Premiumisation

Indian consumption story has been resilient so far and this claim could be buttressed by the fact that in Q2, it registered a staggering growth of 7.6%, beating analysts' estimates and triggering an animal frenzy within the investor community at large. Nearly 2/3rd of our economy is driven by Private Final Consumption Consumption Expenditure, even though the incumbent dispensation is pushing hard to take the share of manufacturing to 15% of our GDP by providing various sops like PLI schemes, subsidies, and laying out the red carpet for the investors.

States are organizing Global Investor Summits to showcase the talent pool, accessible bureaucracy, and investor-friendly SEZ policies. China + 1 theme has been gaining traction due to the political uncertainty quotient has been higher for China in recent times and companies are willing to diversify their supply chain ecosystem.

Now, amidst all these, we see global retailers like H&M, Starbucks, and Uniqlo setting up their shops in India, creating employment opportunities and adding fuel to the fire of consumerism.

Now, growing disposable income has been one of the major factors. As of this moment, India's GDP per Capita is around $2,256. It is indeed true that much is warranted in terms of increasing the figure but once a nation crosses the $2,000 mark then a new consumer class comes into the picture and forms a middle-income economy. India's burgeoning IT services sector which is worth $245 billion and contributes nearly 10% our GDP, and provides employment opportunities to more than one million white collar professionals has been at the forefront. Considering the fact many GCCs are setting up shops in Chennai, Hyderabad, and Bengaluru, am sure more would follow suit.

Travel & Tourism sector which bore the brunt of Covid 19 pandemic like no other is back with a bang. And Indians with their newfound love for travelling are pulling out all stops to make the most of it. Pick up any newspaper and go through the classifieds section and you would come across numerous ads promoting state tourism, travel agencies with tour packages, and national or international destinations.

Movie theatres had a sedate last couple of years and many experts were sounding out the death knell of the movie distribution business primarily because of the OTTs. PVR and INOX, two major players decided to join forces and survive somehow. 2023 was a surprise for them, stupenous success of Gadar 2, Pathan, and Jawaan had set the cash registers ringing.

Premium Mobiles resellers are also doing brisk business, according to Counterpoint Research India is amongst the fastest growing market in smartphones priced $1,000 and above. That's quite a statement considering the bulk of them are sponsored by Fintechs, NBFCs.

PV market in India is buzzing with activities. Premium cars like AUDI and BMW are sold 128 units per day. Mind-boggling number. Considering the fact, that the bulk of the clientele is under 40, Indians are no longer willing to wait. Instant gratification is the theme. SUVs have cornered nearly 50% of the market share and entry-level cars are losing their sheen. Maruti, the market leader in terms of volume needed to refurbish and restructure their product assortment sa, bringing in the new variants. Mahindra and other carmakers are also following suits. More than 6 models will be launched in a calendar year by different leading carmakers. Just imagine the potential.

Premium Residential Real Estate market is in a tizzy. Sobha, Brigade, Lodha, Godrej all the reputed developers are booking record numbers of sales, and their stocks are on fire at the moment. We find news items where celebrities are purchasing premium properties across MMR, Delhi NCR, Noida, and Gurgaon. Speaks volumes about the mood.

E Commerce companies , e.g, Amazon, Flipcart ,Meesho are reporting that the bulk of the volumes is coming from the tier-2,3,4 cities of India. So, the growth story is far more distributed.

Now, most of these consumptions are debt-fuelled consumptions and as of this particular moment credit growth is hovering around high teens for the lenders, Established lenders are setting up branches in hinterlands, tying up for the co-lending agreements with NBFCs, Fintechs are having a field day facilitating transactions. Unsecured lending is growing at a blistering pace. BNPL portfolio could blow up later if caution is not exercised. For instance, Travel Now Pay later portfolio is worth nearly 25,000 crore.

India is an oasis, a land of opportunity, no denying this fact. We are at the Goldilocks economy and would do well to capitalise on that. We have missed the bus once, let's not repeat the mistake. JAi