Emerging Consumer Segments in India: A report by RAI & KPMG


Presented by:
Mr. Anand Ramanathan, Associate Director, KPMG

Emerging Consumer Segments in India

“While Indian retail is growing at a healthy pace, some consumer segments clearly ‘stand out’ and are fast gaining traction in Retail” – Anand Ramanathan, KPMG

Classification of Consumers:

  • Time Starved: values time
  • Bottom of Pyramid:  demand pattern changed from “push” to “pull”
  • First time users: trying out modern trade. Driven by aspirations
  • Online consumers: increased value consciousness, small city aspirations and growing importance of convenience
  • Rurban consumers: heterogonous sub-groups, largely underserved
  • Emerging affluent: seek better service and tailored solution

Research Methodology:

  • Primary and secondary data
  • 15 primary interviews across apparel, footwear, food service and real estate

While Indian retail is growing at a healthy pace, some consumer segments clearly ‘stand out’ and are fast gaining traction

A mix of economic factors and changing consumer preferences has led to emergence of some key consumer segments in retail. Tapping them successfully could hold the key to sustainable growth for retailers.

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Key Learnings

  • Successful players use influencers and reduced purchase related risks effectively to engage first-time shoppers
  • Successful business models for Bottom of Pyramid consumers are typically built around low-cost delivery systems coupled with high degree of product customization and scalability
  • Catering to the specific requirements of time-starved consumers requires a different level of service delivery, which only a few retailers have been able to deliver opportunity
  • Successful business models are increasingly relying on technology to access untapped segments of emerging affluent in small cities
  • Successful business models targeting value-conscious consumers maintain balanced revenues with tight costs through front end and back end innovation
  • Delivering on service parameters would go a long way towards striking a chord with the online consumer
  • Leveraging existing ‘traditional’ setups and networks is the key to access Rurban consumers; technology is likely to be an important enabler Leveraging
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Retailers Association of India (RAI) is the unified voice of Indian retailers. RAI is a not for profit organization (registered under section 25 of Companies Act, 1956), works with all the stakeholders for creating the right environment for the growth of the modern retail industry in India. RAI is the body that encourages, develops, facilitates and supports retailers to become modern and adopt best practices that will delight customers. RAI has a three charter aim of Retail Development, Facilitation and Propagation.