Why global investors still see India as the biggest consumer opportunity

Speaking at the CII Business Summit, Sanjeev Krishan, chairperson of PwC India said India continues to remain one of the most attractive consumer markets for global investors because of the depth of its domestic demand story.

“We are a consumer market. If consumer businesses will not be here, where else will they go?” Krishan said, while pointing to renewed interest from global consumer companies and investment funds in India.

He said several Japanese trading houses, which earlier struggled with pricing and scale in India, are now returning with India-focused consumer investment funds. “Our growth is fired by consumption,” he said.

Krishan identified three major shifts driving investor confidence in India’s consumer economy. The first, he said, is the rise in women’s participation in the workforce, which has increased from 26% to 33%.

According to him, the impact goes well beyond headline GDP growth numbers. More women working translates into higher household spending and changing consumption patterns across sectors.

“When women go out to work, there is a lot more spending which happens because they are at work,” he said. “Women are more discerning spenders in some ways.”

He linked the trend to changes in automotive buying patterns and the growing focus among brands on science-based and health-focused products. Krishan said companies are increasingly tailoring products for more informed and quality-conscious consumers.

The second driver, he said, is the improving governance standards within Indian family-owned businesses, which has made them more attractive to global investors.

Citing Haldiram's, Krishan said the investment deal reflected the scale of opportunity global funds see in India’s consumer market.

“We worked with the Haldiram’s family for almost eight years before they divested a 15% stake,” he said. “For two funds to put in $1.5 billion at a $10 billion valuation in a brand like Haldiram’s, which you find everywhere, is a case in point.”

He added that even well-established Indian brands still have significant room for market penetration and expansion.

The third factor aiding consumption growth is the rise of digital infrastructure and easier access to consumer credit. While smartphone and internet penetration have expanded rapidly, Krishan said the bigger transformation is happening through financial enablement.

“How many credit lines are now opened for consumers in India?” he said, pointing to the rise in personal loans, which he pegged at 17% growth. “A lot of that is going into consumer products.”

Krishan also said buoyant stock markets have helped sustain consumer confidence and spending momentum. “The Indian stock markets have been on a high, and when the Indian stock markets are high, generally we feel good and consumption goes on,” he said.