beyond the metros, india's growth frontiers

BEYOND THE METROS: INDIA'S GROWTH FRONTIERS

March 2016

KEY TRENDS IN CONSUMER EXPENDITURE

Of the top 18 cities that have been analysed, Kannur stands out in terms of its high food and transport spending, while Kochi spends the most on food and discretionary items. Households across the 18 cities will be spending less on food and more on travel in 2030, as a shift is seen towards discretionary spending.

Consumer expenditure trends in Indian cities

KEY TRENDS IN CONSUMER EXPENDITURE

© Euromonitor International PASSPORT 4BEYOND THE METROS: INDIA'S GROWTH FRONTIERS

Highest spending on food and non-alcoholic beverages in 2015KEY TRENDS IN CONSUMER EXPENDITURE

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Consumers across the 18 cities spent the highest proportion of their incomes on food and non-alcoholic beverages in 2015.

Growth in disposable incomes, an expanding middle class and changing lifestyles will drive packaged food uptake and eating out among consumers.

Transport commanded the second highest consumer expenditure in 2015, partly explained by growing penetration of passenger cars, as well as expenditure on various forms of public transport.

Kannur had the highest consumer expenditure on food and non-alcoholic beverages and on transport in 2015.

High emigration rates from the state of Kerala, in which Kannur is a key city, to Middle Eastern nations, and rising middle class incomes have led to increasing penetration of microwave ovens and greater uptake of packaged food and ready meals.

Continued growth in penetration of passenger cars has been helped by rising household incomes, leading to high transport expenditure.

Kochi was the only city in 2015 showing low consumer expenditure on transport but high expenditure on food and non-alcoholic beverages and miscellaneous goods and services, which covers jewellery, silverware, watches, financial services, travel goods and other services.

Kannur spends most on food and transport KEY TRENDS IN CONSUMER EXPENDITURE




Tourism and cars drive discretionary spending in 2030KEY TRENDS IN CONSUMER EXPENDITURE




Food and non-alcoholic beverages will continue to be one of the most important consumer expenditure segments in 2030 in the 18 cities, with major implications for the packaged food and consumer foodservice industries.

In 2030, transport will account for a high proportion of consumer expenditure all across 18 cities, including Kochi, due to greater penetration of cars, government infrastructure investment and higher prices for these facilities.

Discretionary consumer expenditure will grow over the period to 2030, as shown by the higher share of spending on tourism, household goods and miscellaneous goods and services across the 18 cities.

As consumers spend more on discretionary items, the share of expenditure on food and non-alcoholic beverages will witness a relative decline over the period to 2030.

The share of consumer expenditure on hotels and catering will be higher in 2030, with consumers spending more on travelling, helped by government initiatives to promote tourism. Greater travel spend clearly has positive implications for the travel and tourism industry.

The share of expenditure on clothing and footwear will remain unchanged but the share of household goods and services will increase across the 18 cities over 2015-2030, with households spending a fair proportion of their incomes on day-to-day household products.

However, the luxury apparel industry is expected to benefit from growing disposable incomes and changing consumer choice.

Growth in the consumer durables industry will be driven by higher spending on household good and services including on televisions and refrigerators.

Less spending on food and more on travel in 2030KEY TRENDS IN CONSUMER EXPENDITURE



FOR FURTHER INSIGHT PLEASE CONTACTSwarnava AdhikaryEconomies and Consumers Senior Analyst

[email protected]

Shreyansh Kocheri Research Analyst

[email protected]

Dheeraj WadhwaConsulting Analyst

[email protected]


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