When the invite said, “A round table discussion on a new segment of consumers in India referred to as ‘New Affluents’ on behalf of Tata Housing,” it seemed an interesting topic for analysing purchasing patterns in real estate. The aim is to create awareness about this high-end segment, it said. “When something as important as the affordable category is explored and studied and catered for, why not go to the other end of the spectrum and evaluate? The society needs researched and surveyed facts for the market to accommodate and grow,” commented an industry expert.
“The dynamics of this market segment speaks of some kind of advancement from an emerging to a developed economy that has given rise to a new breed of luxury consumers, a highly opinionated and demanding set influenced by global tastes and beliefs. India’s New Affluents, while retaining a distinctly Indian identity, are redefining the market, taking marketers by storm,” the study material explained.
The round-table discussion, though, came up with facts like, “New Affluents represent only 2 per cent of the 240 million-strong Indian household in 2010. Their consumption accounted for an impressive 16 per cent or $158.56 billion of India’s overall consumption of $ 991 billion during the year.”
According to a study by the Boston Consulting Group, in the affluent class are around 13 million households in India. Among affluent households, education and occupation help define consumption patterns and attitudes, creating two distinct segments: New and Traditional. The recent emergence of the affluent class in India highlights this demographic group’s obsession with the love for technology, high living and new-age affluence – in a nutshell, an opulent lifestyle. This has led to conversation amongst manufacturers and marketers on who these ‘Affluents’ are and why their consumption habits are of relevance to India.
Self-made lot
Also, “New Affluents, unlike Traditional Affluents, are self-made and self-sufficient and do not rely on inherited wealth or businesses. They aim to attain a better balance between work, leisure, and consumption, have graduated from college and work as executives, managers, or are self-employed professionals. About 73 per cent of New Affluent households have an outstanding loan and 60 per cent, says the report.
With thoughts compiled by an array of experts representing the fields of research, marketing, real estate and consumer and brand intelligence, the entire effort was to stimulate discussion, debate and bring further insight into the segment. A. Harikesh, Senior Vice-President, Marketing & Sales - Tata Housing; Harish Bijoor, Business Strategy Specialist and CEO of Harish Bijoor Consults Inc.; Bino Paul, Professor & Chairperson, Tata Institute of Social Sciences; and Sandeep Trivedi, Director, Growth Market, Cushman & Wakefield, were the panellists who steered the converation.
According to the panel, India’s New Affluents will not simply mimic western spending patterns but retain distinctly Indian characteristics; a type of jugaad that marries affluence with aspirations, with a strong focus on the former .
New Affluents are known to be opinionated and empowered consumers; they have greater purchasing power than any other economic class; and they shop more frequently and are known to be brand evangelists. They are actually leading a huge change taking place across India with respect to the way people live, work and consume.
By 2020, New Affluents will account for 26 per cent of the country’s total consumption ($3,584 billion). Moreover, this segment will account for 22.8 million or 8 per cent of the total number of Indian households, which is expected to reach 285 million.
Redefining the luxury segment
Speaking at the Tata Housing’s New Affluents Roundtable, A. Harikesh commented, “New Affluents are the ones driving the realty market today. They are ambitious and aspire for good education and successful career. With travel opening up their mind and lifestyle demands, a life they now want is in their own home town as well.”
Marketing and brand strategy specialist Harish Bijoor, said, “In the marketing sector, we have changed the way offerings are assessed, while at the same time delving deep into the buying psychology of affluent consumers. For New Affluents, products should flaunt their value and brand name.”
Transformative
Social researcher Bino Paul, commenting on the societal change, said, “New Affluents are pivotal in transforming urban agglomerations into global cities whose steadfast longing for novelty and structural changes forms a potent base for new ideas, products, markets, spaces and socialisation milieus. They seem to be different from the conventional Indian middle class, in assimilating dynamic contexts that are enmeshed in social-spatial-economic-cultural changes.”
Sandeep Trivedi, Director, Growth Market, Cushman & Wakefield, said, “The growing working population of people in the 27-45 age group is the primary reason for this change. The age of a homebuyer has drastically decreased over the years. Today, the average first home buyer is in the age bracket of 28-32. This trend has transformed the residential market and created a niche within.”
