India's Hidden Growth Potential

An economic downturn may have triggered a slowdown in many booming, developing economies. According to World Bank, India faced one of the highest growth rates in 2007 at 9.8% before falling to 8.2% in 2009. Hit by the economic spiral, India is currently growing at a rate of 5.3%. Certain key markets within India are growing rapidly. These hidden markets provide immense growth potential for companies. Rural Market: The rural market is a critical component of India's growth. Neilsen proposes that 72.2% of India's population lives in some 638,000 rural villages, and rural India contributes to 56% of India's income and 64% of India's expenditures. In 15 years, Neilsen predicts, the Indian rural market, which is growing at 25%, will be four times larger than the Indian urban market, which faces a 10% growth rate. The increasing purchasing power coupled with sheer population size makes the rural market a great investment zone and the apple of many companies' eye. Kid's market: India currently stands as the second most populated country in the world with roughly 1.2 billion people. In 2025, India is projected to pass China in population. With nearly one seventh of the world population and increasing life expectancy, India is of obviously on the mind of many growth companies. According to the CIA World Factbook, ages 0 – 14 make up nearly 30% of the Indian population, 65% by ages 15 – 64, and 5% by those over age 65. Ages 0 – 25 make up nearly half of the country's population. Surprisingly, India's 30% of the population, ages 0 – 14, make up more than the entire population of the United States. That is, there are more children in India, than people in the United States! This provides unparalleled opportunities for companies wishing to target the 0 – 14 age demographic. Companies like Walt Disney and Time Warner have already taken charge to enter the Indian market. They have made a splash and continue to grow their presence with many kids' channels and countless shows, including India's version of Sesame Street, entitled Galli Galli Sim Sim. Consumer goods market: Consumer goods company have long had their eyes set on India. Multinational giants like Unilever, Proctor and Gamble, Colgate-Palmolive, and Nestle have all aggressively entered India and created a sustained brand name. According to Nielsen, the Indian consumer goods sector has a market size of $13.1 billion USD. In 2015, the sector is projected to grow to $33.4 billion USD. This massive growth rate can be contributed to the growth of branded businesses as opposed to commodities, increasing middle class and rural markets, and organized retail stores. Nielsen approximates that the organized retail will reach $260 billion USD by 2020, up nearly 800% from that of 2011.