TEN TRENDS THAT ARE

ALTERING CONSUMER
BEHAVIOR IN INDIA
By Nimisha Jain, Kanika Sanghi, and Ankur Jain

T risha and Samir, a married couple in

their early 30s, grew up in typical
middle-class Indian households.1 Their
These trends are underscored in a new
survey by Boston Consulting Group’s Cen-
ter for Customer Insight (CCI). Seeking to
circumstances as children were modest, shed light on consumer trends in urban
and their families were extremely cautious parts of India, CCI surveyed people living
with spending: the adults’ biggest dream in the biggest metro areas, as well as in
was to move out of the rentals they were tier 1, tier 2, and tier 3 cities. (See the side-
living in and buy their own homes. Trisha bar “A Survey Designed to Uncover Future
remembers her mother going to mandi (a Consumer Trends.”) The findings have im-
fresh-vegetable market) every other day to plications for a wide variety of B2C com-
get the best produce at the cheapest price. panies that want to succeed in India,
Both families’ major indulgence was the where the level of consumer spending is
occasional getaway to hill stations—high- on track to become the world’s third high-
er-elevation towns with cooler tempera- est within a decade.
tures that are popular vacation spots in
India.
Shining a Light on India’s Urban
But attitudes in India are changing as a Consumers
consequence of rising incomes and of ex- The study revealed both well-known and
posure to new ideas and technologies. For less well-known trends. An example of a
Trisha and Samir—and the tens of mil- well-known trend is information-centered
lions of Indians like them—the interest in shopping, in which consumers search for a
spending on traditional things, such as the great deal of information about a product
purchase of a home, has fallen. Increasing- or service before putting down money; an
ly, people are spending more on experienc- example of a less well-known trend is a
es, customized products, and time-saving preference for renting over buying. (See Ex-
services. hibit 1.)
 A SURVEY DESIGNED TO UNCOVER FUTURE
CONSUMER TRENDS
Two types of research formed the basis ranged in size from Mumbai, with more
of this article. The first was a set of focus than 19 million inhabitants, to Panipat,
groups comprising roughly 200 people. with roughly 300,000. The quantitative
These focus groups were used to test cer- surveys were conducted in person and
tain hypotheses about how consumer had quotas that allowed analysis by
attitudes are changing and to generate a respondents’ age, gender, and income, as
short list of trends to investigate more well as by size of city.
fully.

The second part of the research—which

was undertaken shortly after the focus
groups—was a quantitative survey of
5,000 urban consumers in cities that

Exhibit 1 | Ten Emerging Behaviors of Indian Consumers

Consumers who check at least two data points Information-centered

across all categories before they buy 85% shopping

Consumers whose key reason to buy a product in any

category is to stay up to date with the latest trends 62% Shopping to stay trendy

Consumers who adopt habits, such as eating

Adoption of time-saving
prepackaged food or shopping online, 57% services
that create time for other activities

Consumers who spend on services, food, or A full-on embrace of

gadgets related to health focus 57% health and wellness

Consumers who have chosen to pay extra to Growing interest in

get a customized version of a product 56% customized products

Female consumers who have the final say in The rise of the female
more than half of categories bought 54% decision maker

Consumers who choose to buy Indian brands over A preference for Indian brands
international brands in at least one category 50% over international ones

Consumers who trade down in certain product Valuing experiences

categories in order to spend more on experiences 37% over products

Consumers who said that a recent purchase

was value for money purely because 37% Exclusivity adds value
the product was exclusive

Consumers who have tried renting in at least

one category where owning is the norm 17% Renting over buying

Source: BCG analysis.

Note: The survey was limited to urban consumers; the renting question excluded real estate.

Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 2
 Most surprising, however, is that the ten features. “I need to read the pack before
new trends have quickly taken root in al- buying,” said a 38-year-old housewife from
most all Indian cities and across all demo- Gurugram. This is true even for a simple
graphic segments. The behaviors can be product, such as yogurt, which she noted
found among men and women of all ages, can come in many varieties. “You need to
at every income level, and in every size of know what you’re buying.”
city. (See Exhibit 2.) The ubiquity of the be-
haviors has important implications for Shopping to Stay Trendy. A desire to be in
companies trying to expand their bases of sync with the latest trends is increasingly
business in India. Here’s a closer look at driving purchases among Indian consum-
these trends. ers. More than 60% of respondents said
that in the past year, in at least one catego-
Information-Centered Shopping. People in ry, they had purchased something because
Indian cities now treat information gather- it was trendy and they felt like upgrading—
ing as an integral part of the shopping not necessarily because they needed a
experience. Eighty-five percent of consum- replacement.
ers check at least two data points (beyond
prices and discounts) when they’re buying Not surprisingly, the categories that ranked
something, and roughly 50% do some sort high for trendiness had products that tend-
of online research. Among the sorts of ed to be those that someone might well see
information that people look for are and notice. For instance, in the year lead-
product reviews, manufacturing and ing up to the survey, 58% of people buying
expiration dates, and how a product gadgets such as tablets and laptop comput-
compares with alternatives in terms of ers, and 53% of consumers buying four-

Exhibit 2 | The Behaviors Are Being Adopted by Every Type of Consumer

CONSUMERS EXHIBITING BEHAVIORS: BY AGE, INCOME, CITY TIER, AND GENDER (%)

AGE INCOME1 CITY TIER2 GENDER3

57 58
54 55
50 51 50 51 52 52 50
48 47 47

18-24 35-44 Elite Aspirers Metro Tier 2 Male

25-34 45-59 Affluent Next Tier 1 Tier 3 Female

billion

Source: BCG analysis.

Note: Percentages reflect the average adoption of all ten trends.
1Annual household income: elite = greater than $30,800; affluent = $15,400 to $30,800; aspirers = $7,700 to $15,400; next billion = $2,300 to
$7,700. The income bands reflect a conversion rate of $1 = ₹65.
2City population: metro = greater than 4 million; tier 1 = 1 million to 4 million; tier 2 = 500,000 to 1 million; tier 3 = 100,000 to 500,000.
3The “rise in the female decision maker” trend was omitted for gender analysis.

Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 3
 wheel vehicles, purchased their products tion is less to feel healthy than to look
just to stay up to date with the latest in the healthy. “The biggest motivation is to lose
market. weight and look attractive,” said a 28-year-
old working woman from Jaipur. “My
Adoption of Time-Saving Products and friend recently went on a crash diet right
Services. After signing a lease on a new before her wedding to look slim in pics.”
flat, a young couple in Delhi bought all
their furniture online from Urban Ladder, The pleasure of being perceived favorably
thus avoiding the need to make multiple by others was a subtheme throughout the
shopping excursions in the scorching survey. While it was mentioned more fre-
summer heat. A young family in Bhubane- quently by younger consumers, it was a
shwar contracted out the refurbishment motivation, to one degree or another, for
and painting of their house to an end-to- members of every age group in India.
end provider to avoid the hassle of dealing
with multiple contractors. Growing Interest in Customized Products.
Mass-produced offerings have long domi-
These people are among the 57% of urban nated the Indian market. But in certain
Indians who said that, in the recent past, product categories, there’s also now a belief
they have paid for a product or service that that what one buys should reflect one’s
saves them time. And they do this even if individual preferences and needs—even if
what they’re buying costs more than the one has to pay extra for the difference: 56%
alternative or causes them to underuse an of our survey respondents paid a premium
existing resource. A car-owning business- for customization in at least one category in
man, for instance, said that he commutes the 12 months prior to the survey.
to work in a taxi so he can catch up with
phone calls instead of having to fight with Customizations were most common in the
traffic and then look for a parking space. women’s apparel category: 27% of women
said that they had paid for some sort of
While this trend can be seen everywhere, it customization—such as fabric swatches,
is most prevalent among affluent consum- designs, or colors—beyond fit or basic al-
ers and in metro and tier 1 cities. terations. Men’s apparel, at 24%, wasn’t far
behind. An IT professional told us that he
A Full-On Embrace of Health and Well- decided to buy a custom-made shirt after
ness. Health consciousness has seeped into noticing that his boss often wore such
the national conversation in recent years, shirts. “I love the fact that it is made exclu-
and our survey shows that 57% of consum- sively for me,” the professional said. “The
ers now spend on health and wellness. This fact that it gives me the perfect fit is an
includes 46% of consumers who are spend- added plus.”
ing on services such as health checkups,
gym memberships, and diet consultations, Requests for custom features in two-wheel
and 40% of consumers who are spending and four-wheel vehicles are also common:
on healthier food. more than 20% of people who buy these
products opt for some sort of customiza-
The trend toward health and wellness is tion. The payoff is partly the praise that
also affecting non-health-related industries other people shower on the customizer. A
in some unpredictable ways. For instance, 29-year-old from Jamnagar recalled that he
almost half of respondents said that they had a special music system installed in his
now occasionally walk to a destination in- car by a local vendor. Since then, whenever
stead of taking a cab, and 40% have cut he and his friends are planning a road trip,
down on their media and online use to cre- they always choose his car to travel in.
ate more time for physical activities.
The Rise of the Female Decision Maker. A
Interestingly, for a majority of the Indians few years ago, the gender gap in secondary
who spend on fitness activities, the motiva- education in India, which had been nar-

Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 4
 rowing for decades, disappeared altogether. for three or more different types of experi-
On the heels of this change has come ence last year. Travel was the most com-
another: women now have the final say in mon paid experience, and entertain-
the majority of household purchasing ment—including concerts, plays, and
decisions (54% of the time). movies—was second.

And that final say isn’t limited to catego- Most respondents (53%) said that increased
ries traditionally targeted to women. Fif- household income allows them to pay for
ty-one percent of Indian women make the the experiences they are having. But higher
ultimate decision about their families’ lei- income isn’t the only enabler of experienc-
sure travel plans and 44% have the final es. A surprising proportion of urban Indi-
say about bikes and scooters. Moreover, ans—37%—said that they are financing
women shop differently from men. For ex- their experiences by trading down in cer-
ample, when shopping for gadgets, men tain product categories, including jewelry,
will look for a popular brand that they’ve mobile phones, apparel, and home furnish-
researched online, while women will visit ings. The preference for experience over
multiple stores and take the time to hear products was best expressed by an inter-
what store associates have to say. viewee who said, “Whenever I want to
pamper myself, I buy a massage instead of
A Preference for Indian Brands over clothes.”
International Ones. It’s no accident that in
Indian retail stores, locally produced For many survey participants, part of what
products have prominent shelf positions: they like about experiences is all the posi-
50% of Indian consumers will bypass tive attention it brings them on social me-
international brands in favor of an Indian dia. “If you do something crazy like sky div-
brand in at least one category. ing or scuba diving and don’t update it on
Instagram, it’s not the same feeling,” said a
The trend is strongest in food, including sta- 30-year-old who has his own textile busi-
ples and packaged beverages (where the ness in Jaipur.
preference for Indian brands is 47% and
37%, respectively). Personal and home care Exclusivity Adds Value. The traditional
products are other areas where the trend is notions of best price and of good quality at
visible, with about one-third of respondents a reasonable price continue to hold sway
consciously buying Indian brands instead of among Indian consumers across the
international ones. “I only trust Indian cos- majority of categories. In certain categories,
metic brands,” is the way one 30-year-old however, exclusivity is now seen as enhanc-
Mumbaikar put it. “They use Indian herbs ing a product’s value. For example, 37% of
and Ayurvedic ingredients, which really suit urban Indians value exclusivity with regard
the Indian skin better than the chemicals to eyewear, apparel, and select electronic
used by international brands.” items. Fourteen percent of female consum-
ers said that an item of apparel they had
The preference for Indian brands is ex- purchased provided value for the money
pressed to about the same degree in appar- because it was an exclusive brand that
el, mainly because of the widespread belief increased their social status. One focus
that such brands do a better job of consid- group participant noted the immense
ering Indian consumers’ needs and there- pleasure she takes in people’s responses to
fore deliver superior results. And it is par- her limited-edition Titan Raga watch.
ticularly prevalent among the oldest
consumers we surveyed, who were 45 to 59 Renting over Buying. Presented with a list
years old: 58% of these consumers try to of products that are traditionally pur-
buy Indian brands in at least one category. chased—as varied as kitchen appliances,
clothes, and furniture—17% of our survey
Valuing Experiences over Products. About respondents said that they had rented,
four-fifths (77%) of the respondents paid rather than purchased, one of the items in

Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 5
 the past year, while a quarter said that they Questions to Ask as India
would consider renting in the future. In Evolves
part, this is a function of supply: India has For Indian companies and multinationals
a growing number of high-profile startups alike, the right response to the country’s
that offer rentals in big cities in a variety of budding consumer trends will depend on
categories. the peculiarities of each company’s prod-
uct segments and how they are changing.
But simply having the option to rent is only Standing pat, however, isn’t an option.
part of what’s driving the trend in India. Here are the key questions for B2C compa-
Among lower-income respondents in our nies in India:
survey, the main motivation to rent was af-
fordability. People in the higher-income •• Are you actively monitoring the chang-
segments rent for different reasons. One is es in India’s consumer landscape?
the flexibility that renting enables: young Given the fast pace of change, it is
professionals on temporary assignments, important for companies to devise
for example, prefer to rent their furniture. mechanisms to continuously track these
Another reason is variety. For example, Ra- trends and spot new ones.
hul, a 35-year-old technophile from Banga-
lore, found a website from which he can •• Do you have a clear understanding of
rent a new smartphone every few months. the trends that are most relevant to
“I hate to be stuck with one phone for your category? Each of these trends
years,” he said. impacts different categories differently.
You should understand which trends
What’s more, the urge to switch things up are most relevant for your categories
is not limited to consumers in India’s met- and determine the nature and degree of
ropolitan cities. A 39-year-old woman told their impact.
us that she is waiting for apparel rentals to
become widely available in Jamnagar, the •• Have you thought through the implica-
tier 1 city where she lives. There are nu- tions of the trends for your business?
merous social occasions in “cities like Some of these trends may offer oppor-
ours,” she said, and “people really talk tunities for your business; others may
about what the other person was wearing. pose a serious threat if not proactively
No one likes to repeat their clothes.” thought through and managed. It is
critical to be aware of these differences
and respond accordingly.
The Trends Through a Different
Lens •• Are you actively adjusting to the new
Because the survey questions covered 30 consumer behaviors, or do you assume
categories, it was possible to do a detailed that you’ll be able to catch up at a later
analysis of the trends across product seg- stage? Taking a wait-and-see approach
ments. (See Exhibit 3.) While each of these is a mistake. If you’re not already trying
trends is gaining steam, their current pene- new marketing tactics, you run the risk
tration across categories varies. For in- of obsolescence.
stance, nascent trends, such as the more fa-
vorable views of renting and exclusivity,
occur only in certain categories. By con-
trast, more established trends, such as look- Note
ing to save time and taking a more infor- 1. The names of individuals in this article have been
changed to preserve their privacy.
mation-centric approach to shopping, can
be found in any category of product a con-
sumer in India might be considering.

Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 6
 Exhibit 3 | How the Trends Are Affecting Product Categories

Trendy Health and Role of Experiences Renting

shopping wellness women over products over buying

Info-centered Time-saving Paying for Opting for an Exclusivity

shopping services customization Indian brand

Two-wheelers
Vehicles
Four-wheelers

Kitchen appliances

Large home
Appliances appliances

Entertainment
electronics

Mobile phone
Gadgets
Computers
and tablet

Travel

Outings
Daily entertainment
(movies, eating out)

Staples

Fresh food
Food
Packaged food

Packaged
beverages

Skin

Hair
Daily care
Baby

Home

Women’s
Apparel
Men’s

Handbags and belts

Accessories Eyewear

Makeup

Designer
Luxury
jewelry
Precious

Home furnishings

Media packs
Others and subscription
Medicines and
medical provider

Not relevant/insignificant 0%-14% 15%-29% 30%-44% 45%-59% 60%-75%

Source: BCG analysis.

Note: Percentages reflect the proportion of people who exhibit the behavior in each product category.

Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 7
 About the Authors
Nimisha Jain is a managing director and partner in the New Delhi office of Boston Consulting Group and
the leader of BCG’s Center for Customer Insight in emerging markets. You may contact her by email at
[email protected].

Kanika Sanghi is partner and associate director in the firm’s Mumbai office and the leader of BCG’s
Center for Customer Insight in India. You may contact her by email at [email protected].

Ankur Jain is a project leader and expert in consumer insights in BCG’s New Delhi office. You may con-
tact him by email at [email protected].

Acknowledgments
The authors would like to thank Nivedita Balaji and Prashant Srivash for their contributions to both the
study and the resulting article.

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Boston Consulting Group | Ten Trends That Are Altering Consumer Behavior in India 8