All about India: Are we neglecting our other Asian consumers?
I attended the Alibaba expo in Melbourne about a month ago and was amazed by the growth in the Chinese retail sector and the trends that are rapidly dispersing as a result with Hema stores, omnichannel retail strategy and Daigous. But this article isn’t about those exciting trends. It’s about another market that I was given a glimpse into at the show – the elusive Indian retail consumer.
I always enjoy the facts, so here are some about the Indian consumer:
- The Indian market is the fastest growing, with the second largest global population
- India’s GDP is higher than China with a growth rate expecting to sit around 8% this year
- 25% of the market is under 25 – making it the youngest market in the world
- 7/8 users access the web via their phones
- This demographic are incredibly influenced by key opinion leaders or KOLs
- Total consumption expenditure is expected to reach US $3,600 BN by 2020 – from US$ 1,824 BN in 2017
The rise in disposable income in India is leading to the growth of the retail market, with average household incomes tripling over the next 20 years. It’s predicted to become the fifth largest consumer economy by 2025, currently sitting at number 12. The Indian market represents a growing opportunity – are Australian retailers missing out?
According to Austrade, the value of trade between India and Australia is $25.7bn AUD, with Australian investment into India valued at $10.3bn AUD.
What are they buying?
Austrade is focusing on agritech and dairy, premium F&B. Following similar trends in China, there is a great boom in demand for Australian FMCG goods and in the health and wellness sector. The best niche in the market, suggested by the Currency Shop is in luxury products. India makes a lot of mass-produced goods, so they’re interested in luxury items such as clothes, furniture, cars, electronics, accessories and designer label items. High-end consumer products are a rapidly growing segment experiencing 25%+ growth annually according to Victrade.
India imports lamb, honey, almonds, wine and cheese from Australia, according to Victrade and India currently imports US$6billion of gourmet, packaged and processed food.
How can I get into the market?
Amazon as well as Flipkart both have a great online presence in China. Listing your goods on these marketplaces provides an opportunity to test the market (for more on the Amazon marketplace opportunity, read this guide). Austrade highlights that it can be challenging to trade with India, albeit rewarding – so definitely do your homework first on what products work well and what regulations you may need to overcome.
What else do I need to know?
- The Indian consumer is willing to pay for high value products, but they want value for money – they are picky about product and strong on quality
- As India is so large and diverse, profiling a single ‘Indian consumer’ is about as accurate as the ‘Asian consumer’ – consumers in emerging cities are very different to big-city consumers – another reason you need to do thorough research!
- India is ranked 132/183 in the World Bank’s ‘Ease of doing business’ ranking – so you will most likely need help when entering this challenging, but lucrative market
- Australia’s government is committed to supporting the development of trade with China – Austrade, Victrade and the NSW Department of Industry all have support and policies in place to help our retailers cross the border to India
With ties set to strengthen between India and Australia, now is a good time to rethink your Indian retail strategy. You’ll hear from Austrade at New Retail ‘19’s China & Beyond stage and have the chance to meet industry leaders facing the same challenges in developing global strategy.