To put this in perspective, let us first understand why there is a greater need for wealth today. Year-on-year inflation devalues our savings. After all, its the white ant in lifes framework. Second, life expectancy has grown in the last century, from a mere 20 years in 1910, to about 60 years today. Last but not the least is the one with the most profound impact on personal wealth our changing lifestyles!
With Indian consumers waking up to new lifestyle aspirations over the last few years, social forces along with business factors are witnessing a drastic change. Middle-market Indian consumers are trading new products and services that deliver higher levels of quality, taste, and aspiration than conventional items. The higher disposable income level of middle class, availability of new products, brands and services, growing awareness and sophistication, changing family structures, affordable and easy credit have all changed their attitude to money and quality of life. Aligning with these changing social forces, business factors have also undergone a change in this country. Entrepreneurs enjoy unprecedented access to cheap capital; even small businesses can tap into global supply networks and malls have brought specialty retailers across India. The result: an environment that encourages people to upgrade their lifestyles and fuels consumerism and household spending.
The demography of India, too, is in the midst of a structural change. Currently, two-thirds of Indian population is under the age of 35 years, making India one of the youngest nations in the world. Urban India is also witnessing a higher growth rate compared to rural India. More and more young people from rural India are moving to urban cities for higher education, employment and the like.
The growth in the population of young urban India forms a higher number of employed city residents who earn more and thus have a larger spending power. This spending power is only boosted by easily available credit. These sections of youngsters are more market-savvy and have greater aspirations than their predecessors had. These aspirations will influence a greater belief in lifestyle products and services.
Along with being one of the youngest nations in the world, we are also the second-fastest growing nation in the world. Post-Independence, the Indian economy has shown a surge in growth momentum, which has given rise to a growing level of income thus a large middle class and a growth in the number of urban cities in the country. The rising middle class in India is an effect of the emergence of sectors like IT services and retailing which have been hiring a growing number of young who are open to adopting a lifestyle more refined than their forefathers.
Accompanied by the revolution in the financial sector, credit has become easily available which provides the younger generation the fuel for their hunger for a desired lifestyle. These factors not only encourage urbanisation, but also forge Indias growth towards consumerism and lifestyle changes. Indian youth is getting exposed to western culture. This, coupled with their higher disposable incomes, helps them strive to achieve a higher standard of living, like their counterparts in the western world.
Alongside this, Indian markets have been seeing an influx of brands, making the consumer more conscious of what he uses. Banking at fingertips has also redefined the availability of money to many. Banks have not only introduced revolutionary measures like the debit card, but have also made the availability of credit very easy and tempting to consumers. These gradual changes in an Indians lifestyle have a much bigger impact than meets the eye.
The creation of a demand pull for lifestyle segment products due to higher disposable incomes leads to higher sales and higher corporate profits. This will force companies to expand and grow production to fulfil the demand. In turn, making them hire more people. The cycle continues forward only to further add to the disposable income of people. Thus, this change in lifestyle leads to a cycle. Along with this, we can see many lucrative investment opportunities emerging from the changes in lifestyle.
The demand for more has forced some international majors to look at India as a business destination. We have the likes of the retail giant WalMart wanting to enter the retailing business in India. Sectors like media & entertainment, automobiles, telecom, organised retailing, travel & tourism, banking and finance and insurance are all going to benefit from this changing lifestyle. Youll be really surprised to know that the entire segment of lifestyle companies as we call it analysts expect, will more than triple in just five years. This is whopping growth and potential for any sectors. There is also a huge investment opportunity here that we shouldnt miss out on. Can you imagine we have reached a scenario where, the more you spend the more you earn!
Happy spending & investing!