Is India a big market a big lie?

avinandan012

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Is India a big market portrayed in media a big lie??
When you look at
  • IT returns - less than 1% actually pay direct tax
  • Attitude of big electronic brands - inferior products are dumped here
  • Online consumer base(which is what most FDI businesses target now a days)

The population participating in online/offline consumerism are roughly 3% of population of India, roughly 40 million.

So my questions are
  1. How come we see India portrayed as a comparable market to China in media?
  2. Middle class is the people who patriciates' in consumerism, When Indian middle class is shrinking year by year then who will be the consumers these media houses sees?

Link 1
Link 2
Link 3
 
Lol, that first link from which you are quoting the figure of 3% is 6 years old.
What has IT returns got to do with online consumer base ?
With respect to inferior quality being dumped here, I feel it has more to do with quantity over quality. Ours is still a price concsious market but then -
Your post topic and questions are all over the place. Perhaps this can help enlighten you better -
 
The potential. A decade ago, there was hardly any online shopping when Amazon and Flipkart were in infancy. Compared to now, where every few months there is a big shopping festival/sale. Few young people watched youtube to listen to songs or watch trailers, that too on PCs. Now, thanks to Motabhai's Jio, everyone is hooked to videos on social media, including the low income people. As the middle class grows, these numbers will grow. Purchasing power is low, but it is rising steadily.
 
The first link is dated 2017, got anything more recent?

IT AFAIK used to be 5% filing returns a few years back. The govt has said compliance has increased since. So that 1% figure is from when?

I have no idea where this middle class is decreasing year on year line comes from. India's definition of the middle class is wider than other countries and includes a lower middle class.

China's GDP figures are fake. Think of them as a political statement. They present a much bigger GDP than is credible. The IMF says they will grow at 5% this year which is laughable. And the Western MSM firmly repeats that lie because money depends on it.

China is already growing old. India gets there in 2070. I expect India to surpass China's economy by 2035.

India has an internal consumption economy that amounts to 70% of its total economy. That means if the world gets into some recession we only contract by 30%, we can still get by. We are more insulated.

China is struggling to grow its internal consumption which is half that of India. Much more vulnerable to external shocks. China has a host of other problems that are larger than India's. we must support XJP, he is our man in Beijing. He will reverse a lot of progress that the country made in the last few decades. With his hardline Maoist thinking.

India is a potential $10tr market. This is conservative, I expect to grow beyond that because we have a youth dividend. Yes, that is the change these days from the word burden which the last govt liked to use. Deal with it.

Once you cross the $5tr mark the world cannot ignore you. Because there are only two others that are bigger and it is hard for others to catch up. You automatically become an attractive market.

Ask the Koreans. They placed their bets on India in the 90s.
 
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If you buy anything now and pay GST, you already pay taxes. Even that small amount goes to a few thousand per person per year. I doubt there's anything left that hasn't come under GST now. Just take out your calculator and see how much tax you paid in one month on food alone. If you shop in supermarkets or online, you can easily see how much goes into this tax. Half of it goes to the centre and half of it goes to the state.

Do you show that tax paid in your IT returns? No? Does that mean you didn't pay any tax at all?

Maybe it was true years back that most people didn't pay taxes but now it's not true anymore. Anyone claiming that only 1% of Indians pay taxes are purposely deceiving their audience. They are just trying to push the blame of bad governance on people and trying to get more money out of people who don't know any better.
 
A lot depends on the sectors too. And the way one wants to grow. How much growth is debt vs liquidity etc.
In my sector, China is the largest consumer, just behind US. India is just 0.01% of China, so miniscule that operations can stop and no one bats an eyelid. We have been hearing that these numbera will increase, bur I haven't seen that happening in over a decade.
So very sector dependent IMO.
 
IT returns - less than 1% actually pay direct tax
As others have pointed out, I don't see how this is relevant.

Attitude of big electronic brands - inferior products are dumped here
In most cases where I've felt this way, this has been due to a combination of these reasons - Most Indians are not enthusiasts/ well-informed; Practical, Tried, tested & trusted products that simply work and is available for cheapest price is what most of us want. It doesn't matter if this makes products 'inferior' in any other regard.

Anyways, doesn't this go counter to your question? I mean, don't you think such brands are able to do this because India is a big market and stuff gets sold by any means?

Online consumer base(which is what most FDI businesses target now a days)
Such businesses look for the potential for increase in what already exists, so that they gain in returns, and there's been an influx of such investments.


The population participating in online/offline consumerism are roughly 3% of population of India, roughly 40 million.
Besides the source being old, I'd argue it didn't really make sense even for 2017. It uses 2015's study & ranking details (src), without mentioning the year and conveniently cropping it out from the image, and compares how India has done since investments from, I assume, 2015 (it is earliest I see from the link they've provided). That is too soon to judge anything for such investments. You could also go further and question how much sense does the method carried out by the study make. It also includes mixed messages like these -
The good thing is that we witnessed one of the highest growth in ecommerce segment at 27% to reach $3.8 billion, and 21% is the projected growth rate for the next 5 years.
Interestingly, ecommerce is just 10% of USA’s total retail market, wherein in India, ecommerce is just 3% of total retail.
Considering these, the title is obviously clickbait, even for 2017.


