Warc, 13 February 2013
NEW DELHI: A rise in disposable incomes has led to a change
in Indian consumer spending habits, latest GDP figures show.
Data for 2011-12 indicates that the percentage of income
being spent on clothing and footwear declined to 6.4% compared to 7.1% a year
earlier.
Similarly, the share taken by food was down to 29%, whereas
eight years ago it stood at 34%.
By contrast, the proportion of expenditure allocated to
hotels and restaurants increased sharply, by a reported 20.3%.
"In 2011-12, consumers cut back on things that didn't
matter on a daily basis," Rima Gupta, executive director at TNS Consult,
the market research firm, told The Economic Times. "Hence, segments such
as apparel, footwear and other lifestyle products saw growth slowing down."
Madan Sabnavis, chief economist with Care Ratings, suggested
that it was the lower income groups who had cut down on clothing expenditure,
while higher income groups, who have been relatively unaffected by inflation
and economic slowdown, continued to spend heavily on eating out, travel and
communications.
His comments were given weight by a recent study from Credit
Suisse which noted "contrasting perceptions of fortunes across the income
scale".
The same study showed an increase in demand by Indian
consumers for unbranded products during 2012 as they sought to save money. This
was particularly evident in clothing and footwear, with brands such as Bata and
Jockey seeing declining demand.
Elsewhere in the Indian economy, the auto industry is expecting
its worst performance in ten years, as car sales fell in January for the third
month in a row, down 12.5%.
Data sourced from The Economic Times/Business
Standard/Credit Suisse; additional content by Warc staff
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