Evolution of the Home Décor segment
Government of India’s “Housing for all by 2022” scheme is likely to see construction of over 30 million new homes over the next 8 years and will certainly provide a major boost to demand for home textiles, furnishing, home décor and housewares products, which even currently is growing at a healthy 25% annually.
With an annual GDP growth between 6-8% on a population of over one billion people, India will remain one of the fastest growing global markets for all products over the next 15-20 years, including for home products. In terms of purchasing power parity (PPP) based GDP, India is already the world’s 3rd largest economy next only to USA and China. In absolute GDP terms too, the country is likely to be amongst top three global economies by 2030.
Upwardly mobile young Indian consumers below the age of 30 years, who constitute 65% of country’s total population, are showing increased preference for high quality and branded international products for their day to day needs. With their high exposure on internet, frequent travel and highly interactive professional life, they swiftly adapt to international lifestyle trends.
Unique dynamics of the Indian market
- With 1.28 billion people in 2015 representing one-sixth of the world’s population
- GDP growth to remain highest in the world, between 7% to 10% p.a over next 5 years
- Large working population and families with multiple earning members
- Young population – 65% of below 30 years of age
- Increasing spends on lifestyle, décor and home improvement products
- By 2020 average age of an Indian will be 29 yrs; compared to 37 for China
Indian Market Overview
- Indian retail is projected to grow from US$550 billion in 2015 to US$2.1 trillion by 2025,
almost 4-fold increase
- Modern Retail to grow at a CAGR of 22%, from US$40 billion to US$320 billion in next 10 years
- E-commerce likely to grow 26 times, from US$5 billion in 2015 to US$130 billion by 2025
- Indian Home Décor and Houseware markets are growing at a steady 25-30% p.a.
- India’s domestic home textiles and home furnishings market is growing by 40% p.a and
is projected to be in excess of US$13 billion by 2025.
Young Indian consumers now seek home products that are trendy, unique and are appropriate to the occasion and season. There is a growing demand for high quality, stylish and well-coordinated home products and the working young couples of urban India – from metropolitan cities down to the Tier-III towns – take pride in imparting a bit of their own personality to the look of their homes. These young Indians with high disposable incomes are also getting generous with the budget for gift spends.
Prospects extremely bright for Home Products
With a booming services sector, increased IT usage resulting from world-class telecom services, increased travel and information explosion through print, television and online media, Indian consumers now have considerable exposure to global lifestyle ideas and trends – thereby making India one of the most promising new markets for retail expansion.
Home products market growth drivers:
– Increase in disposable income of young consumers
– Proliferation of nuclear families
– Government policy of affordable housing for all by 2022
– Rapid growth of e-commerce & modern retail