CHANGES IN INDIA IN LAST 60 YEARS

India being a vast country, here people inhabit four climatic zones, form the temperate
north to the tropical south, from the parched west to the inundated east, speak one or
more of 15 official languages, follow several religious and personal beliefs, differ
enormously in their food habits and social customs and live together under varying states
of human development, from highly affluent to the utterly destitute. Around three fourths
of India’s population lives in rural areas and contribute one third of the national income.
This diversity is also reflected in the market for consumer products. Here consumers
present a complex and bizarre group.

Since independence India has transformed, from a socialist economy, into a liberal free-
market economy that rewards free enterprise and entrepreneurship. Today, we proudly
stand as the second fastest growing economy in the world with a robust and resilient
financial system that has proved to be immune, to an extent, to the global economic
recession when other countries such as the USA, UK and Japan are engulfed into the
economic meltdown.

As in 2007, India was the fourth largest economy in the world with a GDP of $3 trillion
(Purchasing Power Parity basis). Thanks to the regulated banking industry and the culture
where people tend to save. India has evolved, socially and economically, and grown
significantly in the last couple of decades. The Judiciary has played a critical role in
formulating laws to overcome evils including exploitation of women, dowry, child labor,
preservation of Flora & fauna. We seem to have overcome the stereotypes of gender
roles, to a great extent, and see that women do not fall behind men in any field.

In the last decade or so, there has been a significant investment in infrastructure projects
in road, port, power and telecom sectors leading to the employment of millions of people
across the country. In 1998, the government created National Highway Development
Plan (NHDP) for the development of roads across the country with an estimated cost of
INR 54 billion. Such projects have propelled and stimulated the economic growth by
providing employment to numerous people. With more disposable income at hand, these
people spend more on consumer goods, leading to an increase in the overall spending.
Infrastructure projects, as a means of providing employment to the poor, have played a
key role in reducing the inequity between the rich and the poor; therefore, propelling
equitable prosperity in India. With the government creating incentives for Foreign Direct
investment, FDI inflow in India rose from meager $155 million in 1990 to $24 billion in
2007-2008.

This economic growth coupled with a focus on education has lead to the emergence of a
more prosperous, responsible and stronger middle class that continues to play a critical
role in creation of a prosperous and enriched India. Today, Indian IT industry is
considered a benchmark across the globe and India has emerged as the most favorite
destination for outsourcing, leading to the creation of numerous job opportunities in India
as well as abroad. Success of Indian corporations is not limited to IT industry. Companies
seeking foothold overseas range from manufacturing to pharmaceutical to Bio
Technology. In last few years, Indian manufacturing industry has proved its mantle by
making several acquisitions overseas including Tata’s acquisition of Chorus, TATA’s
acquisition of FORD’s JAGUAR and LAND ROVER to name a few.

The high rate of industrialization, growth of service sector and

better employment opportunities have increased consumers disposable income,
developed new lifestyles and awareness and a drastic change can be seen in their buying
behaviour. The Indian consumers today wants to live in present and prefers a life full of
luxury & comfort and are not much price sensitive. They are highly aware about the
product, price, quality and options available with them. Indian consumers believe that
branded products are more reliable. The brand which identifies and support family values
are more popular and accepted easily by them. Introduction of credit culture has made the
Indian consumers to purchase products on credit and pay tomorrow.

This has led to tremendous increase in purchase of homes cars, two-wheelers and
consumer goods. The consumers have a strong preference for luxury and imported
products as they generally considered it worth for money. An average consumer in India,
strictly follows their culture, tradition and values. Despite of many foreign brands being
sold in India, RAYMOND is still India’s largest textile company and HALDIRAM is
doing well with McDONALD and PIZZA HUT. A major change that has occurred in
Indian consumers is that, they give preference to features of a product rather than its
brand name. They are also not confined to a single brand but prefer change rather than
sticking to the same brand. They just don’t want availability of products, but also
better experience, services and ambience. This has led to the growth of shopping malls
where all the facility is available under one roof. The Indian market has become a
‘buyers’ market from ‘seller’s market’.

Over the years, as a result of the increasing literacy in the country, exposure to west ,
satellite television, foreign magazines and newspapers the buying and consumption
patterns of Indian consumers have changed significantly. The emphasis has changed from
price consideration to design, quality and trendiest. The desire to look and feel good is a
guiding factor for customers while making their purchase decisions.

Earlier the males had major role in making all the purchase decisions.But now the role of
children and women in the family has changed. They have become the major influencers
in taking purchase decision.

With the growth in education, the media influence and the growing number of working
women have created a new middle class woman.Some brands are also focusins through
T.V. commercials to empower women eg-advertisements of tata tea,hero Honda scooty
with tagline “why should boys have all the fun”,women horlicks etc .This woman is
more self sefficient, confident and health conscious and is making increasing demands
for personal and convenience products .Due to which there is a growth in beauty parlours,
beauticians,health clubs.
A large proportion of Indian consumer consisits of urban as well as rural youth.With
growth in education and liberalization fresh graduates are getting plush jobs in emerging
industries thus purchasing power rises.Also youth between the age of 12-18 yrs are
becoming more brand conscious and they are opting for branded clothes or the copies of
the same according to there purchasing power.

An increasingly industrialised economy is opening new doors everyday for young people
to embrace an affluent lifestyle. The large volume of young consumers in India is
providing a new market for merchandisers stuck in a sluggish world economy. The
country has now emerged as the next stop for luxury brands such as Gucci, Chistian Dior
and Versace.

Regarding expenditure, it is found that consumers today spend more on non food items.
Share spent on various food and beverages has fallen and importance of medical, health
care, transport and communication has grown. The consumers are more fond of
convenience food like instant coffee and noodles. They consider food and drinks as fun.

The number of modern gadgets like mobile phones, L.C.D.’s,i-pods etc is preferred more.
The yesterday luxuries have become today’s necessities. There is heavy western
influence seen on urban middle and upper class. People have become more conscious
about their looks and there is a growth of beauty parlors, beauticians and health clubs.
The middle class is much interested in buying the dresses and brands by the
multinationals. Bulk purchasing seems to be the order of the day with purchasing
becoming a week end affair. The current trend seen is that the consumers prefer to buy
things from hyper stores and super markets.

If we move on lower class, it is observed that consumers craves for a lifestyle like the
well to do people they see on television. Their preferences have changed from home-
cooked food to fast and ready to ready to serve food. Besides, the young consumers are
passionate about visiting fast food outlets for fun and change. With the growing culture
of call centers, youngers have now more cash in hand and they prefer to spend it
on leisure and personal gratification. The rural consumers buying and consumption
behaviour has also changed. The rural consumers are not only confined to purchasing
goods in the villages, but they desire for products outside the village economy. There is
demand for high status consumption goods and the rural consumers want all the modern
amenities at their home which is being reflected in their living standard, possession of
electronic gadgets and luxury cars. It is assumed that with the growing disposable
income, industrialization and liberalization, the Indian consumer market is expected to
grow as 5th largest market in the world by 2025

RICHI AGGARWAL
PGP-10-12
SEC-B