Accordingly, the group that was classified as middle class (households with annual incomes of Rs 2 to Rs 10 lakh at 2001-02 prices) in 1995-96 was just 25 million-strong, has grown to 126 million in 2007-08 and further 153 million by end the decade. Our estimates show that in 2001-02, middle class households were around 6% of all Indian population and expected to grow to 13% in 2009-10, an annual growth rate of nearly 13%.
More importantly, while the middle class forms just 11.4% in 2007-08 of the total Indian households its share of total income is nearly one-fourth and saves more than 55% of its income. The growing clout of the middle class becomes even more apparent when one looks at the ownership patterns of household goods. Nearly 49% of all cars are owned by the middle class, compared to just 7% by the rich. Similarly, 53% of all airconditioners are owned by middle class homes. Nearly 46% of all credit cards are to be found in middle class households.
...While only 24% of rural middle class homes own a car, more than 40% do so in urban India. Televisions too are to be found in 90% of all urban middle class homes compared to 62% in rural middle class homes. Though this is an opportunity for marketers, it’s clear that addressing the middle class with a one-size-fits-all mindset is unlikely to work.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at email@example.com