ECON­OMY

There are no lim­its to con­sumerism any­where in the world. In­dia and Pak­istan are no ex­cep­tion.

Southasia - - Contents Cover Story - By Shairose Ukanji

The bur­geon­ing mid­dle classes of In­dia and

Pak­istan are re-defin­ing con­sumerism.

A“ re you se­ri­ous? Cob­blers are his­tory to me! You got to buy new pairs of shoes ev­ery now and then; get­ting them mended is not so de­sir­able these days. Your out­fit speaks to oth­ers of your per­sona, class and trend. And, I need to main­tain my trendy-self!” This came as an abrupt re­sponse from Jai Ku­mar, an as­pir­ing youth liv­ing in Karachi, when asked about how important a cob­bler’s role is in these times.

Speaking to Ku­mar for the next cou­ple of hours, I con­cluded that the mind­set per­tains to a host of other con­sum­ables. His fa­ther is a col­lege pro­fes­sor and earns to save for a pros­per­ous fu­ture of his two daugh­ters and a son, while his mother is a house­wife. With such a life­style, the bour­geon­ing mid­dle class in South Asia is ex­pand­ing and that too in a way that it is an­tic­i­pated to spend $32 tril­lion per an­num by 2030 and break all records of world­wide con­sump­tion.

The term mid­dle class may seem to be an easy con­cept to com­pre­hend at first but quantifying it is a tricky task. Un­like poverty, which has an ab­so­lute def­i­ni­tion in terms of caloric re­quire­ments, there is no stan­dard def­i­ni­tion of mid­dle class. Mak­ing it more com­plex are the sub­strata that di­vide it fur­ther into three seg­ments, namely lower-mid­dle, mid­dle-mid­dle and up­per-mid­dle class. The con­sump­tion range of $2-$20 per day per per­son, how­ever, is an ap­proach gen­er­ally used to de­scribe this seg­ment of so­ci­ety by re­searchers to base their stud­ies on and that too is sub­ject to vari­a­tions in dif­fer­ent coun­tries.

A de­vel­op­ing re­gion’s mid­dle class is the most de­sir­able tar­get for man­u­fac­tur­ers and pro­duc­ers as they are as­pir­ing and pur­pose­fully in­clined to­wards be­com­ing mod­ern­ized and have a con­sid­er­able amount to spend. The rich have al­ways had well-de­fined con­sump­tion pat­terns while the frus­tra­tion and mis­ery that pre­vails in a poor man’s life keeps him away even from long­ing for things that the mid­dle and up­per classes en­joy. Thus, the only seg­ment that have de­sires to the ex­tent of get­ting bet­ter ev­ery­day with grad­ual

and steady growth and trans­form­ing to­day’s wor­ries to to­mor­row’s ac­com­plish­ments, are the ones that are tech­ni­cally known to be ‘the bour­geon­ing mid­dle class.’ Like­wise, the em­pha­sis on the term ‘de­vel­op­ing re­gion’ is a ref­er­ence to the same ev­i­dence as the rich rep­re­sent­ing the de­vel­oped bloc and the poor be­ing de­scribed as un­der­de­vel­oped.

Stud­ies have shown that South Asia’s mid­dle class is the fastest grow­ing pop­u­la­tion group in the world, with In­dia and Pak­istan be­ing the two ma­jor con­trib­u­tors. Their mid­dle class, that made 1.4% of the over­all global pop­u­la­tion in 2000 is likely to swell man­i­fold and is ex­pected to grow to as much as 8.9% in three decades. This growth is not com­pa­ra­ble with other de­vel­op­ing re­gions as there has been a more than two-fold in­crease in the re­gion’s pop­u­la­tion from 1990 to 2010. As they say, the larger the mid­dle class a coun­try has, the more likely it is to in­crease its eco­nomic sta­bil­ity, thanks to the grow­ing con­sumer mar­ket and ex­pand­ing con­sumer cul­ture in this seg­ment.

It is gen­er­ally ob­served that the young and the rest­less – the youth – ‘con­ve­niently’ fall prey to the lures of con­sumerism. Con­sider, for in­stance, an hour’s tele­vi­sion trans­mis­sion in the two large cities - Karachi and Delhi. The ever grow­ing in­no­va­tion in com­mu­ni­ca­tion tools that are used to ap­peal to the mid­dle class mar­ket seg­ment has hit new heights. This is be­cause needs have sur­passed ba­sic re­quire­ments in food, mo­bile ser­vices, tele­vi­sion and other elec­tronic gad­gets, ac­com­pa­nied by mar­ket­ing schemes that of­fer loans and credit ser­vices that as­sist the young in achiev­ing im­me­di­ate grat­i­fi­ca­tion of their grow­ing de­sires.

It is quite sur­pris­ing to note that it merely took lit­tle less than a decade for mo­bile phones to be­come the dom­i­nant means of ac­cess­ing in­for­ma­tion in South Asia since its in­tro­duc­tion in 1995-96. For ex­am­ple, in In­dia the num­ber of mo­bile sub­scribers reached 90 mil­lion in com­par­i­son to 50 mil­lion sub­scribers for land­lines. In Pak­istan, 62,000 mo­bile users on an av­er­age are be­ing added daily. More­over, the im- prove­ment in ed­u­ca­tional stan­dards in the ur­ban sec­tors of the two cities and rise in in­comes al­lows more dis­cre­tionary spend­ing driven by the avail­able va­ri­ety op­por­tu­ni­ties.

With the avail­abil­ity and ac­ces­si­bil­ity of re­sources, mid­dle classes in In­dia and Pak­istan have al­ways been ac­tive in set­ting con­sump­tion trends of goods and ser­vices. In­dia, with its mas­sive pop­u­la­tion, has the largest share of the mid­dle class seg­ment over­all in the re­gion. The so­cial trends and life­styles in both coun­tries have his­tor­i­cally been in­flu­enced by one an­other. The young in the two ma­jor cities are also in­flu­enced by their ex­po­sure to mass me­dia on both sides.

Karachi is de­scribed as the fastest grow­ing mega city in Pak­istan. It is not sur­pris­ing then that for­eign brands are pen­e­trat­ing the city’s mar­ket due to the in­crease in the so­phis­ti­cated con­sump­tion habits of its mid­dle class. There is ev­i­dence that re­tail sales that were $57 bil­lion in 2005, had hit $80.4 bil­lion in 2010.

Brand-con­scious­ness was a term used with ref­er­ence to the up­per strata. Now brands like Ar­mani, Gucci, Dock­ers, Levi’s, KFC, McDon­ald’s and Pizza Hut are quite well-known in the mid­dle class seg­ment. These are de­sir­able and ac­ces­si­ble and a part of their lives.Richard Robbins, the au­thor of Global Prob­lem and the Cul­ture of Cap­i­tal­ism, says that the more that is pro­duced and the more that is pur­chased, the more we have progress and pros­per­ity.

Too many peo­ple spend­ing money they haven’t earned, to buy things they don’t want, to im­press peo­ple they don’t like, de­fines to­day’s ex­po­nen­tially grow­ing mid­dle class of South Asia.

In spite of a grow­ing econ­omy, in­fla­tion has been

on a con­sis­tent rise in In­dia.

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