This is how India consumes

Please find below our latest thoughts on India:

• Last week, a group of leading Indian CEOs met with investors in Singapore to share insights across consumer sectors ranging from financial services and hospitality to automobiles and quick-service restaurants (QSR). The session was oversubscribed, underscoring global interest in India’s consumer market.
• Consumption in India has been in the doldrums this year, disappointing investors who had bet on the world’s largest young consumer base to deliver strong returns.
• Performance has varied but share prices of some consumer-facing businesses – particularly in QSR, travel, and fashion retail – have corrected sharply, falling anywhere from 15% to 50% year-to-date.
• Yet, the discussion revealed a more nuanced picture: the outlook may not be as subdued as headline data and market sentiment suggest.
• The biggest misunderstanding, in our view, lies in shifting consumption patterns.
• Spending is moving away from traditional product categories such as consumer durables (home appliances, vehicles, furniture) and staples (shampoo, detergent, and snacks) towards more experience-led consumption. This includes travel, entertainment, and delivery.
• Across the CEO panel, one message stood out: winning repeat business from increasingly selective customers is the ultimate recipe for success in India – a market where choice is abundant.
• There’s also evidence of a new consumer mindset. Young Indians embrace “living in the now.” They are willing to borrow to enhance their lifestyle, a sharp contrast to their parents’ cautious approaches.
• Digitisation and financial literacy have made credit more accessible, with small-ticket loans emerging as a key enabler of aspirational spending. These loans are modest, often under USD 100.
• These small loans are used to fund holidays, weddings, gym memberships, and electronic gadgets – fuelling the rise of India’s experience economy.
• While growing consumer debt is not necessarily a good thing, bear in mind that India’s household debt-to-GDP ratio remains low by global standards at ~40%, which is mostly tied to mortgages rather than personal loans.¹

• One of the most promising sectors looks to be travel and hospitality. For young Indians, travel is no longer discretionary.
• Domestic travel should continue to dominate, thanks to India’s many rich cultural and religious sites. In fact, 60% of travel in India is religious tourism, a uniquely large segment.
• Wellness travel is a category gaining traction, with Ayurveda – a holistic practice emphasising diet, herbs, yoga, and meditation – appealing to both domestic and global audiences.
• India is also emerging as a global conference hub, with world-class convention centres under development to seat up to 20,000 guests. In 2026, Delhi will host the world’s largest AI summit, featuring leaders like Jensen Huang, Bill Gates, and Sam Altman, among others.
• However, the supply of hotel rooms is simply not enough to match this scale, despite India already having more hotel rooms than Singapore and Dubai combined.
• Consider this: Paris attracts nearly 25 million international visitors annually, while India sees 10 million. That gap is bound to narrow.^2,3
• Despite recent setbacks – border tensions, an airline accident, severe weather, and Middle East instability – the long-term outlook for travel and tourism remains strong, in our view. It is unlikely that one-off events will create lasting damage.
• The food delivery space faces its own set of challenges including hyper-competition, especially in quick delivery, where speed and price dominate.
• The CEO of India’s largest fast-food chain has opened stores in 500 new cities, many unfamiliar even to locals.
• Its most popular product? A ₹49 (USD 0.59) pizza, the cheapest on the market, yet commanding the highest customer loyalty. The main competition isn’t another pizza or fast-food chain – it’s a packet of instant noodles.
• To stay ahead, the company has cut delivery times from 30 to 20 minutes and has shifted to weekly ad updates instead of bi-weekly.
• In summary, this is how India consumes. Businesses that deliver quality products and services at the right price, while adapting to changing consumer preferences, are in a position to thrive.

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