In the current economic landscape, there is a stark contrast in consumer demand across different income levels. Kenneth Andrade, founder and CEO of Old Bridge Capital Management, believes that while consumption at the higher end of the demographic pyramid is strong, the lower end is facing considerable stress and limited demand.
„Consumer is back on the table for us, especially if you’re going to take stakes in individual businesses….What we’re essentially looking for is which company can create a premium and take consumers to the next level of pricing,” managing director Andrade said. A fund worth $750 million.
„The era of mass consumption of cheap clothes, footwear, etc. is behind us. We are in an era where the affluent, the well-educated earn more and move towards class consumption,” he said. said.
According to a note released by BNP Paribas in October, this trend of the rich getting richer will positively impact sectors such as automobile manufacturing, insurance, mutual funds, jewellery, multiplexes and healthcare. Income tax filers with annual income above ₹10 lakh saw a 20% increase from 2012 to 2021, in stark contrast to 4.5% growth for those with income below ₹5 lakh, the data showed.
In fact, India’s consumer market is poised to become the world’s third largest by 2027, fueled by the rise of middle- and high-income households, according to a report by Fitch Solutions’ BMI as cited by CNBC. India, currently ranked fifth, is expected to see a 29% increase in real household spending, which Fitch predicts will push the country to third place in the global market.
(Edited by: Shweta Mungre)
Originally Published: November 10, 2023 at 1:05 PM IST
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