Concept Note

Knowledge Partner
 Background
As one of the world’s fastest growing
large economies, India is expected to
become the world’s third largest
consumer market by 2030, if it
continues to grow at over 7%. Domestic
consumption, which drives nearly 60%
of India’s GDP today, will quadruple to
$6 trillion by 2030. This consumption
will be supported by a young population
with a median age of 31 years, and
hence has significant potential for
sustenance in the long term.

This steep growth of consumption in

India will present one of the largest
business opportunities in the world
over the next decade. As India’s #1
business house with presence across
multiple key consumption sectors, Tata
Group is uniquely positioned to not only
participate in this opportunity, but to
help drive it.

SO, HOW DO WE LEVERAGE

THE INDIA OPPORTUNITY
TO CREATE EXPONENTIAL
VALUE FOR THE GROUP?
 India Opportunity Map
As India undergoes a major transformation, there are 5 aspects of the
India story that can create significant opportunities for businesses that
seek exponential growth.

Growing Mass adoption

Urbanization Affluence of digital

New age Focus on

consumers Resources
& Sustainability
 By 2030, India will have a population of over 1.5 billion, more than
40% of whom will reside in urban areas. This would mean an
increase in urban population by over 120 million in about a
Urbanization decade. To accommodate this massive influx, India’s urban
landscape will see significant growth. According to BCG, India
will need to create over 400 new tier-3 & tier-4 towns, 25 new
tier-1 & tier-2 cities and double the number of metros by 2025.
Infrastructure and mobility will be mega opportunities as cities
transform to house and sustain these large urban populations.
McKinsey sees a 4x gap between demand and supply in rail based
mass transit, and a shortage of 38 million units of affordable
housing in 2025. Urban congestion is another key challenge,
which may create a need for fundamentally reimagining living &
commuting options.
Apart from these mega opportunities, healthcare, apparel,
durables, education, basic services will all need to scale up to
serve the growing urban population beyond today’s cities and
towns.

By 2030, India will add nearly 140 middle income

($8.5k – $40k/year) and 21 upper income (>$40k/year)

Growing households, doubling the share of these segments in the

population to 51%. Middle income and high-income households
Affluence
will spend nearly $4 trillion by 2030, of which $2 trillion will be
on new categories or premiumization of existing categories.

While essential categories like food, housing, transport and

communication, apparel and personal care will see a 2.5x growth
due to increase in income levels, categories such as well-being,
entertainment and household services will see a 3-4x growth.
WEF estimates that about 40-45% of Indian households in India’s
top 40 cities would increase spend for quality, features or
value-added services, rather than on incremental volumes.

Increasing affluence will require opportunities for multiple Tata

Group companies to introduce new categories, premium
products, as well as attract new customers. Air travel,
hospitality, consumer durables, jewellery, financial services,
apparel and entertainment are already a part of the Group
portfolio and will see significant opportunity with growing
affluence.
 India already has 400+ million internet users, with mobile being
the primary point of internet use for the population. By 2030,
India will have 1 billion plus internet users, with 90% of citizens
Mass adoption above 15 years of age having internet on their mobiles.
of digital Digital will become as important to rural, vernacular language
consumers as it is today to urban, English literate customers.

Digital platforms (especially e-commerce portals) have already

moved the points of discovery and sale online for multiple
categories, such as apparel, electronics and durables.
In addition, multiple digital businesses are emerging to plug
natural supply gaps in areas like education and healthcare,
where most new consumers would be in rural areas, while
top-quality service providers would like to live in cities. Digitally
enabled business models, such as ride-hailing cabs, service
aggregators and rental/ subscription services are challenging
established traditional models of companies.

By 2030, 77% of India’s population will be Millennials and

Generation Z, with nearly 90 million leading households. Unlike
New age earlier generations, these customers, even in rural and
consumers low-income segments, will be connected and aware of brands.
Millennial and Gen Z consumers come without the constraints of
earlier generations, who were much more frugal and savings
oriented. As a result, they will be willing to spend more on
aspirational brands and products/services. However, these
consumers will require high degree of personalization in their
products and services and expect well curated experiences.

New age consumers will have a different customer journey than

customers of today, as they would primarily rely on social circles
rather than mass media to help decide on purchases. They would
also be highly networked on social media and will seek personal,
real-time attention from brands. Serving new age consumers
will require significant changes to how companies engage,
deliver and support customers throughout their lifecycle.
 As India becomes the world’s largest population by 2030, there
will be intense pressure on resources and sustainability. By 2030,
Focus on India’s water demand would be twice the available supply,
Resources according to Niti Aayog. India’s energy demand is to more than
& Sustainability double from 709 mtoe in 2015 to 1628 mtoe by 2030 according to
McKinsey. India already has 14 of the 15 most air-polluted cities
are in India, and generates 150,000 tonnes of solid waste every
day, of which less than 30% is treated. The World Bank expects
the daily waste to expand two-and-a-half times by 2025.
Significant investments will need to go into unpolluting land, air
and water and to conserve resources, and the government is
likely to mandate/ enlist the support of corporates to achieve
these goals.

Sustainability is an imperative as well as an opportunity for the

Tata Group.

T0 KEEP IN MIND
while solving the case
What would be the expectations from you? The suggested scope is:

• Prioritized business opportunities for the company (new products/

segments/ markets) aligned to the megatrend chosen by the company

• Extent of scale & profitability that can be driven along shortlisted

opportunities

• Business model options/ ideas for addressing shortlisted opportunities

• Mode of entry (organic/ partnership/ M&A) for shortlisted opportunities

• Key risks & areas for further exploration