Indian consumers are all set to spend more
Considering the current inflation rate, which stands at 5.14% as of September 2015, growth is on a recovery course as the government too has started investing on a number of infrastructure projects.
Keeping in mind these facts and the results of a recent survey, it can be said that consumer sentiments have been witnessing a steady upswing. As per a survey conducted on 3000 consumers across 11 cities by Zyfin Research, the government’s efforts have paid off with consumers slowly loosening their purse strings.
A report by Boston Consulting Group (BCG), a global management consultant company too has been testimony to this fact.
Here are some brief sector-by-sector statistics of the growth we’ve seen and will hopefully continue to see.
The Indian Brand Equity Foundation (IBEF) data states that spendings on consumer durables have been steadily increasing over the last few years with a compound annual growth rate (CAGR) of 10.8% from FY03-12. While the consumer durable market was sized up at $6.3 billion in 2010, the sector is expected to double at 14.7 CAGR to $12.5 billion in FY15. This also proves that despite the slow growth over the last 2-3 years, spendings is only set to increase with the increasing demands of the middle-class group. The projected figures provided by BCG also claim that Indians’ spending on consumer durables is expected to grow four-fold, from $186 billion in 2010 to about $752 billion by 2020.
Society of Indian Automobile Manufacturers (SIAM) has said that production, sales, and exports of automobiles have risen in March-April 2015 as opposed to the same period last year. The industry manufactured over 23,366,246 vehicles this year, which included passenger vehicles, three-wheelers, commercial vehicles, and two-wheelers during these months in 2015 as against 21,500,165 in April-March 2014. This is an encouraging 8.68% growth over the last year.
The insurance sector too has seen immense growth since FY02 with the CAGR remaining at 37.5% till FY15. The non-life insurance policies (which includes motor insurance) in particular have seen heavy growth with the market size set to increase to $160 billion over the coming years from the current $60 billion.
These are just a few statistics to prove that consumer spending is going to see better days in India. The RBI interest rate cut too will allow consumers to flex their money muscles over the coming months.