Rama Bijapurkar is the country’s foremost market strategist and consumer economy expert. She talks to Vinay Kamath on the great Indian consumption story of the future.

Will millennials continue to spend as the previous generation? If not, will that hit consumption? Their sense of ownership, either of a private vehicle or a house, is very different from that of the earlier generation.

Millennials in India are mostly from modest-income households with onerous responsibilities. I really wish we would not lose sight of this fact. Their priorities will be different. Yes, with Ola/Uber, big-city millennials may not struggle and stretch to buy a car. But for rural millennials, having their own personal transport, be it a car or a two-wheeler, is priority as they want to widen their footprint of activity.

Yes, millennials live more for today and less for the future because of the optimism and upward mobility that has come from a thriving Indian economy of the last two decades. And yet, the rural poor dream of owning their own homes early on. So, I take transplanted theories on millennials with a large pinch of salt! The factors that shape them here are different.

Economists have talked about India’s ‘missing middle class’. Have the numbers been overestimated?

Yes they have, depending on whose vantage point we look from (the detergent-bar marketer or the washing machine one, or the coaching class owner). But I don’t see the intellectual basis for a lot of the discussion and obsession around the middle class. Of course, every class in the middle is a middle class — or isn’t it?

Is overspending on mobile phones by this generation eating into their disposable incomes and impacting consumption of other white goods and not leaving room for other buys?

Far too many categories are jostling for limited consumer income. So, it’s not a ‘this first, that later’ model. It’s just “where is the category excitement? What can I afford? What benefit does it give me?” If mobile phones and data are so cheap and give the most joy, of course, that’s where people will go. iPhone sales, by the way, have halved! But phones are probably eating into everyday FMCG more than into other consumer durables

Is India becoming like the US — consumers borrowing to spend on consumption?

Not if you look at household-debt-to-GDP ratios. At the lower income end, it has always been so, because of how very fragile their household P&L (profit and loss) is.

Today, much of the revenue from consumption is perhaps going to non-Indian-owned companies. What is the implication of this?

Not true; it’s not supported by data. Unless you mean Amazon and Flipkart?

But the products their marketplaces offer are so Indian; by and large — except for mobile phones and white goods — the market leaders are still Indian. I would, by the way, count Maruti Suzuki as an Indian company. Consumers don’t care about anything but value received, and they attach more value to features than to Indian/foreign.

Will online retail play a greater role in the consumption story?

Online everything will play a role. So will offline if real-estate prices drop, and physical retail gets its act together and brings back the joy and magic of real retail brands. Online-to-offline models are also in the making.

So we will, as always in India, see a glorious khichdi ; consumers like ‘and’ more than they like ‘or’.

What will be the consumption drivers in the future?

Definitely infrastructure improvement — every unit of roads, public transport, electricity, recreation spaces and so on will sharply add to consumption.

Second, I believe that supply has been lacklustre, and lacking, too, for the enormity and variety of consumption desire our consumers have.

A supply-side explosion with differentiated brands and offers for the numerous unsolved needs will drive consumption hugely; there is a huge gap between customers’ desires and suppliers’ offers today.

Third, of course, a humming economy will drive consumption as income levels grow.

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