The Great Indian Market

August 9, 2005

Results from the NCAER’sMarket Information Survey of Households

In association withBusiness Standard

The rapid rise in incomes will lead to an even faster increase indemand for consumer durables and expendables

As a result, the ownership of goods will also go up significantly

What will power this is the increased usage in different incomeclasses

coupled with the rise in the size of the Great Indian Middle Class

Key Findings

13,149 8,727 6,024 3,437White Goods

6,774 4,335 3,006 1,850Refrigerators

9,957 6,295 4,580 1,785CTV Regular

8,369 4,663 2,599 760Motorcycles

3,466 1,560 788 276Cars

2009-102005-062001-021995-96

Demand of Consumer Durables(Figures in '000)

3,364 2,596 1,977 1,190WashingPowder

50 33 21 7Shampoos

10,586 8,514 6,977 4,582Edible Oil

2009-102005-062001-021995-96

Demand of Consumer Expendables(Figures in 000 tonnes)

Penetration of Consumer Durables(Number of households owning goods per '000 households)

451.7319.1247.1149.4White Goods

224.9160.7134.086.1Refrigerators

314.0213.0145.672.0CTV Regular

282.6147.670.829.3Motorcycles

91.450.230.016.1Cars

2009-102005-062001-021995-96

809.6745.6693.0607.4WashingPowder

583.2480.7391.7182.1Shampoos

999.6999.0998.3912.7Edible Oil

2009-102005-062001-021995-96

Penetration of Expendables(Number of households using consumables per '000 households)

Income Groupings and Ownership(Ownership per household, 2001-02)

Annualhousehold

Income('000)

Households(Million)

TwoWheeler

CTV Ref AC Car

Deprived <90 135.4 0.07 0.05 0.04 0.00 0.00Aspirers 90-200 41.3 0.47 0.40 0.34 0.02 0.04Middle Class 200-1,000 10.7 0.70 0.73 0.62 0.15 0.32Rich > 1,000 0.8 0.71 0.99 0.74 0.43 0.83

Total 188.2 0.20 0.17 0.14 0.01 0.03

Growing Prosperity - All India

1,31,176 1,35,378

28,901

3,881

651

189

63

11

5

41,262

9034

1712

546

201

40

20

1995-96 2001-02

<90

91-200

201-500

501-1,000

1,001-2,000

2,001-5,000

5,001-10,000

10,001+

1,32,249

53,276

13,183

3,212

1,122

454

103

52

75,304

22,268

6,173

2,373

1037

255

141

2005-06 2009-10

<90

91-200

201-500

501-1,000

1,001-2,000

2,001-5,000

5,001-10,000

10,001+

1,14,394

Income figures in ‘000 per annum at 2001-02 prices, households in ‘000 numbers

Rural markets will increase in importance

How do middle class consumers in the rural Indiadiffer from their urban counterparts, and how willthis change in the years to come?

Do consumption patterns differ across occupationgroups in urban and rural areas as well?

Key Findings

61.360.158.1Low cost items

56.756.950.0Fans

23.723.923.8White goods

44.254.554.0Television

37.936.037.9Automotives

10.98.02.1Cars/Jeeps

57.758.252.7Mopeds

48.339.847.3Motorcycles

39.939.433.1Scooters

Consumer Durables

2009-102001-021995-96

Rural Demand- Consumer Durables(% of All India)

54.950.850.4Washingpowder

75.671.468.7Washing cakes

54.752.549.8Toilet soaps

33.031.927.2Shampoos

30.342.836.0Packagedbiscuits

28.127.328.6Healthbeverages

62.967.164.3Edible oil

Consumer Expendables

2009-102001-021995-96

Rural Demand- Expendables(% of All India)

Consumer Durables

2001-02 2009-10 2001-02 2009-10Motorcycle 134.3 320.7 109.0 250.9Television 942.8 1258.9 616.3 561.3Car 31.4 52.2 1.6 3.5

Consumer Expendables

2001-02 2009-10 2001-02 2009-10Edible Oil 1000.0 1000.0 1000.0 1000.0Shampoos 827.8 1000.0 354.5 458.4Washing Powder 904.7 1000.0 775.4 946.9

Urban Rural

Urban Rural

Urban-Rural Usage Pattern in Middle Income Group(Per 000 Households)

Two Wheelers

2001-02 2009-10 2001-02 2009-10Salary Earner 495.0 834.0 286.0 755.0Professionals 859.0 1539.0 521.0 1354.0Televisions

2001-02 2009-10 2001-02 2009-10Salary Earner 1080.0 1452.0 744.0 1056.0Professionals 1128.0 1759.0 929.0 1201.0

Urban Rural

Urban Rural

Ownership Pattern across Occupational Groups(Per 000 Households)

Do consumption patterns differ across towns of different sizes as welland how is this likely to change over the next few years?

How do consumption patterns vary across the top cities?

How important are the top cities in the demand for major durablestoday?

Do more Mumbaikars own cars than Delhi-ites? How does the usageof durables differ across cities?

Key Findings

Town Size Two wheeler White goods Television Low cost goods>50 lakh 382.02 1149.95 1185.49 4150.1910-50 lakh 627.02 970.91 792.01 4825.135-10 lakh 504.19 756.54 845.5 4419.35< 5 lakh 346.07 427.68 682.53 3837.46

Ownership Pattern by Size of Town(Per 000 Households)

Household Expenditures Across Top Cities (Proportion of total expenditure in households earning

over Rs 3 lakhs per annum)

Cities Health Outdoor eatingVijayawada 4.6 3.3Indore 7.7 4.4Bangalore 8.2 3.3Chennai 5.2 4.9Delhi 6.3 4.8Mumbai 3.3 3.8Ahmedabad 6.9 5.1Kolkatta 4.1 5.1

Durables StockTop 67 Cities All India (% Share)

Scooter 243.2 78.6 44Motorcycle 138 70.8 27CTV Regular 486.7 145.6 47Cars/Jeeps 145.8 30 68Refrigerators 492.5 134 52Washing Machines 316.4 72.4 61

Usage Pattern

Share and Usage Pattern of Top 67 Cities in 2001-02

(Ownership in per ‘000 households; share of stock in percent)

422.3574.9212.1301.0Total

857.6822597.1526.8>300

703.8616.1391.6272.7180-300

647.9503.2226.3163.2135-180

221.5224.867.880.390-135

29.429.200<90

MumbaiDelhiMumbaiDelhi

Washing MachinesCarsIncome Class

(Rs. 000)

Usage of Durables in Delhi and Mumbai(Ownership per '000 household)

Does it make more sense to target a marketingplan for refrigerators at two wheeler owners ascompared to those owning TVs or even ACs?

Who buy second hand goods in India and in whichproducts are they more widely preferred?

Key Findings

Durables All India Urban RuralTwo wheelers 21.8 31.3 9.2Cars/Jeeps 83.8 89.0 17.1Televisions 26.3 36.7 8.7AC 85.9 88.2 31.7Cellphones 64.5 80.4 35.8Credit cards 12.9 36.1 4.0

Ownership of Refrigerators by those owing other Durable(Percent of households owing various durable)

5.61.4Washing Machines

2.34.0Refrigerators

3.01.8Color TV

12.54.5Motorcycles

16.311.2Scooters

RuralUrban

Share of Second Hand Goods in 2001-02(% of total purchase)

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