What the frenzy for Coldplay, Diljit-like concerts tells us about Indian consumption

“Tickets sold out within minutes!”, “New iPhone launch overwhelms showrooms across India”, “Customers seen waiting for hours outside this global clothing brand ahead of inauguration.”

If these headlines resonate with your experiences, you are now a part of India’s ever-evolving consumption trend. 

Young India, the millennials and the Gen Zs, mostly aspire differently amid the current pace of digital penetration, social media exposure and high income, portraying a change in how they are moving beyond necessities and spending more on discretionary products. Key sectors such as travel, media, FMCG, and consumer durables have led this growth. A Deloitte report observes that this trend will likely get further amplified, driving overall private consumer expenditure growth.

A Trend or a FoMo Factor?

The recent craze over procuring Coldplay concert tickets shows how Indians are changing from the “Roti Kapda Makaan” paradigm to a “Zindagi Na Milegi Dobaara” phenomenon.

As history just saw, tickets went on sale for a day and — in every fan’s biggest fear– were sold out within minutes. But, the FoMo factor and spending ability did not wary most consumers from shelling out a massive chunk of their savings to get these tickets in the ‘black market’ at 4x-5x the original price.

And this is not the only one-off event. Interest in concerts by Dua Lipa, Diljit Dosanjh, Lollapalooza, and Sunburn has risen for the past few years as India opens its gates to many international artists on a vast scale. Astonishingly, home-grown global sensation Diljit’s ‘Dil-Luminati’ tour has sold over 2,50,000 tickets, making it the highest-grossing concert tour ever in India, even with tickets selling as high as Rs 25,000 for one!

Now, the question arises: Where does such a will and means of spending exorbitantly on experiences come from in a country with a low per capita income compared to developed countries? Let’s break it down.

The New Money Phenomenon

The above-portrayed spending power among a particular section of society needs attention. Enter, the new money generation. 

New money holders are those sections of society that have acquired wealth within their generation rather than inheriting it. Their personal consumption preferences are significantly different from the traditional needs of older generations, with impulse consumption at the core of their needs.

Simply put, there is a growing trend among Indians with high disposable income to behave like those in the Western economy with an appetite for premium products such as high-end phones, branded clothing, OTT subscriptions, gaming, ed-tech, and more. It means that many of us with high-income, English-speaking skills emulate how the West spends — typically on cultural experiences, gaining more spending power with credit cards, travelling to different countries, etc.

They buy the latest iPhones, book flights rather than trains to travel domestically, and use quick commerce for things as small as a pin to premium electronics apart from groceries.

As we speak, iPhone 16 sales in India have already witnessed up to 15-20% surge in sales on the inaugural day compared with iPhone 15, as per Counterpoint Research‘s initial data hinting at the growing spending attitude of Indians with every passing year.

How India Spends

India is primarily a consumer demand-driven economy, with private consumption accounting for above 60% of GDP. That said, there is a constant shift in Indian consumer behaviour towards premium and digital experiences as incomes rise and technology expands access, leading to the trend we call ‘premiumisation of consumption.’

Similar to the surge in demand witnessed in China during the early 1980s, India is currently experiencing a notable uptick in the desire for luxury goods. A Goldman Sachs 2024 report on ‘India’s affluent population’ highlights the rapid growth in the wealth of affluent Indians and that this will increase from around 60 million in 2023 to 100 million people by 2027, or even more.  

Let’s take a look at what sectors can drive this growth.

Travel on your mind?

Travel has seen significant growth. As the world’s third-largest domestic aviation market, India’s air travel sector grew 15% YoY in FY24, with total air passengers reaching 37.6 crore. Meanwhile, Indian Railways saw a 5.2% YoY rise in travel in the same fiscal. 

Additionally, to boost air travel further, the country has doubled its domestic fleet in the past decade to 157 in 2024 and aims to increase this number to 350-400 by 2047.

Internationally, too, more Indians are travelling in 2024 than at any time in history. A report by the Mastercard Economics Institute (MEI) says that this practice will continue with nearly 20 million more people entering the middle class over the next five years.

Entertainment, Entertainment, Entertainment

Media and entertainment have significantly risen, with average spending growing by 29.30% in FY24. A recent report by CMS titled Unfolding India’s Consumption Story echoes the same, mentioning that in the last two years (FY22-FY24), the average spending in the media and entertainment sector surged nearly 100%.

It also notes that consumers are willing to pay for differentiated content that resonates with them, thus increasing the rise of subscription models in the country. Here’s a projection: 

Watch out (for the watches)!

Imports of luxury watches from Switzerland have surged by 45% over the past 2-3 years. India is seen as the “next big growth market” for the Swiss watch industry. By 2028, Deloitte predicts that export sales of Swiss watches in India will reach over 400 million Swiss francs and will be in the top 10 Swiss export markets within a decade, depicting a shift towards brand consciousness and aspirational buying.

Boom in Electronics

The latest smartphones, large TVs, washing machines, and ACs exemplify how the affluent Indian class is splurging to upgrade their standard of living.

Counterpoint Research notes that 5G smartphone shipments captured their highest-ever share of 71% in volume from January to May 2024. Among these, the premium segment, smartphones above Rs 30,000, reached 20% volume share, the highest ever. Also, the offline share reached 64%, marking the highest quarterly post-COVID figure.

Source: Counterpoint Research 2024

In the ultra-premium segment, smartphones above Rs 45,000 showed a 51% growth, with Apple leading the segment with a 71% share.

Similarly, the researcher said the share of 50-inch plus televisions went up from 21% to 24% in total TV sales in India in the same period, with a similar trend in the coming months. 

Moreover, owing to climate change and increasingly hot summers, the room air-conditioners (RAC) market in India is likely to grow at a CAGR of 12% to reach Rs 50,000 crore by FY 2028-29, Tata group firm Voltas had mentioned in its annual report.

FMCG Sector

The FMCG sector saw a robust recovery, with average spending increasing by 16.76% in FY24. Consumption inequality declined over the last decade, with the share of the top 10% households in consumption falling 1.9% in rural areas and 4% in urban areas, as per results of the latest Household Consumption Expenditure Survey (HCES). 

According to the government’s survey of 2022-2023 on trend in India’s consumption spending in urban societies, the divide between rural and urban has declined over the last decade, with the share of the top 10% households in consumption falling 1.9% in rural areas and 4% in urban areas. 

In Conclusion

Looking at the trends, these sectors are poised to grow more. If you are keen on investing in these sectors, you can check out smallcases built around the power of big brands and/or around increasing change in consumption trends.

The new money holders are trying to spend like Western societies and get returns on their investments, so they need to learn how to invest in the long run. Why? Because they have grander ambitions and more premium choices in terms of experiences, travel, and investments in real estate, to name a few. Such a stratum of society needs help investing and preserving their wealth in the long run. 

While impulse and discretionary purchases are growing by the day, and their impact is seen in the rising trend of F&Os and risky bets on the stock market, long-term investing will silently create wealth, compound returns, mitigate market volatility risks and provide tax-efficient gains in the background.