The Indian consumer market is experiencing transformative shifts as it approaches 2025, moving away from the traditional concept of 'sasta, sundar, tikav'—meaning cheap, beautiful, and sustainable—to embrace aspirational, purpose-driven, and authentic consumption.
According to Sanjiv Mehta, who oversees Hindustan Unilever's operations, these changes reflect the nuances of a rapidly developing economy. Mehta explained, "You may buy a Louis Vuitton bag on one hand, but you may still want to go to D-Mart and get a good bargain." This duality highlights the complexity of modern Indian consumers, as they navigate between premium products and value-seeking habits.
The Indian market comprises about 500 million individuals at the lower middle class, who remain highly value-conscious. This demographic reflects broader trends, where the appetite for premium goods is coupled with the desire for cost-effective options. Mehta emphasizes this observation, stating, "The important bit is, at a certain price tier, are you offering the most appropriate value?" Perhaps the most notable trend is the increasing preference for 'premiumization', wherein consumers are increasingly inclined to spend on higher-quality items.
Among the significant trends shaping consumer behavior are experiences over possessions and authenticity. The post-COVID era has seen individuals prioritize experiences, as illustrated by Mehta's reference to the growing inclination toward personal indulgences and spending on beauty products. This inclination is often underscored by the sentiment of 'YOLO'—You Only Live Once—forcing consumers to act on their desires, even if it necessitates borrowing or incurring personal debt.
Social media’s presence intensifies this trend, as consumers express themselves through shared experiences, showcasing everything from the outfits they wear to the food they consume. This culture of sharing enhances the desire for visual authenticity, where consumers gravitate toward natural, less-processed products, tying back to the yearning for organic and ayurvedic items devoid of chemical additives.
Interestingly, the quest for purpose among younger generations is another powerful motivator. People are increasingly inclined to support brands reflecting their ideals and values, rather than mere functionality. “Brands which manifest purpose are much more going to resonate with consumers than brands which are only looking at functional benefits,” Mehta pointed out.
Indian consumers, particularly young ones, are challenging the older notion of frugality with their priority on image and experience. The concept of seeking authenticity and sustainability is prevalent among them, leading to the demand for genuine crafts and stories behind the products they purchase.
One should also not dismiss quick-commerce, which has unexpectedly surged during the pandemic, providing nimble solutions for urban dwellers. This trend highlights the modern consumer's expectation for instant gratification, as evident from Mehta’s comments on the necessity for FMCG firms to reevaluate their supply chains to cater to this demand.
Mehta elaborated on the role of traditional retailers, saying, "The humble grocer will still remain... and will still be a very important trade channel." Emphasizing technology’s growing role, he mentioned platforms like Shikhar being adopted widely among retailers. With over 1.5 million retailers currently utilizing the app, the scene is set for revolutionizing how goods move from distributors to end-users.
Beyond logistics, industry experts suggest the new Indian consumer is more discerning and seeks experiences or products related to social status. They expect brands to align with their lifestyles, preferences, and philosophies. The forthcoming years will see heightened emphasis on both emotional connection and status validation from the products they purchase.
This underlying shift is significant as cultural connotations around consumerism evolve. The attraction toward sustainability and minimalism is clashing with the traditionally flashy consumerism of urban India. Now, the narrative is more about the story behind the product intertwining with purpose and authenticity.
While sprinkling indulgences and aspirational purchases among staple needs, the psychological shifts are reshaping the consumer persona. It reflects trends not just of desire but also of commitment to sustainability and authenticity.
It is clear then, moving toward 2025, Indian consumer behavior will pivot from the conventional norms, embracing change and complexity instead. A future dominantly influenced by informed decisions and experiences awaits, driven by technology and aspirational living.