During the next decade, consumption in fast-growing consumer markets like China, India, and Southeast Asia will be transformed by the Fourth Industrial Revolution and more than one billion first-time consumers.
India has one of the world’s fastest internet speeds. Consumer expenditure is predicted to double by 2030. With over 1.2 billion internet users, it will remain one of the world’s youngest countries. The new Indian customer will be wealthier and more eager to spend, and she will have very definite tastes, unlike her predecessors.
1. Consumption impacted by digital technology will become the norm.
Even at the same economic level, “connectedness” will create a large variance in choices. Across all income levels, as much as 50-70 percent of the most digitally connected customers utilise digital platforms for product discovery and pre-purchase research. By 2030, more than 40% of all purchases will be heavily impacted by digital technology, up from 20% to 22% currently.
In 2021, the worldwide venture capital investment market was valued at US$ 211.3 billion.
Traditional determinants of preferences have been income and age, but in the future, a consumer’s degree of connectivity to digital media and online platforms will be a major one. At the same income level, the more “connected” consumer (through the internet and smartphone) will spend well, possess durables, premiumize to better items (in accordance with her income), and be well-versed in the brands that best fulfil her requirements. Her less connected counterpart is more likely to save money, possess few durables, and keep purchasing the same things.
2. Technology-enabled new business models will take advantage of people’s natural comfort with ‘usership,’ as well as their desire for more convenience and well-being.
India, being the world’s first usership economy, has a lot to teach the rest of the world. Indians have long preferred public transportation over owning a car, and have equipped their houses with low-cost second-hand goods rather than purchasing new goods. This usership perspective, as well as the tech-savvy of future customers, will be addressed by digital platforms for renting and sharing. Subscription models, such as Bombay Shaving Club, Amazon India Grocery Pantry, and Fab Bag, will cater to the cost-conscious Indian who wants to test out new brands and items for a little monthly fees. The primary objective of the Indian consumer is improved well-being for themselves and their families, which will be fulfilled via digital platforms for health and learning.
The popularity of venture capital investing is growing because it offers investors with above-average profits and aids in the growth of technology.
3. India’s business, policy, and civil society leaders will work together to create an inclusive, healthy, and long-term future for the country.
In the next decade, India will bring a plethora of intriguing commercial options. Simultaneously, the next chapter of India’s economic narrative provides stakeholders with an opportunity to design a path of responsible and equitable growth that other fast-growing economies may learn from. Building on the momentum of collaborative efforts like Skill India and Eat Right India, public-private-civic-society partnerships can help India address three major societal challenges: the need for skills and jobs for its working-age population, greater rural inclusion, and the development of a healthy and sustainable future for its citizens and cities.
4. Home automation is becoming more popular.
Consumers want more technologically sophisticated, user-friendly, and conveniently available solutions. We are lucky to live in a time where technology can assist us, make our lives simpler, and even revolutionise our way of life. The quantity and quality of communication between intelligent devices and people has expanded as AI and IoT-driven products have evolved. The technology we’ve come to expect has paved the road for us to develop even further, and future technologies have the potential to improve our quality of life. According to Statista, the Indian smart home industry is expected to reach $6 billion by 2022. As customers want to become more self-reliant, contactless product categories such as smart led lights, smart plugs, smart lamps, and others will continue to gain appeal. Consumers will be on the hunt for energy-efficient gadgets since many devices will be used at home, and home is where activity will continue to peak for a while. Due to qualities such as simple accessibility and comfort, ‘SMART’ is no longer a luxury but a necessity in today’s technologically oriented atmosphere. Since smart home automation offers a wide range of advantages and also boosts the value of homes, consumers are growing more interested in the technology.
In recent years, venture capital investment activities have increased significantly in countries with advantageous legislative frameworks, as well as industries with a greater degree of innovation.
