing large countries, with an annual gross domestic product (GDP) growth rate of 7.5%, a momentum that is expected to sustain over the next decade.
What differentiates India from other large economies.
Therefore the structural strengths of Indian Economy are
India is currently the world’s sixth largest economy and one of the fastest-growing large countries, with an annual gross domestic product (GDP) growth rate of 7.5%, a momentum that is expected to sustain over the next decade.
What differentiates India from other large economies.
US, CHINA and INDIA
(Source : World Economic Forum and trading economics.com)
Therefore the structural strengths of Indian Economy are
- Domestic Consumption Driven Economy
- Healthy savings rate; and
- Working age majority
With a median age of 28 years, India is a nation of young working-age persons who drive both income and consumption. It will continue to remain young up to 2030 with a median age of 31 years, compared to 40 years in the US and 42 years in China.
A large Middle Class will drive consumption in India
(Source : world economic forum)
So how will be the consumption pattern in India evolve. So what will be the drivers of consumption in India. The following are the drivers
- Income Growth - which will lead to creation of large Middle Class.
- Steady and dispersed urbanisation - by 2030, 40% of Indians will be Urban Residents.
- Technology and innovation - Internet access will be democratised by 2030 with more than 1 billion Indians – rural and urban, old and young – on the internet, a truly remarkable achievement in terms of inclusion.
- Evolving Consumer Attitudes - The triad of age, education/occupation and connectedness will result in distinct consumer preferences even as income remains a strong determinant of consumption choices.
As all of this factors drive the consumption patterns there will be significant changes in the way consumers will spend the extra monies which they will have - on account of incremental incomes.
One of the major trends expected is the premiumisation.
How and where will Indians spend there money?
(Source : world economic forum)
These patterns will influence the consumer stocks - as they change and adapt to changing consumer preferences.
Business models which are focused and dedicated to understanding customer requirements will tend to do better and create a lot of wealth for their shareholders. So stay invested!!
DISCLAIMER : THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS. PAST PERFORMANCE IS NOT AN INDICATION OF THE PERFORMANCE OF STOCK IN FUTURE.
