A recent report by the consumer insights think tank, The Bharat Lab, has highlighted significant shifts in consumer spending patterns among Indian consumers in tier-2, tier-3, and rural markets.
Drawing insights from the household consumption expenditure survey report for 2022-23, the report underscores a notable trend wherein consumers in these markets are allocating more of their budgets towards consumer durables, education, and consumer services, as opposed to staples.
Over two decades, expenditures on beverages and processed foods have doubled, rising from 4.19 to 9.62 per cent in 2022-23.
Meanwhile, spending on consumer durables has surged by nearly 170 per cent, with consumers in these markets allocating over 70 per cent of their budgets to education and consumer services. Sandeep Goyal, the managing director of Rediffusion and co-chair of The Bharat Lab, emphasizes the importance for businesses to prioritize sub-regionality over regionality, highlighting the significant variance in pockets of affluence and aspiration within sub-regions.
Despite a nearly 80 per cent increase in crude oil prices from 2010 to 2023, fuel and light spending have declined to 6.51 per cent in 2022-23, down by almost 20 per cent, attributable to initiatives like Ujwal Bharat, according to the report.
Furthermore, the report indicates that monthly expenditure in the East and heartland regions is below the national average, signaling price sensitivity and value consciousness among consumers.
However, states such as Goa, Uttarakhand, and Rajasthan, which are popular tourist destinations, exhibit higher monthly expenditures, highlighting the significance of alternative and ancillary industries in nurturing a more empowered consumer class.
Lakshadweep stands out as the only region in India with higher monthly expenditure compared to other regions.
In the eastern parts of Bharat, Bihar leads in monthly expenditure, while Orissa demonstrates the maximum spending disparity between its India and Bharat regions, according to the report.
