20 Indian cities account for 10% of India’s population, but generates 31% of disposable income!
A study by Roopa Purushothaman and Rajesh Shukla (co-authored Goldman Sachs’ famous BRIC report) has conducted a study (on behalf of Kishore Biyani’s Future Capital Research and National Council of Applied Economic Research’s (NCAER))
The authors have identified 20 key cities (which accounted for ~$100-billion of consumption expenditure in 2007-08) and grouped them into three broad buckets –
Megacities :Largest cities in terms of population/market, i.e. Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune
Boomtowns: Next set of big population cities with high expenditure per household, i.e. Surat, Kanpur, Jaipur, Lucknow, Nagpur, Bhopal and Coimbatore
Niche cities: Smaller in terms of overall population, but still hit well above their weight in spending per household, i.e. Faridabad, Amritsar, Ludhiana, Chandigarh and Jalandhar
Few interesting insights from the report:
- More than half of households will be middle class by 2016
- The high-income segment will triple by 2016, quadruple in boomtowns
- Megacity households spend the least on average on education and recreation
- Surplus income rates in the top cities are nearly double the national average
- 19% of households prefer to keep surplus income at home
- Households overwhelmingly draw on savings to cope with shocks
- Niche cities have the highest asset penetration, but lowest financial penetration
- Nagpur leads in insurance penetration
- Coimbatore and Jaipur have the highest credit card penetration
View the report
Ashish Sinha