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||2002 - 2007
Consumer spending can be categorized into regular spends and lifestyle spends.
Regular spending includes the basic necessities of life, while lifestyle
spending includes spending on a computer, internet, car, cell phone, etc.
Analysis of consumer spending in the past 10 years reveals that the average
consumer has been spending on an increasing number of different goods. There are
a number of factors affecting the consumer spending pattern in India; these
include growing income levels resulting in more disposable income with
individuals, changing attitudes towards consumption, changes in prices,
introduction of new products, availability of credit such as loans, mortgages
and credit cards, rising aspiration levels, increased literacy, growing brand
consciousness and rapid urbanization.
Spending habits are different for people
belonging to different sections of society. For instance, people
belonging to the middle class consider basic necessities and
education and spending toward the future of their children as
their top priorities, followed by lifestyle goods. The rich
class spends more on luxury goods and international brands. The
super rich class spends on ultra luxury goods. It is observed
that as disposable income increases, people prefer more of
branded goods, shift to processed foods, and the expenditure on
food, beverages, tobacco, and transport and communication also
increases. A comparison of consumer spending habits in 2002 with
those in 2007 revealed that expenditure on food, clothing and
personal care has remained more or less constant, but
expenditure on entertainment has increased.
Shopping habits of Indians are changing due to their growing
disposable income, relative increase in the younger population,
and the change in attitudes towards shopping. The emphasis has
changed from price consideration to design, quality and
trendiness. The desire to look and feel good is also guiding
factor for customers while making their purchase decisions.
Growing disposable income is also propelling demand for consumer
durables and eating in restaurants among Indians. Age is also a
major factor that affects the spending decisions of an
individual. For instance, people in 20-24 years age group spend
more on electronic / home appliances and movies, while people in
the 45-48 years age group spend more on vacations.
Consumer spending is an important factor that affects the
economic growth and development in a country. In the future,
India and China are projected to be the powerhouses of Asia in
terms of growth in consumption, wages, and GDP.
Consumer spending, India Economy, Growth, Financial Services
Sector, Credit Card, Debit Card, GDP, Asia, China, Excise duty, Government,
National Sample Survey Organization, KSA Technopak, Household Expenditure,
A Note on Consumer Spending Patterns in India
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