The last couple of years have seen stupendous growth in spending by the middle class. Going by the just-released McKinsey report, number of wireless subscribers has gone up by 68% to 166 million between March 2006 and this year March. [Left image source]
This is a sure indication that more and more people are becoming sufficiently mobile so as to feel its need. Not surprisingly, all telecom companies, especially Bharti Airtel and R-Com have posted fantastic results for the last year.
Another indication of middle class’ growing purchasing power is the crossing of magic figure of 1 million in car sales in 2006-07. The McKinsey report reveals similar other marvels regarding India’s economic progress in the past 2 years.
At present India is the 12th largest consumer market in the world. Its economy has grown at an average of 8.6% in the past 4 years, and the current financial year, according to RBI, will see 8.5% growth.
By all accounts, India’s booming middle class is fuelling this growth, and as more and more households come within its ambit, the country may surpass Germany by 2025 to become the 5th largest consumer market.
It is expected that the middle class will grow ten times to about 583 million by 2025.
Among other findings in the report is the possibility of transport and healthcare gaining prominence while the combined spend on food, tobacco and beverages slips to 25% from the present 42% of the total.
The potential is huge, and here is what a McKinsey official has to say:
The upcoming changes in the Indian consumer market offer substantial opportunities and challenges for Indian and multinational businesses.
Sunny days are here to last for a long, long time indeed.
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