As per the BCG report, by 2020, the real annual GDP growth is pegged at 8% each in these two huge markets. The consumer revolution has already been triggered in these two nations. About 1 Billion middle class consumers in over 300 Million households along with the rampant growth in upper class are expected to trigger the consumer market splurge.
Both these nations are beginning to embracing reforms, investing big time on infrastructure and also taking measures to educate the masses. These steps will result in more avenues for growth in the markets from the supply side and increase in wallet size from the demand side.
The trend will start soon – a BCG survey says that discretionary spending will be on the rise in the next 1 year including 35% of the Chinese population and about 20% of Indians. Housing, home appliances, clothing, food will definitely be on the rise at a faster pace. In fact, consumers will become more brand conscious and will trade up to more quality and costlier goods. Clothing, Home Decor, Appliances and electronics segments are expected to get benefited the most. In other big economies the trading up percentage is not as high as these two.
Interestingly, there are four major companies that are propelling the consumer market growth in these two countries of which Godrej, Yum Brands and Huawei Technologies making it to the top three slots. Apart from this value providers will make successful strides in these economies.
One thing’s for sure, business houses are leaving no stone unturned to woo consumers with their offerings despite fierce competition. Those who would like to gain maximum share of the $10 Billion industry will have to look forward to address the needs of the value conscious consumer, face the pressures of offering low prices and at the same time face competition and keep moving ahead!