Consumption
Will Shift to Lifestyle Categorie

The current consumption pattern in India is dominated by basic categories such as Food & Grocery (F&G) which occupies as high a share as 63% of the retail consumption basket of India. However, this is projected to fall to 50% by 2016 as people shift their spending to lifestyle categories. Over time as income levels in India increase, the propensity to spend would also increase as consumption and debt become more acceptable. Easy availability of low-cost credit has given an unprecedented boom to purchase of high ticket items e.g. housing and automobiles.
  • Personal credit off-take has increased from about US$ 11 billion in 2000 to about US$ 36 billion in 2004.
  • The total base of credit cards issued in India is approximately 5 million, growing at a CAGR of 30%.
  • More than 25% of the bank loan assets are in retail sector ensuring high returns and are likely to cross US$ 5,700 billion by 2010.
  • Industry estimates a 22% CAGR in retail lending over financial years 2005 to 2009.
More usage of plastic money is leading to a rise in average billing value on lifestyle categories like personal care, fashion accessories, CDIT, recreation etc. and subsequently increasing demand of categories and brands that are predominantly impulse purchases. Consumers are evaluating EMI rather than MRP and there is a dramatic shift in definition of capital and revenue expenditure.










  • Easy availability of
    low-credit has
    encouraged a kind of purchase boom
  • Consumers shifting
    evaluation from MRP to EMI

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