The spending pattern of people in India is changing rapidly. Now only things like ration, TV, fridge or two-wheeler are not the first choice of the people. Today’s consumer is spending more money on digital services, premium mobile, OTT, foreign travel and better lifestyle. According to Kotak Mutual Fund’s report The Great Consumption Shift, the Indian market is now becoming more experience and convenience based. Due to this, a big change is being seen in the consumption pattern of the country.
People should spend on good experiences
Earlier in India, people used to spend a major part of their income on FMCG products, home appliances, two-wheelers and domestic travel. But now the picture has changed. People are now spending more on experiences. This includes live events, digital entertainment, OTT platforms, gaming, premium gadgets and online services.
According to the report, the number of ticketed live events in the country was around 19 thousand in 2022, which is expected to increase to 34 thousand by 2025. This industry is now worth Rs 20,861 crore. It is clear from this that people are now preferring to buy experiences instead of just buying goods. Apart from this, the growth of SIP investment, e-commerce and digital platforms has been faster than traditional consumer sectors. This means that Indian consumers are now giving more importance to convenience, technology and lifestyle.
Purchase of premium items increased
The demand for premium products is increasing rapidly in India. This change is clearly visible especially in the smartphone market. Smartphones priced above Rs 30,000 now account for 26% of total sales, whereas in 2020 this share was only 20%. Interestingly, there has not been much increase in overall smartphone sales, but the demand for expensive and premium phones is continuously increasing. This shows that people are now preferring to buy less but better quality products.
The report also mentions Apple’s growing influence in India. The company’s revenue from India may reach Rs 1.43 lakh crore by FY26. This figure is more than Hindustan Unilever Limited. Apple’s India business has grown 6.2 times in the last five years, while HUL’s growth has been very slow. This change shows that the new customer of India is now spending money not only on cheap goods, but also on brand, premium quality and status.
Rising prices are changing household budgets
Although spending habits are changing, financial pressure on families is also increasing. Rent has increased rapidly in big cities and now it has become a major part of the monthly expenses of households. Along with this, the EMI burden is also continuously increasing. According to the report, this happened five times in the last seven years when EMI increased faster than people’s income. This has affected people’s ability to save and spend. That is, on one hand people want to adopt a premium lifestyle, while on the other hand rising inflation, rent and loan installments are putting pressure on the household budget.
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The biggest conclusion of the Kotak Mutual Fund report is that India’s expenditure has now shifted from food grains to data, OTT and mobile. Today’s Indian consumer is spending more money on connectivity, convenience, global exposure and better experiences.
Expenditure on foreign travel has increased 5.6 times in the last eight years. Apart from this, the interest of Indians in foreign investment and digital services has also increased rapidly. Experts believe that in the coming times, India’s consumer market will be completely experience-based and premium. This means that future consumption will not be determined only by necessities, but by digital lifestyle, premium brands and global experience.
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