NEW DEHLI: A wide range of product categories are set to enjoy substantial growth in India over the next four years, as a number of "fundamental shifts" influence popular spending habits.

Technopak, the consultancy, has identified a variety of trends that will exert a major impact on manufacturers, retailers, marketers and brand owners in the country.

Firstly, India's prolonged economic expansion has pushed the typical annual household income up to almost $4,000 (€3,318; £2,738), rising to $12,000 when purchasing power parity is applied.

Looking forward, this figure is expected to more than double in the coming decade, a development that is likely to fuel a "sustained boom in consumer spending".

Equally, the fact that 60 cities will house a population of at least one million citizens by 2011 – a total that should climb to 100 cities by 2021 – will broaden the scale of India's "consuming class."

According to Technopak, overall domestic retail sales will reach a value of $435m over the course of 2010 as a whole.

The food and grocery sector will be worth $260bn in 2009 and $325bn in 2014, with the telecoms market seeing revenues leap from $32bn to $43bn in this timeframe.

Demand for jewellery and watches will increase from $25bn to $41bn in the same period, with the consumer durables and IT segment also up from $11bn to $17bn.

Elsewhere, personal care will post an improvement from $10bn to $14bn in the next four years, while out-of-home dining will record a jump from $5bn to $7bn.

Technopak summarised two key areas that marketers will need to take account of in order to ensure they can successfully connect with the 550 million "core" shoppers in India going forward.

The first takes the form of "need-based" purchases like food, clothing and mobile handsets, where factors like price and convenience are assuming greater importance, reducing the role of brands.

"While behemoths such as P&G, Unilever, Nestle and a few others have still managed to hold their ground and even expand, countless other brands and producers have disappeared," Technopak said.

As a result of this "shift to thrift" among many customers, balancing price, brand and quality will thus be essential.

In-store marketing will also play a more prominent role in the future as organised retail networks further enhance their position.

However, even though sales through chains like Star Bazaar, Pantaloon and Bharti Retail will stand at some $100bn by 2014, the revenues generated through other channels will come in at $600bn.

The second set of preferences outlined by Technopak were "aspiration-based" purchases, where brands are more important.

This area that can cover everything from handbags and jewellery to personal grooming, but products are competing not only with alternatives in their own segment but also with entire other categories.

"Though income levels have been growing in the country, they have not kept pace with aspirations and desires,” Technopak said.

"A young consumer with limited pocket money is being equally targeted by Airtel, Vodafone, Coke, Pepsi, etc."

"This category collide has to be dispassionately understood, and business strategies reoriented."

Data sourced from Technopak; additional content by Warc staff