NEW DELHI: India could be home to the third-largest number of high-income households globally after the United States and China by 2030 with Mumbai likely to be the fourth-ranked city in Asia for the same.
The development is set to be propelled by Asian consumers who are expected to account for half of global consumption growth in the next decade, equivalent to a $10 trillion opportunity, showed the latest McKinsey research paper. In India, too, consumption is expected to get a boost by $1.8 trillion during the period.
“Asian consumers continue to face challenges associated with the COVID-19 pandemic, but are likely to contribute to half of all global consumption growth in the next decade,” said Mahima Chugh, a McKinsey partner in Mumbai.
Some of the factors that will contribute to India’s growth story are rising high-income households and shrinking household size, doubling of the consuming class, seniors going online and the rise of e-commerce.
In India, for instance, the average size of households is shrinking with the country having witnessed a 16% decline, from 5.5 to 4.5 persons, from 1999 to 2015.
In addition, by 2030, up to 55% of India’s population could belong to the consuming class (spending more than $11 a day), up from only 24% currently and 9% in 2000 and the country may represent 27% of Asia’s consuming class.
“Asia’s consumer story over the next ten years and beyond is not only about scale and growth, but about growing diversity in consumer markets (in a region that is already hugely diverse) and how consumers in the region are trailblazing new paths,” said Jonathan Woetzel, a McKinsey senior partner in Shanghai and a director of the McKinsey Global Institute.
Similarly, with more seniors going online, their consumption may grow twice as fast as consumption by the rest of the population. Consumption by seniors (aged 60 and over) may grow 1.6 times faster than that of the Indian population as a whole, said the report.
New sales channels such as e-commerce which is expected to grow 25% annually till 2025, is also expected to fuel India’s growth story.
