This summary article showcases ideas from a recent episode of BCG’s Imagine This… podcast. Alongside BCG director and partner Kanika Sanghi, we explore a future where India drives consumer tastes and consumption.
BCG’s AI tool StoryBuilder generated this summary—with oversight and editing provided by humans.
Imagine this: It’s 2035, and India has transformed into a global consumer powerhouse. The nation has not only become the world’s third-largest consumer market but is also poised to close in on the number two spot. In this future, India’s rising consumer class is setting global trends and redefining market dynamics across industries.
Consumer Transformation and Rising Affluence
India’s consumer landscape has undergone a dramatic shift. Affluence is rising as the middle- and upper-income segments expand rapidly.
- Income distribution has changed substantially—with affluent households increasing from around 10% in 2010 to 19% today and projected to reach 30% by 2035.
- The traditional model of receiving Western-developed products is giving way to homegrown innovations designed for a more sophisticated market.
Shifting Consumption Patterns and Behavioral Change
With rising affluence, consumer spending has moved beyond basic necessities toward discretionary categories that add value to modern living.
- There is a notable shift from spending on essentials—food, utilities, and rentals—to investments in education, travel, health, and leisure.
- Consumers are now driven by the desire to upgrade their lifestyles rather than replacing products only when they fail.
- This behavior reflects a cultural move toward self-improvement and staying updated with the latest trends.
The Impact of Gen Z: Digital Natives Shaping Trends
India’s Gen Z is emerging as a powerful force that is reshaping consumer habits with a unique blend of digital fluency and authentic engagement.
- It is the largest generation in India—surpassing the entire US population in size—and brings a fresh perspective to consumption.
- This cohort is wired differently; they prefer immersive visuals and authentic communication over traditional advertising methods.
- Their engagement is not confined to digital channels—they influence household decisions and drive trends through both online and offline interactions.
Localizing Global Strategies: Embracing India’s Diversity
Companies must understand that India is not a homogeneous market. Success hinges on recognizing and adapting to its vast cultural, linguistic, and regional diversity.
- Multinational corporations that have effectively localized their offerings have achieved significantly higher returns in India compared with their global averages.
- Products such as automobiles have been redesigned for the Indian market—with adjustments made to accommodate local road conditions and consumer needs.
- A tailored approach that respects regional differences is critical for capturing the full potential of India’s diverse market.
The Impact of a More Educated Female Population
A significant transformation in India’s socioeconomic fabric is the rising role of women, driven by higher education and changing societal norms.
- Women’s literacy rates have doubled over the past 40 years, and their enrollment in higher education now surpasses that of men.
- Educated women are not only prioritizing better education for their children but are also becoming pivotal consumers who drive growth in sectors like packaged food, appliances, and online shopping.
- Increased female participation, both as consumers and in the workforce, is set to boost demand for convenience-driven and innovative products and services.
Leveraging Digital Public Infrastructure and Omnichannel Engagement
India’s robust digital public
infrastructure
is revolutionizing how brands engage with consumers, particularly the tech-savvy youth.
- The nation’s digital ecosystem enables seamless connectivity that supports immersive, personalized experiences for consumers across platforms.
- Although Gen Z members are digital natives, they value physical interactions that build trust—making omnichannel strategies essential.
- Digital tools are not only enhancing consumer engagement but also improving public services such as health care and education, setting a new standard for innovation.
Infrastructure and Policy Reforms: Paving the Way for Growth
Massive investments in infrastructure and significant policy reforms are laying the foundation for India’s continued economic ascent.
- The government’s proactive policies and investments—exceeding a trillion dollars in upgrading roads, bridges, and ports—are transforming logistics and connectivity.
- Improvements in the ease of doing business, marked by a leap from a rank of 142 in 2014 to 63 today, reflect the success of reforms like the streamlined permitting processes.
- Urban infrastructure remains a challenge as cities grow rapidly, but ongoing investments and innovative solutions are gradually easing congestion and boosting efficiency.
Emerging Innovations to Sustain Growth
India is leveraging a combination of traditional wisdom and cutting-edge technology to drive sustainable growth in a rapidly evolving market.
- Strategic investments in clean energy, advanced digital infrastructure, and education reform are critical to sustaining India’s growth trajectory.
- Innovations in AI, sustainable agriculture, and biotechnology are poised to propel the nation forward, particularly when integrated with the robust digital ecosystem.
- Overcoming bureaucratic hurdles and enhancing urban planning are essential for turning these innovations into scalable, real-world solutions.
Action Items for CEOs
- Embrace digital prowess. Invest in digital infrastructure and technologies that cater to India’s tech-savvy consumers, ensuring that your brand engages across both online and offline channels.
- Tailor your offerings. Recognize India’s diversity—adapt products and marketing strategies to meet regional tastes and cultural nuances rather than applying a one-size-fits-all approach.
- Focus on innovation. Commit to developing locally relevant innovations that can scale globally. Leverage AI, sustainable practices, and biotechnology to stay ahead of the curve.
- Pursue omnichannel strategies. Combine digital and physical engagement strategies to build trust and deliver immersive experiences that resonate with both Gen Z and other consumer segments.
- Commit to long-term engagement. Recognize that success in India requires sustained commitment. Experiment with pilot projects, learn from failures, and continually adapt strategies to stay relevant in a dynamic market.
- Build local partnerships. Collaborate with local entities to better understand market nuances and develop strategies that drive higher returns in the Indian market.
- Monitor policy trends. Stay abreast of ongoing policy reforms and infrastructure developments to anticipate market changes and adjust operational strategies accordingly.
- Invest in sustainable growth. Focus on initiatives that combine traditional practices with modern technology to drive long-term, sustainable growth in both urban and rural areas.
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Kanika is the global lead for market acceleration at BCG.
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