What percentage of population have the buying power in India (income consumption capacity) to realistically be considered serious prospects for b2c products/services?
Updated in March 2019
Buying power in India really depends on your industry and products and how much of India’s massive population is really in your market but there are a number of factors.
It is true that the vast majority of nearly 1.4 billion citizens are either too young or too poor and do not have the buying power in India to afford high-end-foreign-made consumer products. It is also true that India’s middle-class is expanding rapidly and increasingly aspires to better products – and that “foreign” products are often perceived to be better quality. Below is a graphic description of the market we use a lot:
The premium market is non-existent in some markets, but in others there is a sizeable consumer base. However these consumers will probably be located in key hubs like Delhi and Mumbai and Bangalore and it can be difficult servicing them all with a single strategy. The rapid growth in the e-commerce in India has given these companies increasing access to these consumers, but there are still restrictions on foreign companies selling directly online to Indian consumers.
The middle-market is the one growing fastest, however consumers in this market still have far lower buying power in India than their counter parts in other countries. If you do have products that can be profitably priced for this market you are in a great position to make the most of this continually expanding market segment, but many foreign made and designed for price points that just don’t make sense to this market segment. What this means is that you may need to adapt or develop products specifically for this market or keep it out of your calculations.