Demographic shifts, where consumers live, technology, and growth in rural buying will be some of the key trends that will drive growth of consumption in India, says Radhika Sridharan, partner at Boston-based consulting firm Bain & Co.

Addressing a gathering of top executives from the country’s largest midsize companies and policymakers at the Fortune India Next 500 summit in New Delhi, Sridharan said it was important to ask how technology can improve access, change aspirations and get more out of the consumer.

“What will consumers aspire to in future? How will those aspirations be different from those in the past? And therefore, what does it tell us about how we should change the consumption experience?” Sridharan said.

An important part of the consumption story, according to the Bain consultant will be the growth of the middle class. She said that the Indian middle class has grown while the base has shrunk. The middle-income households will form 80% of the country’s households together with lower-income groups. Sridharan says the economy will move from being led by the bottom of the pyramid to being led by the middle class. She said looking from a consumption perspective, the economy is expected to take a diamond shape in the next 10 years, something like what the Chinese economy looks like. The middle class is expected to spend $40 trillion in the next 11 years, 40% more than what they spend today.

“That’s the great promise of consumption that we have been waiting for so long,” she said. “The upper middle-income group, we expect will punch above their weight. So for about 40% number of households…more than 50% of consumption will be driven by that bucket.”

Sridharan also noted that these are the families that can already aspire to premiumise, to buy better, and change the shape and nature of what they buy.

She also shared highlights of a study conducted by Bain and Co. on what consumers think will be the biggest driver in the change in consumption spend.

Radhika Sridharan

Millennials, middle class, and rural buyers to drive consumption growth