Blog 36: Avoid this misjudgement while estimating consumer market sizes

As a builder of consumer facing SaaS products, one might like to start the Indian market sizing activity with 141 crores/1.4 billion/1,417 million consumers in mind. However, nothing could be further from the truth!

According to ‘Moneycontrol’, Indian consumers are divided into three segments:

• India 1:

  • Small in proportion.

  • However, drives the country’s economy.

  • Comprises 30 million households / 120 million people (8.5% of population).

  • Per capita income of $15,000.

  • Most start-ups cater to this segment; due to discretionary spending ability.

    
    

• India 2:

  • Comprises 70 million households / 300 million people (21% of population).

  • Per capita income of $3,000.

  • An aspirational class with a cautious approach.

  • OTT/media, gaming, edtech, lending start-ups mostly cater to this segment.

  • UPI and AutoPay is facilitating small-ticket expenditures and transactions.

    
    

• India 3:

  • Comprises 205 million households / 1 billion people (~70.5% of population).

  • Per capita income of ~$1,000.

  • Lacks the financial means to afford discretionary goods.

  • Hence, cannot necessarily be a target market for most start-ups.

  • Start-ups/firms building for this segment have a significant opportunity to make an impact and a difference.

While estimating market size, we must keep these characteristics in mind. The Indian consumption class is on a steady growth, however, the number of consumers remain small.

Jump to blog 100 to refer to the overall product management mind map.

Source:

https://www.moneycontrol.com/news/business/announcements/indias-affluent-consumer-segment-drives-economic-growth-and-premiumisation-trends-12419131.html

All the best!