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The great Indian Middle Class

The great Indian middle class is now the focus of attention and for good reasons. Expected to touch 400 m people by FY10E, the middle income household earning be-tween Rs75, 000 and Rs5 lakh a year accounts for 61% of total urban income. While the metros continue to be the largest urban middle-class markets, tier II cites are fast catching up. Increase in the number of middle- and upper-income households has expanded the consumption, creating a strong pull factor to consume certain products and services. Not only FMCG companies (over 70% sales of FMCG products are made to middle class households), but also other consumption driven companies are eyeing this opportunity as this segment is expected to fuel growth in the long run. While Tata Motors launched the cheapest car Nano, Indian hotels have priced their Ginger Hotels below Rs 1,000 to attract these households. The real estate, malls and mobile companies have also lined up strategies to target this segment.

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