5. Demand for ‘Made in India’ products will continue to rise.
The ‘Make in India’ campaign is gaining traction, and the Indian government is urging enterprises of Indian descent to be “Vocal for Local.” Consumers have shown a preference for domestic goods, allowing Indian firms to become self-sufficient in the future. The PLI programme, backed by Modiji, is supposed to help the nation by promoting economic growth and supporting in the creation of more employment by luring large-scale manufacturing to the country. This is an excellent opportunity for the whole industry to become self-sufficient and produce high-quality, internationally competitive goods. Such a kind of government actions will undoubtedly aid domestic businesses in growing their production capacity and exports.
6. India’s insatiable need for bargains would boost e-commerce, ‘value for money’ businesses, and category expansions.
Value-for-money brands with “just right” features and pricing will appeal to Indian shoppers. India’s new customers want to buy more (and have the financial means to do so), yet they are distributed throughout tens of thousands of urban and rural areas. Asset-light e-commerce strategies, bolstered by offline alliances and demand aggregators, will enable companies to explore and enter these new markets at a low cost. Businesses will also be able to increase spending on new category expansions.
For example, due to the increased usage of app-based meal delivery to replace home-cooked meals, particularly among upper-middle-income and high-income working customers, eating out will become a large portion of food and beverage spending (up from more than 10% currently). One out of every four of these people has already began to raise their entertainment spending by signing up for digital video-streaming services. In many established categories, affordable and novel solutions may release substantial additional expenditure and generate new consumption types.
Additionally, to make better investment selections, venture capitalists are using algorithms and machine learning (MI) to discover firms with higher growth potential.
7. Half of the extra rupees will be spent on purchasing more, with the remainder split roughly evenly between buying better and buying new.
By 2030, half of the additional consumer spending will simply be spent on more of the same items and services that are already being consumed. The importance of affordable options will continue to grow. The other half will be spent about evenly on upgrading to premium products and incorporating new variations into established routines, such as adding organic foods and a new beauty regimen, or embracing app-based ride-sharing. Premiumization and category expansion will generate a major portion of additional spending on eating (at home and out), looking nice (personal care and clothes), and keeping connected (cellphones, data packs).
8. Aspirations are rapidly convergent in both urban and rural India, and improved access will turn this intention into real spending.
The internet and cellphones have helped to overcome the information gap between urban and rural Indian customers. Beyond the top 40 cities, developed rural and small urban areas have an income profile that is relatively comparable. Both of these consumer groups want a comparable quality of life, aspire to a similar selection of brands, and are similarly comfortable with technology-enabled purchase at a certain income levels. Poor access to roads, electricity, organised retail, and banking institutions are now limiting rural India’s great desire to consume. Improvements in physical and digital connectivity, as well as the adoption of innovative distribution channels, will improve well-being and unlock the true consumption potential of rural India in the future.
As a result, venture capitalists are altering their strategies in order to stay afloat in the quickly changing industry.
9. The market will be strongly shaped by the choices of Millennials and Generation Z.
These customers will be able and ready to spend more money, but they will also be pickier. 77 % of Indians born between the late 1980s and the present will be alive in 2030. Consumers of this generation will have been exposed to more product and service alternatives than their forefathers. Although they have indicated the most readiness to spend over the next 10 years, these young Indians are also quite discerning about what they consider “best in class” products. Richer, more willing purchasers will be available to businesses, but these buyers will be well-informed and make very precise decisions for themselves and their families.
The industry is now expanding as a result of an increase in the number of startups, as well as increased venture capital investments from mutual funds and banks.
- The need for healthcare elements to be included into goods
Consumers are expected to place a higher priority on health in the future, and will seek out products with superior features that will improve their health and well-being. The spread of the virus has raised awareness about the need of maintaining good health, Smart wearables are becoming increasingly significant due to their evident link to safety, health, and hygiene. Monitoring blood oxygen levels, heart rate, health tracking, hand sanitization reminders, sedentary warnings, tracking water intake, and for ex- Spo2 monitoring, have grown in popularity in recent years, and this trend is expected to continue next year. According to a research by International Data Corporation (IDC), India delivered 23.7 million devices (Wearable) in the third quarter of 2021. Companies in the FMEG industry have already started to reinvent the wheel by putting health-related enhancements into their products.