Consumerism in India

There is a lot being said and written on the consumerism boom that has been witnessed in India since the economy was opened up in 1991. I would like to add my two cents (or paise, in this case) to the Indian consumerism debate.

I have classified the Indian consumer into four broad categories, based on age. The people of each category have been shaped by the time in which they grew up. Their experiences in life up to the point they become young adults explain a lot about their behavior, their attitude to society and even their spending habits. It goes without saying that the attitudes overlap to some extent over the group, and that there will be exceptions depending on the exact environment one is raised in. This is also my opinionated subjective classification based on my observation and I can only offer personal experience as a validation to my arguments.

The first group is those born before independence. The members of this group have seen a lot of pain, struggle and scarcity. In their childhood, they remember India going through the pains of partition, and struggling to find her feet as a young nation. They find it very difficult to look at consumerism as being something that is acceptable. For example, my grandfather always tries to appear as if he never ‘wants’ anything. He loves ice cream, but he will never admit it to anyone. He would be more likely to say, “If there is any ice cream left over, give me some. Don’t go downstairs to buy some just for me.” Sometimes I think he probably feels guilty in regularly consuming something that was considered a luxury when he was growing up.

Another group consists of those born between 1947 and 1965. The members of this group would have seen India coming to terms with its independence. The days of the green revolution, the corruption of Indira’s term, the artificial scarcities and hoarding mentality brought in by the license Raj are all part of the memories of this group’s young days. One will never see them wasting anything. Everything is saved or recycled. These habits are reflected in almost every Indian home. People my age (early twenties) who have parents in this demographic are used to seeing jam jars being used to store pickles, and newspapers being used to line bottoms of desk drawers. This group has seen times when it took ten years to get a telephone line, so when they get something, they take it even though they may not have immediate need for it. On numerous occasions I have seen people on flights who take a soda even if they don’t want one and put it right into their bag or purse for later consumption.

A third group is of those born from 1965 to 1988. They form the bulk of India’s working population. When India opened up its economy in 1991, they were old enough to see the rapid change in the social and economic environment of the country. However, they also remember the days of scarcity and are ideally placed to appreciate the striking contrasts of pre- and post-1991 India. This group was the first to start migrating to other countries on a large scale for work and education. Unlike the two groups preceding them, they have had significant first-hand experiences of the way the developed world lives. They generally believe in working hard and spending hard, and are responsible for the current boom in consumerism. They have no qualms about borrowing and spending money, showing it off, or being materialistic. For instance, people from the first or second group would not be as comfortable driving an expensive car. They might feel guilty about showing off their wealth, feel scared that the government might come after them, or simply believe that one should save and not spend. But someone from the third group will have no problems buying one, showing it off and working harder to buy another one. You can stand on a sidewalk at Malabar Hill (one of Mumbai’s most exclusive neighborhoods) for five minutes on any given evening, and the number of BMWs, Audis, Bentleys, Range Rovers and Porsches you will see will prove my point.

The last group is those born after 1988. This group has always lived in a time of relative prosperity and consumerism. They can’t imagine waiting for more than a day for a phone connection, or when an entire nation had nothing to do but listen to Binaca Geetmala
A popular radio show from the 70s and 80s on the radio for entertainment. They are confident of themselves and their capacity to earn money, and they spend a lot of it. They will soon outpace the third group in spending power, and take to credit on a much larger scale as well. On the contrary, the first two groups are still not comfortable taking loans from people other than family and friends or having outstanding credit balances on their credit card accounts. The fourth group consider themselves culturally closer to the developed world and unfortunately will spend like them too once they start earning money in the next three to five years.For instance, most urban kids play less cricket and more video games than the third group. They have tremendous choice in what they want to eat, wear, play with and study. They have add-on credit cards that their parents give them. One regularly sees high-school kids spend a thousand rupees on “a night out” in expensive nightclubs in Mumbai.

I hope this broad classification provides some clarity on why people spend money the way they do and what one can expect in the next few years as far as consumer spending in India is concerned. I see a boom in organized retail, consumer lending and luxury goods sales. These groups also can also tell us a lot about people’s attitudes towards society, relationships and the government. But that is another article for another day.

