Is India’s Growing Wallet Fueling A Premium Consumption Boom? Here’s What’s Changing | Economy

According to the report, India’s per capita GDP is projected to reach around 2,700 in 2024.

India is experiencing a significant transformation in consumer spending habits, driven by steadily increasing incomes that are expanding the number of premium-ready buyers. A recent report by SOIC Research highlights this evolving trend, revealing that incomes in the country have grown at an average compound annual growth rate (CAGR) of approximately 7 per cent over the past decade, leading to a fundamental shift in how consumers prioritise their purchases.

According to the report, India’s per capita GDP is projected to reach around $2,700 in 2024, an important milestone economists refer to as the “inflection point.” This is the stage when households begin to divert spending from just essentials to discretionary and premium products. Consumers are increasingly opting for branded detergents, high-end skincare, modern appliances, and lifestyle services, signalling a move up the consumption ladder.

“Incomes growing at approx. 7 per cent CAGR over the past decade is expanding the premium-ready consumer base,” the report stressed, underlining how earnings growth is reshaping consumer behaviour.

Premium Products Gain Traction Across Sectors

This shift towards premiumisation is evident across multiple industries. The automobile sector, for example, has seen a surge in SUV sales, with premium variants outpacing basic models. In the luxury segment, branded jewellery and watches are capturing more market share. Meanwhile, beauty and personal care products in the premium category are growing two to three times faster than their mass-market counterparts.

The travel and hospitality sectors are also benefiting, with consumers increasingly opting for luxury hotels, premium flights, and unique “YOLO” experiences. Additionally, beverages are following a “drink better” trend, and FMCG players report consumers choosing higher-value baskets. Home and lifestyle improvements, such as branded furniture and upgrades, are also part of this premium spending wave.

Technology And Urbanisation Fueling The Shift

The report points out that factors like social media, the rise of modern retail, and the expansion of e-commerce are making premium products accessible to Tier 2 and Tier 3 cities. Simultaneously, urban lifestyles combined with global exposure are elevating consumer expectations, pushing brands to innovate and cater to this growing premium segment.

Reflecting on regional parallels, the report noted that similar patterns have been observed in China and Southeast Asia, where crossing the $2,500 per capita GDP threshold triggered rapid growth in discretionary spending categories such as travel and durable goods.

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