Chal­lenges and op­por­tu­ni­ties emerge as In­dia be­comes third­largest con­sumer mar­ket by 2030

The Myanmar Times - Weekend - - World - JAN­UARY 11, 2019

In com­ing decades, con­sump­tion growth and the Fourth In­dus­trial Revo­lu­tion will cre­ate tremen­dous op­por­tu­ni­ties in the emerg­ing In­dian mar­ket. Dur­ing 2018, ex­ten­sive pro­pri­etary re­search was con­ducted on In­dia, the world’s largest democ­racy, and among the world’s fastest grow­ing economies. The World Eco­nomic Fo­rum’s new re­port, Fu­ture of Con­sump­tion in Fast-growth Con­sumer Mar­ket – IN­DIA iden­ti­fies key forces that will shape con­sump­tion in In­dia and is a call to ac­tion for mul­ti­stake­holder col­lab­o­ra­tion to build an in­clu­sive fu­ture for the coun­try.

“As In­dia con­tin­ues its path as one of the world’s most dy­namic con­sump­tion en­vi­ron­ments, pri­vate and pub­lic-sec­tor lead­ers will have to take shared ac­count­abil­ity to en­sure such con­sump­tion is in­clu­sive and re­spon­si­ble. I am con­fi­dent that strate­gic fore­sight from this re­port will con­trib­ute to in­spir­ing ac­tion and re­al­iz­ing a pros­per­ous fu­ture for In­dia with sus­tain­able ben­e­fits for both busi­ness and so­ci­ety,” said Zara Ingilizian, Head of Con­sumer In­dus­tries and Mem­ber of Ex­ec­u­tive Com­mit­tee, World Eco­nomic Fo­rum.

With an an­nual GDP growth rate of 7.5 per­cent, In­dia is cur­rently the world’s sixth-largest econ­omy. By 2030, do­mes­tic pri­vate con­sump­tion, which ac­counts for 60pc of the coun­try’s GDP, is ex­pected to de­velop into a $6 tril­lion growth op­por­tu­nity. If re­al­ized, this would make In­dia’s con­sumer mar­ket the third-largest in the world, be­hind the US and China.

The fu­ture of con­sump­tion in In­dia in 2030 is an­chored in ris­ing in­comes and a broad-based pat­tern of growth and ben­e­fit shar­ing. It is an­tic­i­pated that the growth of the mid­dle class will lift nearly 25 mil­lion house­holds out of poverty. In ad­di­tion, In­dia will have 700 mil­lion mil­len­ni­als and Gen Z con­sumers, who have grown up in a more open and con­fi­dent coun­try.

By 2030, there will be op­por­tu­ni­ties to by­pass Western growth tra­jec­to­ries, such as those pre­sented by more than 1 bil­lion in­ter­net users, many of whom will only use mo­bile plat­forms, driv­ing the need for busi­ness model in­no­va­tion. Fi­nally, fu­ture con­sump­tion growth will come from the “many In­dias” – the di­verse, rich and densely pop­u­lated cities and the thou­sands of ge­o­graph­i­cally dis­persed, de­vel­oped ru­ral towns.

This pos­i­tive vi­sion for the fu­ture of In­dia will only ma­te­ri­al­ize if busi­ness and pol­icy-mak­ers pur­sue an in­clu­sive ap­proach to the coun­try’s eco­nomic and, hence, con­sump­tion growth.“as In­dia rapidly trans­forms into a true mid­dle class econ­omy, not only do we see this in­come group fi­nally com­ing into its own, we also see the in­clu­siv­ity and eq­ui­table growth agen­das be­ing served much bet­ter than ever be­fore. It’s an ex­cit­ing fu­ture for firms that wish to un­lock the con­sump­tion op­por­tu­nity in In­dia,” as stated by Nikhil Prasad Ojha, Part­ner and Leader of the Strat­egy prac­tice at Bain In­dia. To un­lock the po­ten­tial of these op­por­tu­ni­ties and to en­sure eq­ui­table growth, the re­port iden­ti­fied three crit­i­cal so­ci­etal chal­lenges that need to be ad­dressed:

Skills devel­op­ment and em­ploy­ment for the fu­ture work­force

As nearly 10-12 mil­lion workingage peo­ple emerge in In­dia over the next decade, the coun­try faces a huge chal­lenge in pro­vid­ing the work­force with the right skills and gain­ful em­ploy­ment to en­able the in­come growth be­hind the en­vi­sioned con­sump­tion of the fu­ture. More than one-half of In­dian work­ers will re­quire reskilling by 2022 to meet the talent de­mands of the fu­ture. On av­er­age, they will each re­quire an ex­tra 100 days of learn­ing. In­dus­try, civil so­ci­ety, ed­u­ca­tion in­sti­tu­tions and pol­icy-mak­ers need to join ef­forts to close the cur­rent skills gap.

