Ever wondered why retail companies abroad are very interested in entering India? As of now they cannot enter India as there are some clauses for Foreign Direct Investment in the Indian retail sector (which was recently put on “hold“). Today’s Economic Times had carried an insight about Indian consumers, quoting few points from that article.
- Population of India: 1.1 billion
- Rural Indian consumers: 700 million (70 crore). Equivalent to almost half the size of Chinese population of 1.3 billion.
- Young Indian consumers: 500 million (50 crore). The young today consume automobiles, mobile phones, apparel and accessories. The 500 million is larger than the combined populations of Brazil, Russia, Germany and the UK (448 million).
- Middle class consumers: 350 million (35 crore). Consuming apparel, consumer electronics (TV, computers), personal care. This 350 million is equivalent to almost the size of the US population (315 million).
- Number of dollar millionaires in India (those worth more than Rs 5 crore): 127,000. These dollar millionaires buy luxury cars, luxury products, homes and apartments.
Needless to say the above numbers are very mouth watering to all retail chains trying to enter India. Ignore their sound bytes which say “We are eager to enter India. We love India”. They are looking at $$ to be made in India, nothing wrong. It is business.
As of now the argument is that the international chains will hurt small shop keepers. Today’s column “Online shopping is the real threat to small shopkeepers” is an interesting read. So where does the Indian online space stand today? From various articles recently published,
- India has about 80-100 million internet users
- 12 million broadband connections
- 100+ million mobile internet users
- Over $10 billion in ecommerce turnover (8-10 million ecom users are engaged, 150 million are ‘ecom ready’)
Offline numbers are far bigger than online but the journey of ecommerce revenues being bigger has just started.