Not a single day passes, without some multinational organization, announcing its interest in further expansion, or plans to enter India.  The focus, for the most part, is in goods and services, that are consumed on a mass basis, by millions of people, from hundreds of thousands of shops round the country.

This is exactly why India, as a market, is still very attractive.  Prices of every essential commodity is going through the roof.  The middle classes have a very tough time, managing in these troubled times.  Yet, spending on a whole range of goods and services is not coming down.  In fact, there is an increase.

There are many reasons why the market keeps growing and growing, but he main reason is that there is a huge market, with different market segments, and each segment, is itself so huge, that it could run into several hundreds of thousands of people, ever ready to buy a particular product, that fits their fancy and price as well.

Yes, Indians are very price conscious, though the trend is now to spend a little liberally on quality products.  This is reason why the multinational organizations are flooding the market with a huge variety of products, all aimed at the huge middle class. 

However, the actual purchase of a product will depend on the purchasing power of the individual, though tastes are becoming common across cities. To examine this phenomenon, we need to understand the cost of living and allied factors.

For instance, in the two costliest of cities, that is, New Delhi and Mumbai, there is so much of black money in circulation, because of massive corruption, and this money flows into the real estate market, in buying costly clothes, in going to a small vacation, on air travel, in buying jewellery and storing it in the lockers of relatives and so on.  This class is the slightly rich or really rich class, as the money comes from illegitimate sources as well.

On the other hand, the struggling fixed income types are the real middle class, who actually buy goods and services of various types.  Let us assume, between the husband and wife, the monthly income is around thirty eight thousand rupees in Mumbai.  They would life in a flat some seventy five kilometers away from the city, and commute to their respective work places at least fifty kilometers away.  The couple would be spending at least ten thousand for rent, and the next ten for their food.  The rest they have would be saved at least up to five thousand per month, and the so-called "luxury" would be items like wooden furniture.  Let us stick to one item, which is now common in all middle class homes -- good curtains for the windows and doors.

Let us take another couple living in Chennai.  With the same thirty five thousand rupees, the rent would be still less, in the suburbs, that are easy to reach, by train or bus.  The entire range of food items are marginally cheaper, and the couple would have at least eight thousand to play with.  Assuming that their tastes are similar, the Chennai couple would go for a slightly costlier version of the curtains, while those in Mumbai, would go for a slightly less costlier version of the curtain.

Anyway, the purchases are made, and if hundreds of thousands of them do spend on curtains, and often indulge in repeat purchases too, one can just imagine the size of the market.

Branded furniture is now available, at very fancy prices. Those who consider the same as very costly, are happy buying furniture that is locally made, but is ditto in terms of design, and functional effectiveness.  In fact, in Mumbai, furniture is manufactured with a huge deal of innovation, and the functional utility of any furniture item, also comes with space saving mechanisms.  This is the beauty of the Indian market.

The foreign companies want a slice of all markets.  For example, various types of cosmetics are manufactured by a range of foreign multinational companies, that are very happy at marketing them to the youth and the newly married couples.  In fact, even those who are married for as many as fifteen years, are now spending huge amounts on looking good.  The beauty industry is one of the fastest growing in the world, thanks to the spread of the internet, and the kind of flashy advertisements that always stress on grooming and looking perfect.

Even in the tier two and tier three towns, gone are the days when kitchens were built in the old style with the ordinary cupboards, mostly the open type.  Today, the most humble of middle-class families spend even up to three hundred thousand rupees on what are called "designer kitchens".  These come in various shapes and sizes and is a huge industry by itself, what with the spread of apartments and flats in every district head quarter town of India.  Even the smaller towns, governed by the Panchayat, are now growing like never before, and there is a huge market for "designer kitchens".

Some years ago, when KFC, the multinational giant entered Chennai, skeptics pointed out that it could hardly succeed in a city considered largely vegetarian.  They were sadly mistaken, and wide off the mark.

Not only did the market boom, the market virtually exploded, and those skeptics had to eat further humble pie-- the Domino pizzas stormed the market, and the rest is history.  Chennai is one of the largest growing markets for junk food of various kinds, most of it, being dominated by the multinationals.

Come to the FMCG market, and one can see that the MNCs slog it out with several local brands, that have a huge following because of just one reason -- price.

Let us take detergents, for example.  In Tamil Nadu and in some South Indian markets, a particular brand called "Power" is making waves.  There is a very small market share that has been snatched away from the giant called Hindustan Lever and its terrific competitor, called Proctor and Gamble.  Yet, Power is a brand of its own.

Kali Mark, the company that has successfully marketed the soft drink, Bovonto, is another case-study.  Bovonto grows at the expense of both Pepsi and Coca Cola, and very happily at that.

The examples can go on multiplying.  However, the poor do also contribute to the growth of the markets, since they buy products in small sachets, and tend to upgrade when they have a little money. 

Hence, if one studies the Indian market in detail, he or she will notice that the rise of the middle class is one single most reason for the explosion of the market, notwithstanding the very high inflation.  In the years to come, the junk food markets, the real estate markets, the market for grooming, for good quality schools and so on, will grow from strength to strength and will simply explode, making India even more interesting.


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