In nouveau riche India, even the poor show off
In the new, capitalist India, consumers are eager to flaunt their wealth.
from the June 4, 2007 edition
Page 2 of 3
"From the guy at the bottom moving from buying soap to buying shampoo to the guy at the top trying to act like his global counterpart, this is the first time that Indians have been able to afford discretionary spending," says Subbu Narayanswamy, a Mumbai-based analyst for the consulting firm McKinsey & Co.
In a recent study, he charted the following trends:
•Overall Indian consumption will triple by 2025, and 80 percent of the spending will come through income growth.
•Spending across all economic segments is up 40 to 50 percent.
•The global class of consumers, who buy top-branded and luxury items is expected to grow tenfold by 2025 to 23 million.
As recently as the 1980s, Indians could buy only one of two kinds of cars – a Fiat or an Ambassador – and they often had to wait several years for delivery. Now, the head of BMW Asia says the defining characteristic of Indian consumers is their desire to buy every available feature, no matter what its purpose.
"What the Indian consumer wants is the latest technology, and in the premium car segment they're looking for a fully loaded car," says Linus Schmeckel. "They don't like to be seen as second-class consumers."
Even this reporter's housekeeper, Asha Maya Tamangi is occasionally given to extravagance. She can nearly touch every wall of her apartment from her bed, and when she visits her parents in Nepal each summer, the trip involves a four-hour flight, a 14-hour bus ride, and two days of trekking through the Himalayas.
But when she needed to buy a mobile phone recently, simplicity just wouldn't do. She wanted to use it to listen to the radio, to take pictures of friends, and especially to make videos of her parents that she could bring back to New Delhi.
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