According to Goldman Sachs Group Inc., Indian companies focusing on premium goods are expected to outperform their broad-based counterparts as the affluent class in the country is projected to nearly double to 100 million people within the next three years.
Over the past decade, strong economic growth, a stable monetary policy and high credit growth have boosted the purchasing power of the top earners in India. The number of affluent Indians, earning above USD 10,000 (Rs 8,28,723) annually, has risen from 24 million consumers in 2015 to the current 60 million, constituting 4.1 per cent of the population, as highlighted in a recent Goldman report.
India, the world’s fifth-largest economy, is anticipated to become the third-largest by 2027, according to the International Monetary Fund. The rising spending power among the country’s middle class is expected to benefit companies with premium brands in leisure, jewelry, out-of-home food, and healthcare, according to Goldman.
The report notes a significant increase in the value of financial and physical assets in India over the past three years, contributing to growing wealth. While gold and property remain important stores of wealth, there has been a notable shift, with more households investing in equities through direct stocks or mutual funds in the last five years, according to Goldman.
However, the spending power disparity between the top earners and the middle class remains an issue in a country where GDP per capita is less than USD 3,000 annually. Despite over 960 million issued debit cards and 93 million post-paid cell phone connections in India, Goldman points out that only 30 million Indians can afford a vehicle.
Source: businessworld.in
