Although the aspiring class shows a CAGR of only 8 per cent, its share will double from 17 to 34 per cent. The households in the category of seeker will also increase to around 10 per cent of total households. This is reflective of the growth in the consuming class. An increase in the spending class implies an expanding opportunity that retailers can tap.
The share of persons falling in the Deprived Category is likely to decrease and it shows a negative growth rate from the period 2001-02 to the period 2009-10. At the same ,time, the share of persons falling in the Super Rich, Sheer Rich, near Rich and almost Rich is seen to be increasing, which is reflective of an increasing affluent society and this is also an indicator of consumption levels and the products consumed. This increase in incomes has happened in both urban and rural India, giving rise to what is now popularly termed as the ‘Great Indian Middle Class’.
The Age Factor:
Compared with several advanced countries, where the overall population is aging, India is a very young nation, with more than 70% of its population below the age of 40, and more than 47% below the age of 20. This age distribution is of significance to markets of goods and services. It partially explains the boom in all Indian cities in consumption of impulse products and leisure related expenditure in general, since the onset of liberalization. According to the Census of India, 2001, 54 per cent of the population in India is aged 24 years and below, 35 per cent and 19 per cent of the population in the ages 0 – 14 years and 15 — 24 years respectively. The youth population in the age group 15 – 24 years is expected to increase from 195 million in 2001 to 240 million in 2011. Out of the total population increase of 371 million between 2001 and 2026, the share of the workers in the age group of 15 – 59 years in this total increase is 83 per cent. The increasing youth population which has also started earning early also increases the overall purchasing capacity in the country, and has implications on the productivity of labor.
The projected increase in the economically active population of young Indians holds the key to India’s prosperity and its economic potential over the next twenty years, and is expected to unlock a new wave of consumer demand provided the current trend of economic liberalization continues and generates continued investment and trade opportunities in the economy.
The changing role of women and the evolving family structure:
According to the 2001 census report, the population of working women has increased from 22 percent in 1991 to 26 per cent in 2001. The increased economic independence of women has redefined the rules of social behavior. Apart from an increase in the family, it has led to a change in the kind of products and services which are demanded. The purchasing habit of a working woman is different from that of a housewife, since the former has lesser for purchasing their regular products. Also, a working woman’s propensity for spending is higher than that of a housewife. The increase in the number of working women will hence drive the need for convenience and will play a major role in the success of many modern retail formats in the country.
Apart from the increase in the number of working women, the average household sizes have also decreased from 5.57 in 1991 to 5.36 in 2001. With more and more nuclear families proliferating, it is to be reasonably expected that time poverty is setting in. Nearly 1.5 – 2 per cent of joint families give rise to nuclear families every year. The rise in the number of nuclear families typically, is seen as a factor which will translate into higher spending on retail goods and works in favor of organized retailing. In fact, it is estimated that nuclearization would account for 3 to 4 per cent increase in aggregate spending over the next five years. .Thus, the nuclearization of families is also seen as a driver of modern retail trade.