A Note on Consumer Spending Patterns in India|Business Reports

A Note on Consumer Spending Patterns in India

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Case Details:

Report Code : BREP047
Report Length : 12 Pages
Period : 2002 - 2007
Organization : -
Pub Date : 2007
Teaching Note : Not Available
Countries : India
Industry : General

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Consumer spending can be categorized into regular spends and lifestyle spends. Regular spends include grocery, eating out, books and music, personal care items, consumer durables, savings & investment, clothing, footwear, accessories, movies and theatre, entertainment, vacation, and home textiles. Lifestyle spends include payment for household help, gifts, furniture, computers/laptops, mobile phones, and Internet connections.
The liberalization of the economy in 1991 has had a significant impact on the nature of spending among consumers in India. The portfolio of spending categories for the average Indian has increased from 1991 to 2007.

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In 1991, the average Indian spent on 8 product categories, where as in 2007 the number of categories increased to 17, and included mobile handsets, gifts, and durables, among others.

Major factors influencing the increase in spending categories include rise in disposable incomes, increasing number of dual-income nuclear families and changing attitudes toward consumption. The attitude of people toward shopping has changed from it being a regular chore to one that provides an enriching experience. According to Ravi Raheja, MD, Raheja Group, “Consumers don't want to experience shopping, they want to shop for experience.”1

Consumer spending has played a vital role in the economic development of India. According to a report published by the Bank of Baroda in 2006, consumer expenditure is fueling economic growth in India...

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1] Agency Faqs, “Consumers Indulge in Lifestyle Spends Reveals KSA Consumer Outlook 2005,” http://www.agencyfaqs.com, February 28, 2005.


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