Photo Courtesy: drmarcus


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11 comments

  1. Anand Jayanti says:

    Feb 5, 2009

    Reply

    Aditya this is spot on!

    Expecially on the ice cream and pickle jar accounts. : ]

    It is also very informative and clarifying in terms of the striation of the various generations. Keen and meticulous.

    Great article!

  2. neon says:

    Feb 6, 2009

    Reply

    “For instance, most urban kids play less cricket and more video games than the third group.”

    Sigh.

  3. Rajan says:

    Feb 7, 2009

    Reply

    As far as the difining part of this article is concerned it has been fairly decent but the cutural aspect of spending money is completely neglected. During partition India had joint family system and everthing that was carried out in the family was followed as tradition. Traditional legacy used to be carried from one generation to the other with timely changes brought in by the fresh blood,but the indulgence of the western culture into our country I would say really took the toll of ripping the indian culture apart to such an extent that every thing went haywire so badly as one could not have imagined. Consumerism cultureprivailing in our country has been washed off and every thing to date is completely unpridictable in this sector as far as the past experiences of the consumers and the behaviour of the current generation is concerned.

    As for the consumtion of the luxuries are concerned, I think to spend on the extreme end is a crime in a country like India where there is no social security provided by the govt. and the bigger percentage of people yet do not even have enough for one time meal. Rich are becoming more richer and poor more poorer. Disparity is the word to be used for this, and till this is not met with, I think we should not even think about luxury.

  4. Vikram says:

    Feb 8, 2009

    Reply

    Aditya, I am just copying my comment on your facebook note here. I hope you dont mind.

    The third category (1965-1988) probably explains India’s relatively high savings rate. Good analysis on that part of the urban middle class demographic.

    I differ with you on the last group. I think what you said is true for the children brought up in metros, and even within that group its more true for children of affluent parents.

    I think a lot of India’s new middle class is going to be made up of youth who grew up in smaller towns and cities, where the old savings paradigms mostly still hold. So it might not pan out as you envisage.

    And of course rural India is a whole another topic.

  5. Aditya says:

    Feb 8, 2009

    Reply

    @Rajan: I sense some socialism. Thanks for your comment.

    @Vikram: No, I don’t mind at all. I concur with you..as I said these observations are based on my own experiences..which are undoubtedly those of an upper-middle class city kid…

  6. bhavna ramchandani says:

    Apr 28, 2009

    Reply

    hi,

    thanks aditya, cos i was an nri and this was helpful in understanding india and also because i m workin on a project on a related topic.

    thanks rajan for showing us the second group live

    and thanks vikram for adding more truth to it. i agree with you, the lines between the four groups are not etched in stone. i have friends from nanded and jaipur and they fit your description.

    which is what makes india beautiful (for ppl like me) and complicated (for marketers). i hope we (the third and fourth groups) stay in touch with the values of our parents generation, it makes absolute rational and economic sense to make pickles in the jar bottles (recycling is green) and take the soda when you dont want it and have it later. i know the philosophy can get irritating (trust me, i know, i sometimes live with the first group).

  7. sridevi says:

    Mar 2, 2010

    Reply

    aditya
    the article was too good and found to be intresting in ur own words when my mind was imagining my grandpa, dad, my sister and last myself
    great analysis with the age group. when talking abt pickle bottles and old newspapers just made me laughing. gud work. keep rocking.

  8. Subin says:

    Mar 29, 2010

    Reply

    Well written man. Nice approach.

  9. Shruti Masih says:

    Apr 21, 2010

    Reply

    Concept is wonderfully explained!
    specially, Eg’s used are great to understand.

    i was given a college assingement on this topic n this article helped me a lot to explore further new ideas.

    thank you.

  10. Aditya says:

    Sep 7, 2010

    Reply

    @Everyone: Thanks for the kind words!

  11. african wildlife safaris says:

    Dec 19, 2010

    Reply

    All God wants of man is a peaceful heart. -Meister Eckhart

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