Boom or Bomb: India’s Demographics and Market Impact

Strategy Briefing

About This Report

Sep 2016

India is set to overtake China to become the world’s most populous nation in 2025. Strong population growth, combined with rising incomes and urbanisation, makes India a consumer market with immense potential. It is also a competitive production hub thanks to a large, growing and low-cost labour force. However, India also faces important challenges, including the need to develop urban infrastructure, create jobs and provide skills training to its workforce and tackle soaring health problems.

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Boom or Bomb: India’s Demographics and Market Impact

India matters

India is home to nearly a fifth of the global population. It also has the world’s sixth largest consumer market by total expenditure, which is set to expand thanks to a growing middle class with rising incomes. Population dynamics such as increasing working-age population, urbanisation, ageing and soaring health problems are creating many opportunities and challenges in India.

Harnessing India’s demographic dividend

The share of working-age population in India’s total population is growing, thus giving a boost to economic expansion. In order to fully harness this demographic dividend, however, India needs to create enough jobs (including jobs for women) while also providing skills training for the workforce.

Urbanisation

India is urbanising rapidly, although by 2030 nearly 3 in 5 Indians are still expected to live in rural areas. India’s urban transformation is associated with massive challenges in ensuring sufficient urban jobs and infrastructure, but it also brings about investment opportunities and creates vibrant new markets.

Ageing

Despite a young and growing population, ageing is happening in India with implications for social security, labour supply, labour productivity as well as consumption patterns. A growing number of businesses in a wide range of sectors are starting to tap the Indian senior consumer market.

Health issues

India is faced with many health problems that stem from inadequate urban planning, worsening pollution and poor sanitation. Modern-day lifestyle changes including unhealthy nutrition and physical inactivity have also led to rising obesity and diabetes. This fuels consumer spending on health goods and medical services, as well as shaping consumption in food and beverages.

Introduction

Scope
Key findings
India’s population at a glance
India matters

Harnessing India’s Demographic Dividend

Unlike China, India’s working-age population is growing
Women are under-represented in the labour force
Demographic boost to economic growth
Case study: Xiaomi ‘made in India’

Urbanisation

Urban expansion in India
Challenges and opportunities of urbanisation in India
Profile of the urban Indian consumer
Case study: Sharp Corp seeing an opportunity in urban air pollution

Ageing

Elderly population growth is accelerating
Older, sicker and poorer
Businesses are beginning to target the senior consumer segment

Health Matters

Rising health problems
Economic impacts of increasing health risks
Consumers are opting for healthier options

Conclusion

A look into the future
Key challenges and opportunities