Upon entering a middle-income family home in the late 1980’s, you would be faced with a strange site – a fridge in the sitting room. Covered with a plastic tablecloth to prevent scratches, it was an indication of your wealth and lifestyle. Second to a car, it would be the most expensive purchase that the family would make, and the decision making process would involve the entire family, several trips to the local electronics goods store, and a thorough financial overview. Only after this would the purchase finally be made.
This was an era when the consumer goods market only catered for the very wealthy. It was also a market that had very limited choice on offer. In 1991 India moved away from a state-directed economy and opened its markets to global competition. Multinationals flocked into the country and the prospect of profits sent economy racing. As a result, the India of today is very different from that of the 1990’s. Dazzling shopping malls of Hyderabad, Delhi and Bombay are transforming the lifestyles, mentalities and spending habits of an entire class. Cities all over the sub-continent are showing signs of transformation; busy roads, bright lights, colorful billboards and sea of frenzied shoppers are slowly molding the landscape.
Now with unprecedented levels of disposable income the consumer spending has grown an average of 12 percent a year over the past decade. There are 75 million households who are earning an annual income of 45,000 rupees or over, and the Indian middle class, already bigger than the population of the US will grow to 445 million. Moreover, the age profile of the population is likely to sustain consumer spending as more than 45 percent of Indians are under the age of 20.
The India of the past had no place for washing machines; fast-food places, supermarkets, or department stores. You could not choose between your frozen foods, cereals, and juices. There was no wine, ATM’s, discos, bars, or cable TV. Middle class Indian culture was frugal and savings accounts crucial. Having to borrow money from the bank to buy things for the house was considered to be a sin.
Today, aspirations for the good life are rife and the society demands branded, glossy, sleek goods. Instant gratification is a chant that has firmly placed itself into the homes and the hearts of everyday Indians. And the fridge in the living room has been replaced by a large screen color TV, a DVD and a CD player.