India’s booming economy
India is one of the fastest growing economies in the world. After a slow gradual process of opening its markets to foreign competition, India is beginning to experience a boom. With multinationals (multinationals) opening an increasing number of offices to outsource work, young people in India now have opportunities that their parents never had. These young people, along with their parents, are boosting the Indian economy by buying foreign brands and spending on other luxury items.
Many of these young people are in their 20s and still live in. They have few or no bills to pay and, in most cases, spend between 60% and 70% of their income on purchases (Source Wall Street Journal, Wallets crack open in India, January 3, 2006). Most of these young people are working for call centers or other tech companies, increasingly living a more Western consumer lifestyle.
India currently has around 17 million households or 90 million people who belong to the country’s middle class, with incomes between $ 4,500 and $ 22,000 according to the National Council for Applied Economic Research. The same organization has classified 287 million more people as “applicants” than those who hope to join the middle class. These applicants earn between $ 2,000 and $ 4,000. It is anticipated that by 2010 these individuals will join the ranks of the middle class to make a total of 561 million according to the economic council.
Despite the good prospects, many foreign companies are still struggling to enter the Indian market. Stores like Wall-Mart have been prevented from investing in operating their own stores in India. Many of the foreign brands have entered India through franchise agreements, which require companies to hand over a lot of control to local operators.
Whatever the case, the Indian economy is growing in size at a rapid rate, and the year 2006 will bring new consumers to the market at an ever-increasing rate of growth. The challenge most businesses face is how to sell products to brand-conscious consumers at a price they can afford and how to keep up with the growth rate, which in most cases is about 30% -50. % per year compared to 3% -5% on average in the developed world.
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