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    THE

    GREAT INDIANMARKET

    Results from the NCAERMarket Information Survey of Households

    In association with

    BusinessStandard

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    ii

    National Council of Applied Economic Research

    & Business Standard Limited, May 2005

    All rights reserved, no part of this publication may be reproduced, stored in a retrieval system, or

    transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and /or

    otherwise, without the prior written permission of the publisher.

    ISBN 81-88830-08-9

    Price

    Rs. ..

    US$ .

    Published by

    Sunil Sinha, Registrar and Secretary, for and on behalf of the

    National Council of Applied Economic Research,

    Parisila Bhawan, 11, Indraprastha Estate, New Delhi 110 002.

    For details: Contact Dr. R. K. Shukla at rkshukla@ncaer.org

    Printed at

    Ajanta Offset & Packagings Limited, New Delhi

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    iii

    Foreword

    The National Council of Applied Economic Research (NCAER) initiated its series of surveysentitled the Market Information Survey of Households (MISH) in 1985-86. Conducted in

    a broadly comparable and consistent framework, MISH surveys have been conducted annually

    thereafter, with three missed years, with a sample size of around 300,000 households.

    The original purpose of the MISH was, and remains, to gain insight into the ownership and purchase

    patterns of manufactured goods (both durables and consumables) by relating them in a detailed way to

    household characteristics, but with a greater frequency than the consumption surveys of the National Sample

    Survey Organisation (NSSO). An additional feature of the MISH has been the presence of a question on

    perceived household income. The long-time series of frequent MISH surveys, together with the large sample

    size of each, accordingly provide an unmatched source of detailed, validated information on

    consumption patterns, and their underlying household-level drivers.

    The information contained in the MISH surveys has been presented in a number of different

    publications over the years. These included individual product reports as well as longer-term overviews

    in our series of reports entitled "Indian Market Demographics". The present volume serves as a companion

    to our earlier publication, "The Great Indian Middle Class", which provided a detailed breakdown of the

    country's income demographics right up to households with an annual income of over Rs 1 crore

    (Rs. 10 million or $220,000) in the year of the survey, 2000-01.

    Based on patterns of consumption, in that volume we defined middle class households as those that

    earned between Rs 200,000 (2 lakh) and Rs 1 million (10 lakh )($4,444 to $22,200) annually. On this basis

    we estimated that the middle class comprised 10.8 million households in 2001-02, or around 5.7 per centof that year's population. By 2009-10, this was projected to grow to 28.4 million households or 12.8 per

    cent of that year's population. Details were also provided as to how many of the country's rich households

    were to be found in urban and rural areas, and of those in urban areas, how many were to be found in

    small towns and how many in large metros.

    This volume, The Great Indian Market, describes what the Indian consumer is buying and how

    this is projected to change by the end of the decade. It does so by examining the interaction between rising

    household income levels and evolving consumer preferences. The volume provides demand trends for

    20 categories of durable goods and seven consumer goods from actual consumption in 1995-96 to

    projections for 2009-10, and details of who is purchasing these items, by income as well as occupation

    groups, in different cities as well as states.

    In addition, The Great Indian Market introduces various new analyses.

    For example, it includes a consumption matrix that shows the relationship between purchases of

    different consumer durables. How many scooter-owning households have cars/jeeps, and vice versa? Are

    motorcycle-owning families more likely to switch to cars/jeeps in comparison with scooter-owning

    ones? Such questions are at the heart of any marketing campaign, and the product matrix helps arrive

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    at useful answers. Another first is the move toward consumption of services, such as data on the demand

    for life and medical insurance, credit and debit cards and mobile phones.

    The Great Indian Market also attempts to measure the market for second-hand goods, and how

    this differs in the case of different durables, for different income/occupation groups, and between ruraland urban areas. It captures the prices paid for both new as well as second-hand goods by various

    income/occupation groups, and provides yet another important insight into consumer behaviour.

    This book is the second that NCAER has produced in association with Business Standard.

    NCAER's contribution has been the detailed survey and its analysis/interpretation, while Business

    Standard's contribution has been to make our work more accessible to our audience by presenting it in

    well-structured and easy-to-understand chapters.

    The NCAER team was led by Dr Rajesh Shukla and comprised Dr Sanjay Dwivedi, Asha

    Virmani, and Charu Jain. The Business Standard team comprised Sunil Jain, Kanika Datta, and Amit

    Kumar on the editorial side, Sunil Pew and Shagan Mukherjee on the design side, and Priyanka

    Parashar who is responsible for all photographs used in the book. I would like to convey my thanks to

    all of them. I would also like to thank T.C.A. Srinivasa-Raghavan for helping to bring the NCAER and

    Business Standard together, Akila Urankar for her involvement in the marketing campaign and T.N. Ninan,

    Editor, Business Standard, for his interest and personal involvement in this partnership.

    SUMAN K. BERY

    Director General

    NCAER

    iv

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    v

    Contents

    Chapter 1 What Indians buy .........................................................1-11

    Chapter 2 Bharat forges ahead...................................................12-27

    Chapter 3 Key demand centres ...................................................28-34

    Chapter 4 Automotive sector ......................................................35-58

    Cars/jeeps....................................................................38-43

    Motorcycles ................................................................44-48

    Scooters......................................................................49-53

    Mopeds.......................................................................54-58

    Chapter 5 Televisions...................................................................59-81

    Black and white TVs (small) ........................................62-66

    Black and white TVs (regular) .....................................67-71

    Colour TVs (small) .......................................................72-76

    Colour TVs (large) .......................................................77-81

    Chapter 6 VCR/VCPs ....................................................................82-86

    Chapter 7 White goods .............................................................87-106

    Refrigerators ...............................................................91-96

    Air conditioners ........................................................97-101

    Washing machines..................................................102-106

    Chapter 8 Low-cost goods ......................................................107-135

    Pressure cookers .....................................................111-115

    Transistors...............................................................116-120

    Wristwatches ..........................................................121-125

    Electric irons ...........................................................126-130

    Fans ........................................................................131-135

    Chapter 9 Insurance................................................................136-140

    Chapter 10 Consumables ..........................................................141-145

    Chapter 11 Second-hand goods ...............................................146-148

    Survey concepts, definitions and methodology .........................150-153

    Validation of results....................................................................154-155

    Methodology for projections......................................................156-161

    Annexures tables ........................................................................162-284

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    vi

    Table no. Page no.

    Chapter 1 What Indians buy ..........................................................................1

    1 Demand for consumer durables..............................................................2

    2 Ownership patterns of consumer durables .............................................2

    3 Demand for consumables .......................................................................3

    4 Penetration..............................................................................................3

    5 Quantity of consumables per household.................................................4

    6 De