Home / Knowledge / News / Apparel/Garments / Consumption in India to touch $4 trillion by 2025: Report
Consumption in India to touch $4 trillion by 2025: Report
22
Mar '17
Courtesy: BCG
Courtesy: BCG
Consumption in India is likely to triple to $4 trillion by 2025 as rising affluence drives changes in consumer behaviours and spending patterns, according to a recent report. Nominal year-over-year expenditure growth of 12 per cent is more than double the anticipated global rate of 5 per cent and will make India the third-largest consumer market by 2025.

A report 'The New Indian: The Many Facets of a Changing Consumer' released by The Boston Consulting Group’s (BCG) Center for Customer Insight (CCI), says that the elite and affluent income segments will constitute 40 per cent of all spending by 2025, resulting in the wealthy representing the largest consumption segment for the first time.

Emerging cities (those with populations of less than 1 million) will be the fastest growing and will constitute one-third of total consumer spending by 2025. The report adds that digital channels will influence 30 to 35 per cent of all retail sales by 2025 and 8 to 10 per cent of retail spending will be online.

"India's consumer market is poised for fundamental change. As the consumer market continues to grow and evolve, companies will need to shed conventional wisdom, try multiple business models simultaneously, and be prepared for rapid change internally to adapt to changing consumer needs and behaviours," said Nimisha Jain, a BCG partner and report coauthor.

Among the factors that will shape consumption is India's unique pattern of urbanisation, in which emerging cities are the fastest growing. About 40 per cent of India's population will be living in urban areas by 2025, and city dwellers will account for more than 60 per cent of consumption. Expenditures in these cities are already rising by nearly 14 per cent a year, while consumer spending in India's biggest cities is increasing at about 12 per cent a year. Consumers in these cities behave differently from big-city consumers. They have a strong value-for-money orientation, significant local-culture affinity and a more conservative financial outlook.

Another important trend is shifting family structures. The extended Indian joint family has given way to nuclear households. The proportion of nuclear households, which has been on the rise during the past two decades, has reached 70 per cent and is projected to increase to 74 per cent by 2025. This ongoing shift is significant to marketers because nuclear families spend 20 to 30 per cent more per capita than joint families.

Online spending is taking off: in the past 3 years, the number of online buyers has increased sevenfold to 80 to 90 million. Digital's influence on broader consumer spending is significant and growing rapidly. Digitally influenced spending is currently about $45 to $50 billion a year, and that figure is projected to increase more than tenfold to $500 to $550 billion—and to account for 30 to 35 per cent of all retail sales—by 2025. As a result, omnichannel interaction is more and more important, but its significance varies by category. (KD)

Fibre2Fashion News Desk – India


Must ReadView All

Pic: Shutterstock

Apparel/Garments | On 26th Nov 2020

Bangladesh wants duty-free entry of 42 products into Nepal

Bangladesh has sought duty-free entry of 42 products, including...

Pic: Shutterstock

Textiles | On 26th Nov 2020

Curbs on exports to China may cripple Oz wool industry

The Australian wool industry may witness a crippling effect of...

Pic: Shutterstock

Retail | On 26th Nov 2020

BRC hails UK govt decision to open all retail after Dec 2

In response to Prime Minister Boris Johnson's announcement that all...

Interviews View All

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli, Epson, For.Tex & F.lli Robustelli

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Ajay Ghariwala, Luthra Group

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Sonia Agarwal, Whitenife

Sonia Agarwal
Whitenife

‘The terms eco-friendly and organic are common but everyone perceives them ...

Erwin Devloo,

Erwin Devloo

Picanol develops, produces and markets high-tech weaving machines, based...

Davide Maccabruni,

Davide Maccabruni

Schärer Schweiter Mettler (SSM) manufactures and supplies textile...

Pratik Agarwal,

Pratik Agarwal

Breya is a brand of Indo-Western clothes for women owned by ABP Apparels...

Razvan Popescu, Directa Plus SpA

Razvan Popescu
Directa Plus SpA

Directa Plus is one of the largest producers and suppliers worldwide of...

Michaela Griggs & Peggy Schulz, Barco Uniforms

Michaela Griggs & Peggy Schulz
Barco Uniforms

Founded in 1929, Barco Uniforms started as an apparel company for beauty...

Johan Berlin, Investkonsult Sweden AB

Johan Berlin
Investkonsult Sweden AB

Investkonsult Sweden AB are consultants in the nonwoven and absorbent...

Silvia Venturini Fendi, Fendi s.r.l

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Wendell Rodricks, Wendell Rodricks

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Vaanee Bhatia, Gritstones Clothing

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


November 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search