India's consumer market demonstrates strong optimism, with 61% of consumers expecting continued economic prosperity, according to a recent report by the global consulting firm Boston Consulting Group (BCG). This positive outlook, fueled by robust GDP growth, positions India as one of the most optimistic consumer markets globally.
The BCG report, titled 'Global Consumer Radar', compares consumer sentiment across developed countries like France, Germany, the UK, the US, and Japan, and developing nations including Mexico, Brazil, India, and China. The findings reveal a striking contrast: Indian consumers are largely unfazed by ongoing geopolitical conflicts, with only 17% believing that global events will hinder the country's growth. This figure is the second-lowest among the surveyed nations, surpassed only by China. In comparison, over 60% of consumers in the UK, France, and Germany anticipate a slowdown due to geopolitical issues.
This level of optimism significantly exceeds the global average. When asked about their expectations for the near future, 61% of Indian consumers anticipate continuous good times, while only 34% foresee widespread unemployment or depression. This yields a net optimism of 27%, placing India far above the global average of -12%.
The positive consumer sentiment is translating into increased household spending across various categories. Approximately 60% of Indian consumers expect their total spending to rise in the next six months, a notable increase from 50% in September 2024. The report indicates that all tracked categories show net expected increases, with autos (+70%) and mobile plans and devices (+63% each) leading the way.
BCG's 2023 Global Consumer Sentiment survey supports these findings, identifying India as one of the most optimistic markets compared to other global economies. The survey highlights that "micro" concerns, such as personal job security, household income, and finances, are the primary drivers of consumer sentiment, outweighing "macro" concerns like geopolitical issues, recession, or inflation. According to Nivedita Balaji, Associate Director at BCG, five out of ten Indians exhibit positive sentiment regarding both macroeconomic factors and micro factors like personal finances and future income outlook. This positive attitude is reflected in spending habits, with 36% of Indian consumers expecting to increase their spending across categories in the next six months, significantly higher than the global average of 17%. This spending is largely driven by young working adults interested in experiential categories like travel and leisure, entertainment, and big-ticket items such as automobiles and electronics. Globally, micro factors drive 83% of consumer resilience, while macro factors account for only 17%.
Looking ahead, BCG identifies India, China, the United Arab Emirates, and Saudi Arabia as growth markets for the next one to two years. Young working adults (18-34 years old) and affluent, higher-income households are expected to maintain a positive spending outlook. Moreover, India is projected to become the third-largest consumer economy by 2025, with consumption expected to triple to $4 trillion. This growth is supported by a 12% nominal year-over-year expenditure increase, more than double the anticipated global rate of 5%. The increasing influence of the internet, with online spending taking off and digitally influenced spending projected to reach $500 billion to $550 billion by 2025, further reshapes consumer behavior.
