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India may be the 5th largest cosumer market by 2010
By siliconindia
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Tuesday, 30 October 2007, 19:30 IST
Chennai: India is rapidly bulging in the 'middle'. With the economic engine chugging at 7.3 percent annual growth over the next about 20 years, our 'middle class' is expected to grow eight times: to nearly 600 million, or 40 percent of the population, from the current five percent, says McKinsey in its study, reported The Businessline.
In a recent McKinsey Global Institute (MGI) study, "The 'Bird of Gold': The rise of India's consumer market", it forecasts that by 2025, the number of Indian city dwellers who will belong to ?middle class' households, living at a comfortable standard with disposable incomes between two lakh rupees and Rs 10 lakh a year.
The size of the market, measured by private spending, will leap to Rs 70 trillion, about 60 percent of India's GDP in 2005. In the process, India would become the world's fifth-largest consumer market from twelfth now, the report declares. "Higher private incomes and, to a lesser extent, population growth will encourage this rise in consumption. Changes in savings behavior will play only a minor role."
By 2025, 'India's wealthiest citizens', earning more than Rs 10 lakh a year, would have grown ten-fold relatively, to 2 percent of the population, from 0.2 percent today; they would number 24 million, which is four million more than the latest headcount of Australia. These 'global' Indians, who would live in the eight largest cities, are likely to have 'tastes similar to those of their counterparts in developed countries: brand name goods, vacations abroad, the latest consumer electronics, and high-end cars.'