“There has been a significant increase in the value of financial and physical assets in India in the past 3 years which is driving an increasing wealth effect in ‘Affluent India’. The 3 key asset classes that have seen a large increase in value over FY19-23 have been 1) equities, 2) gold and 3) property. The increase has been the largest for equities and gold, while property prices have seen a higher rate of appreciation in the past 3-4 years,” says the report.
The impact of this trend is that companies that target the affluent customers are performing better than those serving the mass customers. These trends are visible in FMCG (Nestle India growing faster than Hindustan Unilever), footwear (Metro growing faster than Bata), fashion (Trent growing faster than V-Mart), passenger vehicles (SUVs growing faster than entry level cars) and 2-wheelers (Eicher growing faster than the industry).
As a result, companies in categories which largely address top income consumption like jewellery (Titan), travel (Makemytrip, Indian Hotels), premium retail (Phoenix Mills), premium online beauty (Nykaa) and premium healthcare (Apollo Hospitals) have seen strong growth, says the report.
4 sectors which have seen the largest increase in consumption for top 10% of urban India vs the average consumption in India are durable goods, medical services, out of home food and jewellery. The report then goes on and lists 10 investment ideas based on this affluence trend.
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