300 Million Strong Indian Middle Class
Wednesday, November 1, 2006
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4 comments
So, what are the problems that the Indian middle class faces?
To answer this question, one should ask a prior question : how did the Indian middle class come to be?
India has had a tremendous poverty problem, from which a certain class lifted itself out, primarily using education as the vehicle. They then climbed the steps of being lower middle class, followed by middle class, followed by upper middle class, and many are now rising to affluence.
Throughout, the determining factor has been education.
NIIT understood this phenomenon really well, and built a superb technical education franchise by tuning into the middle class aspirations.
Today, however, the opportunity for fueling more growth via education still remains, at all levels - from K-12, as well as in college and graduate education.
In pursuing this, one should squarely keep in mind the NIIT model, and refrain from trying to sell technology to schools. [I recently had lengthy discussions with Atanu Dey who is researching this topic and harbors desires to do something entrepreneurial.] The Sylvan / Kumon learning center model, for one, would be very successful in India, and tutorial centers are very popular places, helping clear exams such as JEE.
Other obvious areas that the Indian middle class spends wallet share on are Bollywood, Cell Phones, and Consumer Staples. JobSearch and Matrimonial Classifieds are also popular categories, and are being thoroughly addressed by the internet investments of recent times.
It would also pay to dissect the behaviors of specific ethnic segments, and their quirks. For example, the Bengalis tend to be voracious readers and consumers of culture. An online Bengali literary magazine (like Desh) that is supported by a branded TV Channel with cross-marketing of culture and literature could be an interesting opportunity. [Read this article on the Top 10 World Languages; Bengali is spoken by 211 Million people.]
Similarly, Telegus, Tamils, Gujaratis, etc. have their own quirks. Tuning into these quirks will open up other such opportunities. Both Tamil and Telegu have over 60 Million speakers each, while Gujarati has about 45 Million. [I confess, I don't know these quirks as well as I know the quirks of the Bengalis.]
We should continue exploring other ideas from the readers, and in doing so, please feel free to use the Forum.
The exciting thing is, the momentum to quickly move from one class to the next (if possible bypassing a stage), is picking up velocity.
There is a huge opportunity in creating additional cashflow streams for the full spectrum of middleclass. The network marketing mushrooms are just scratching the surface.
A mobile phone as a cash exchange device will reduce a lot of friction and unfurl a lot of creativity.
Quirk of Puneites (a Maharashtrian town - so called culture capital), is to be very sarcastic and bitter…
We have a UGC site about it…
http://www.puneripatya.com
Related to ‘Education’ i have observed that there are not many good books being sold for very small kids (like the kind of books being sold by Ficher Price here in US).Small picture books for kids to teach them bengali or any other language. Infact if you will see there is no major brand that holds ‘children books/toys/clothes etc’ in their portfolio in India.
I think there is an opportunity out there for the same.If the cost of the product is not very high then i think it would sell.
Education is indeed one thing on which the middle class does not hold any limits in spending!
As rightly mentioned, in coaching for JEE, a large amount of students go to coaching spending amount equivalent to around 2-3 semesters of the college fee.
Rightly most middle class families have the “poor dad” (character from the book Rich Dad Poor Dad) who profess - Go to college, work hard and don’t buy what you cant afford!