So­cio-eco­nomic in­clu­sion of ru­ral In­dia By 2030, 40 per­cent of In­di­ans will be ur­ban res­i­dents. There will, how­ever, be more than 5,000 small ur­ban towns and more than 50,000 de­vel­oped ru­ral towns with sim­i­lar in­come pro­files, where as­pi­ra­tions are fast con­verg­ing with those of ur­ban In­dia. Nev­er­the­less, phys­i­cal con­nec­tiv­ity, dig­i­tal con­nec­tiv­ity and fi­nan­cial in­clu­sion in­come is con­strain­ing the spend­ing and well-be­ing of ru­ral dwellers, and these “ac­cess-bar­ri­ers” need to be ad­dressed to en­sure so­cial and eco­nomic in­clu­sion in In­dia over the next decade.

Healthy and sus­tain­able fu­ture New health con­cerns, such as obe­sity and non-com­mu­ni­ca­ble dis­eases, and ur­ban cen­tres grap­pling with high rates of con­ges­tion and air, wa­ter and waste pol­lu­tion are un­der­min­ing the well-be­ing of In­dia’s cit­i­zens. As an illustration of the mag­ni­tude of just one di­men­sion of the air-wa­ter-waste-con­ges­tion chal­lenge, nine of the world’s 10 most air-pol­luted cities are in In­dia, in­clud­ing its cap­i­tal, New Delhi. To sus­tain fu­ture growth, busi­ness and pol­icy-mak­ers must take the ini­tia­tive on im­prov­ing health and live­abil­ity for In­dia’s cit­i­zens by pro­vid­ing them with ac­cess to af­ford­able health­care, pro­mot­ing sus­tain­able devel­op­ment, and seek­ing so­lu­tions to ur­ban con­ges­tion.

As nearly 10-12 mil­lion workingage peo­ple emerge in In­dia over the next decade, the coun­try faces a huge chal­lenge in pro­vid­ing the work­force with the right skills and gain­ful em­ploy­ment to en­able the in­come growth be­hind the en­vi­sioned con­sump­tion of the fu­ture. More than one-half of In­dian work­ers will re­quire reskilling by 2022 to meet the talent de­mands of the fu­ture. On av­er­age, they will each re­quire an ex­tra 100 days of learn­ing. In­dus­try, civil so­ci­ety, ed­u­ca­tion in­sti­tu­tions and pol­icy-mak­ers need to join ef­forts to close the cur­rent skills gap.

“In­dia is at a tip­ping point, both in terms of eco­nomic growth and in the hu­man devel­op­ment of its bil­lion­plus cit­i­zens. As the coun­try enters a new era of en­vi­sioned growth, col­lab­o­ra­tive ef­forts, es­pe­cially publicpri­vate col­lab­o­ra­tions to ad­dress key chal­lenges can un­lock the full po­ten­tial of a young, progressive and dy­namic na­tion to es­tab­lish In­dia as a model for the world’s fast-grow­ing con­sumer mar­kets” said Mayuri Ghosh, Project Lead, Fu­ture of Con­sump­tion Sys­tem Ini­tia­tive, World Eco­nomic Fo­rum.

The re­port pro­duced in col­lab­o­ra­tion with Bain & Com­pany builds on in-depth con­sumer sur­veys con­ducted across 5,100 house­holds in 30 cities and towns in In­dia and draws from more than 40 in­ter­views with pri­vate and pub­lic-sec­tor lead­ers.

This re­port is part of a multi-year project “Fu­ture of Con­sump­tion in Fast-growth Con­sumer Mar­kets”, which fo­cuses on the evo­lu­tion of con­sump­tion in emerg­ing mar­kets, such as China and In­dia. The re­port pro­vides fore­sight on driv­ers of growth and levers of in­clu­siv­ity in such mar­kets, and es­tab­lishes pri­or­i­ties for pri­vate and pub­lic-sec­tor stake­hold­ers, with the ul­ti­mate ob­jec­tive of shap­ing con­sump­tion-led in­clu­sive growth in emerg­ing mar­kets.

– World Eco­nomic Fo­rum

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