How come we see India portrayed as a comparable market to China in media?
Much of this is advertisement. There are political reasons as well, for investors to consider alternatives and India is increasingly becoming a promising one.

Middle class is the people who patriciates' in consumerism
Depending on how you'd define middle class, this is largely true; not entirely.
When Indian middle class is shrinking year by year then who will be the consumers these media houses sees?
I don't know much about this, but from I've read so far, this statement simply seems to be mis/dis-interpretation. There will always be a spectrum of income. How to define each class is questionable on its own. Governments design the slabs considering multiple factors - ideally, even out the curve; optimal for most tax extraction; most appealing to the party's base etc. Whether a given definition of a class grows/shrinks, is all situational. Given the economy is growing, I don't think these factors affect overall consumption. Who gets the most chance to spare for expenses might differ, again for a given definition of class; what sector would benefit most/ gain best returns might differ - none of which really concerns the overall market.
 
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This is exactly I am talking about. My original source may be few years old(2017) thus gives us better perspective. Every one, from Income Tax dept to big FDI hoarder companies all targeting this minuscule consumers.
Regarding growth consumerism comes with disposable incomes, which slowly eroding.

So according to these growth stories we should see more sales of luxury cars.

I read a article on incomes in 2021 from IT Dept (not able to find the link now but this is a closer article) according to them a family whose disposable income( what remains after spending on (food+clothing+housing) is between 12 to 18 lakhs per year are considered middle class.

According to this income distribution middle class is negligible.
 
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So according to these growth stories we should see more sales of luxury cars.

You'll be surprised.



 
You'll be surprised.



Nominal GDP : Indian $3.737 trillion vs China $19.373 trillion
approx -> 1 : 5

Mercedes Benz sales in 2022 at 15,822 units in India and 751,700 units in China.
approx -> 1 : 48
 
This is exactly I am talking about.
Really?
So, does this mean India is a bad market? Far from it! Newer ways to build wealth distribution and value creation will create millions of new consumers. It just won’t be in any way similar to how it worked abroad. India is unapologetically heterogenous.
(Quote from the thread's conclusion) This didn't seem to be what you were talking about. But if so, you're right.
India's heterogeneity would be 'unapologetic' to any attempt to its disregard. Retro-fitting foreign economic methods, in this case consumerism, and expecting people to just adopt to such culture simply won't work.


Again, none of this really matters to this -
Is India a big market portrayed in media a big lie??
question. As consumerism is not the only thing that determines the market or drives an economy and this -
none of which really concerns the overall market


gives us better perspective
Care to share?


according to them a family whose disposable income( what remains after spending on (food+clothing+housing) is between 12 to 18 lakhs per year are considered middle class
By "them" if you meant the link you've provided, no. According to them -
In conclusion, the terms middle income and middle class are often used interchangeably, but they actually refer to two different things. In India, the middle-income group is defined as households with an annual income between INR 7.5 lakh and INR 15 lakh, while the middle class is defined as households with an annual income between INR 6 lakh and INR 18 lakh. While the middle-income group is growing and becoming more prosperous, there is still a significant gap between the middle-income group and the middle class. As India continues to develop, bridging this gap will be crucial for the country's economic growth and development.
 
Nominal GDP : Indian $3.737 trillion vs China $19.373 trillion
approx -> 1 : 5
Hah, China's GDP is at most $12tr and not seeing much growth for at least another five years

Forget their fake GDP figures. This is a scam they have been running for decades now.
Mercedes Benz sales in 2022 at 15,822 units in India and 751,700 units in China.
approx -> 1 : 48
In the US 4% of premium cars are owned, rest are leased. Because half the value of the car is lost the moment you drive it out of the showroom. Do lease facilities exist in India?

some time ago both India and China were buying 20% of their oil from Russia.

We bought a million barrels, they bought 2 million. Shouldn't China have been much higher?
Every one, from Income Tax dept to big FDI hoarder companies all targeting this minuscule consumers.
200 million consumers and rising is minuscule according to you?

Remember this is the fastest growing economy in the world right now and is going to continue that way.
 
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@avinandan012 You're not first person to doubt this claim.




However the government is not in the mood research reality: https://indianexpress.com/article/opinion/editorials/consumer-expenditure-survey-2022-7989599/

I think the middle class that was promised since the liberalisation in the 1991 was never really realised on the scale and potential that was marketed.
And we barely question it since most of us live in cities and are surrounded by people whose lifestyles are more or less similar to us. However, the reality is clear to many international companies which is why most of them don't operate here.
 
Tokyo constitutes 20% of the GDP of Japan and has 11% of its population with its area ever expanding to include neighbouring regions. This is the template any developed country has, with consumerism and purchasing power centered around big cities.

India will never be a market of billion. People will keep immigrating to big cities which will in turn keep expanding outwards and the affluence and discretionary spending will accordingly radiate from the centre to the outskirts of these city areas.

For this, India is riding on its demographics and hoping to be on the path that China was 2-3 decades ago. Most will not have fulfilling jobs but will probably be earning more than they would if they were not in the bigger cities and as a result have some discretionary income. At the end of the day, that is what the market is aiming at.
 
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