In the face of global economic uncertainties, Indian consumers exhibit a positive outlook on their financial well-being, propelled by a sizable population, primarily young, with increasing disposable incomes.
Deloitte’s Financial Well-Being Index (FWBI) for October 2023 indicates that India scored 109.1, surpassing the global index average of 91.9. This optimistic sentiment has translated into heightened consumption, particularly in discretionary and aspirational product categories.
Deloitte’s ongoing Consumer Signals initiative reveals that 77% of Indian consumers have no plans to defer significant purchases. Additionally, 70% have indulged in spending over the past two months, with clothing, accessories, and food and beverage topping the list. Confidence in shopping plans is evident, with more than 50% expressing interest in investing in premium consumer durables, and 57% willing to spend on premium food and grocery products.
India’s growing economy is fostering a shift toward premium and luxury spending, projected to reach $30 billion by 2030. This trend spans various sectors, including apparel, food, consumer durables, auto, home lifestyle, travel, and experiences. The rise in awareness and exposure to global design trends, facilitated by social media and influencers, contributes to the desire for frequent upgrades among buyers.
Leading global luxury brands are entering the Indian market, providing easier access to the latest products. This not only attracts new buyers but also retains consumption within the country among the affluent class, which was previously fulfilled through overseas travel.
Education, exposure, and affluence have made consumers more discerning about their needs, seeking differentiated, localized offerings beyond popular brands. The growth in modern retail, incentives for local manufacturing, and the rise of marketplaces have fueled the success of direct-to-consumer (D2C) players and private-label offerings, competing effectively against multinational brands.
D2C brands, combining design, aspiration, and value, are accelerating the shift from unorganized to organized markets. The rise of new commerce, including D2C, social commerce, quick commerce, and live commerce, is expected to grow significantly, constituting 40% of the overall e-commerce market by 2030.
As consumers gain more choices across categories, brands are prioritizing customer experience as a key differentiator for growth. Technology is being leveraged to enhance customer interactions, with conversational commerce, vernacular connect, and generative AI playing pivotal roles in shaping the future of consumer engagement and brand growth.
Anand Ramanathan, Partner for Consumer Products, and Retail Sector Leader, along with Smita Murarka, Director, Consulting, Deloitte India, shed light on these trends and their implications for the Indian consumer landscape.
