Consumer Behaviour Analysis on Real Estate and Consumer Durables

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2012

Consumer
Expenditure on Real
Estate and Consumer
Durables
An Analysis

9/30/2012

INDEX
Abstract

2

CONSUMER EXPENDITURE ON REAL ESTATE

3

Backdrop

3

Introduction

5

The many faces of India

7

Shape and Size of Consumption

9

India's real estate sector

14

Real Estate Market

15

Market size

15

Marget segment

15

Investment scenario

20

Key trends

25

The way forward

26

EXPENDITURE ON CONSUMER DURABLES

27

Macroeconomic scenario

27

Consumer durables

31

Challenges

33

1

ABSTRACT
The Indian economy has been growing at a steady rate year-on-year. A variety of factors are contributing to such growth. The report aims to establish the relation amongst the various factors which affect consumer behavior and decision-making while making a purchase in the real estate or the consumer durable sector. We can establish a direct relationship between level of growth in economy in terms of GDP growth rate and consumption expenditure on real estate as well as consumer durable goods. The recent changes in the dynamics of the industry like Changes in Intellectual Property Rights have also contributed to the growth potential of the industry. Consumption Expenditure trend analysis give indication overall increase in durables as a percentage of overall expenditure reason for which include Availability of financing, Growth of organised retail, Appreciation of Rupee, Falling price increased affordability, Increased competition. Urban Area has generally spent higher amount than Rural Area both in absolute amount and as a percentage of total expenditure. Analysis in terms of decile class also give conclusive results. Market is changing in terms of product, pricing, distribution and promotion strategies to make products more appealing, valuable and accessible.

2

CONSUMER EXPENDITURE ON REAL ESTATE
Backdrop
India is a large and growing consumer market, but

◊ Rural Aspirers (Six percent of households):

the expanse and diversity of the country make the
shape of future growth difficult to predict.
Companies can begin to capture this market only
by understanding it.

With income levels, education and occupation similar
to Urban Aspirers, these consumers live in rural India.
They consume less than their urban counterparts and
are comparatively less aspirational.
◊ Large Town Next Billion (Six percent of households):
With incomes between US$ 3,300 and US$ 7,400, these
consumers typically have basic education levels and
have small businesses or low paying jobs. Their income
levels allow them to sustain a basic lifestyle. They live
in towns and cities with a population greater than
500,000.

The Many Faces of India
India has a billion plus consumers spanning all income
segments. The income pyramid is real but does only a
partial job of explaining consumer attitude and behaviour.
This report provides the definitive view of the income
segmentation and more importantly uses other
parameters of location, education and occupation to
define the seven segments of India.

◊ Small Town and Rural Next Billion (Twenty Four
percent of households):
These consumers are similar to the Large Town Next
Billion segment, but live in smaller cities & towns and
in rural India.

◊ Professional Affluent (Two percent of households):
With an annual household income above US$ 18,500,
these consumers are well educated and work as
executives, managers
or are self employed
professionals.

◊ Strugglers (Fifty percent of households):
With an annual income less than US$ 3,300, typically
illiterate with limited education, these consumers have
jobs that are manual labour based with very low
income, generally daily wage.

◊ Traditional Affluent (Four percent of households):
With annual household income levels similar to the
Professional Affluent, these consumers are less
educated and typically self employed. They are...
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