The economies of the Asian region are practically driving the world economy today. After China it is the Indian economy which is growing at the fastest pace. The Indian economy is expected to continue growing at a fast pace in the coming decade. Boston Consulting Group has done a detailed study of the Indian market conditions. According to the report India is poised to become a significant luxury market by 2020. The Indian consumer spend and particularly luxury spending is expected to grow 3.6 times in the decade between 2010 and 2020. The projected figure for 2020 is $3.6 trillion.
Abheek Singhi who is the India based partner of the BCG and has coauthored the report says that it is the generation of Indians who have grown up in the 1990s, when the Indian economy had started reforming and liberalizing, are driving this growth. It is this generation which is reaching their peak earning period during this decade. According to the data analyzed for the report India is about eight years behind China, hence it is expected that in 2020 India will be where China is today.
Only eight percent of the households are expected to be affluent by 2020 but they would be responsible for 26% of the national consumption. The trend of urbanization is also evident as it is expected to reach 35% compared to 31% in 2010. Urban dwellers have better access to goods and services and hence consume more when compared to rural dwellers. The concept of joint family or the extended family is also on the decline. However, the most important fact that emerges from the study is that by 2020 India will responsible for 5.8% of the global consumption. It is the right time for the brands from luxury industry to establish themselves in the Indian market so that they can reap the benefits when the demand increases.