Anirudha Dutta
Senior Research Analyst
Prakhar Sharma
Investment Analyst
Amar Gill
Head of Thematic Research
Mr & Mrs
India
Autumn 2007
Asia’s middle class revealed
Foreword
To understand the consumption trends, priorities
and changing mores of an Indian society in
transition, we surveyed 1,616 households in 16
state capitals equally spread across the country’s
four major regions. While still conservative,
households are increasingly aspiring to a modern
lifestyle and optimism is high.
Anirudha Dutta
Senior Analyst
CLSA India
Read together with our Chain Reactions reports
published this year, we cover a broad cross-section
of consumers in terms of socioeconomic groups.
Given Indians’ historical propensity not to disclose
correct incomes, we use the same methodology as
market researchers. We employ socioeconomic
classification, which takes into account education,
job profile and asset ownership to determine
household categories.
Nearly 67% of the chief respondents hold at least a graduate degree,
29% are shopkeepers or petty traders and 21% are executives. We
believe this adequately reflects the reality that is Indian society where a
large cross-section of the population is engaged in the informal sector.
Our survey results are fascinating to say the least. While the middle class
is yet to completely shed its conservative image, households are
changing rapidly. More than 70% of respondents live in their own homes,
91% have mobile phones, 19% of households own four-wheel vehicles
and 72% own two-wheelers. Penetration of consumer durables and
electronics among the middle class is well above national averages. While
some of the responses in percentage terms, like intention to buy homes,
may appear small, it is to be seen in the context of sheer number of
households in India in the relevant income group.
Children continue to be the main focus of Indian families, and aspirations
in terms of education and career choices are running very high. Rising
prices, children’s education and medical costs are key concerns for Mr &
Mrs India. Some 52% of households believe that governance has
worsened in the past 10 years and say that improving the economy and
reducing corruption are the two key priorities for the government.
What is also important in a country as large and diverse as India, is to
understand trends across regions and cities. To this end, Mr & Mrs India
covers households across 16 cities, while our survey of employees in the
financial services sector as highlighted in our Chain Reactions reports had
respondents from 249 cities.
Our findings here provide interesting insights into the similarities and
differences with other markets we have covered in our Mr & Mrs Asia
series. Mr & Mrs India appear more conservative, have fewer loans and
own less goods. Our Mr & Mrs India report offers unparalleled access to
the homes, minds, hearts and wallets of India’s growing band of middleincome households.
Our partner in this survey
is Mindscape, the Consumer
Insights Division of Technopak
Our Mr & Mrs Asia series
In May 2007, China Reality Research (CRR), our unique research network in China, undertook a comprehensive study of middle-class families across the country,
culminating in Mr & Mrs China. We then repeated the effort with Mr & Mrs Hong Kong. These first reports in our Mr & Mrs Asia series were well received, addressing the
need for granular information that provides a better understanding of the region’s macro data. With Asian consumers set to drive global growth as US consumers pull
back, we strive to understand the mindset and aspirations of households across the region, as well as their evolving spending and saving patterns. We asked: Why is
the savings ratio so high in most Asian countries? What do families save for? How do they save? What is their appetite for equities? What do they spend on?
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 2
Key findings
An average family of 4.3 people lives
typically in a 900sf apartment; 71% own
properties, but only 9% have a mortgage
Half of households have seen their income
rise in the past 12 months, of which onethird saw income rise more than 20%;
19% own cars, 100% of households have
TVs and 91% have mobile phones;
20% have credit cards
63% of respondents expect their income to
increase in the next 12 months
Household savings are low at 13% of
annual income; mainly to meet emergency
needs, healthcare and education costs
Risk aversion is high: 84% have not taken
loans, only 11% have invested in equities
Land and properties account for 51% of
wealth, with 30% in cash and deposits
Slightly more than half say governance has
worsened in the past 10 years; improving
the economy and reducing corruption are
seen as top priorities for the government
Children’s future and education a key
concern and priority; other major concerns
are rising prices and medical costs
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 3
Investment conclusions
Property - Room to grow: Among our
respondents, 12% want to buy property
over the next 18 months; 39% of the new
purchases are upgrades and 30% for
investments; with incomes rising at 12% pa,
positive for property demand. Our key picks
are DLF and Unitech
Retail financial services: As incomes rise,
so does demand for credit seen in 33% Cagr
in consumer credit over FY02-07; propensity
to take loans is increasing, although 84%
have not taken any loans. 22% households
intend to purchase insurance. Our key picks
are HDFC, ICICI Bank and Max India
Telecoms - Ringing in growth:
Penetration at 91% and average ownership
at 1.4 mobile phones has catching up to do
relative to China with 99% penetration and
1.8 phones per household. Bharti Tel
remains our key investment pick
Autos - Mixed message: Of the 21%
households planning to buy vehicles, 58%
intend to buy cars, 34% motorcycles and
3.8% want to buy a scooter. For four-wheel
automobiles, there is a strong preference
for Maruti, while the two-wheeler choice is
Hero Honda. Maruti, Tata Motors and
Mahindra & Mahindra are our top picks
Consumption and retail: A low
penetration of consumer durables indicates
strong growth ahead; most popular brands
are LG, Samsung and Nokia. Sony is
preferred in high-end electronics segment.
Shopping in malls is gaining popularity.
Shoppers Stop is our key pick
Education - Invest in future: With
children’s education a key priority, thematic
investment opportunities in this sector will
yield long-term gains. Educomp is our key
pick in this space
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 4
Snapshot of Mr & Mrs India
Top-three
Top-three wishes
wishes for
for government
government
are
are to
to improve
improve the
the economy
economy and
and
education,
education, and
and reduce
reduce corruption
corruption
Very
Very high
high aspirations
aspirations for
for children
children
with
43%
wanting
their
with 43% wanting their kids
kids to
to get
get aa
master’s
degree
and
29%
a
doctorate
master’s degree and 29% a doctorate
Windfall
Windfall benefits
benefits to
to be
be used
used
for
for property
property purchase
purchase and
and
saving
saving for
for children’s
children’s future
future
Large
Large families
families with
with average
average
size
size of
of 4.3
4.3 people
people
Singapore
Singapore is
is the
the favourite
favourite
destination
for
destination for foreign
foreign travel
travel
Inflation
Inflation is
is the
the major
major
near-term
near-term worry
worry
12%
12% intend
intend to
to buy
buy aa property
property
in
in the
the next
next 12-18
12-18 months;
months;
39%
39% want
want to
to buy
buy to
to move
move to
to aa
better
better house
house and
and 30%
30% want
want to
to
buy
buy for
for investment
investment purposes
purposes
50%
50% of
of households
households have
have
seen
seen an
an average
average rise
rise of
of 12%
12%
in
in their
their income
income in
in the
the
past
past 12
12 months
months
Our
Our respondents
respondents are
are spending
spending
25%
25% of
of their
their household
household
budget
budget on
on groceries
groceries
More
More than
than 12%
12% intend
intend to
to buy
buy aa
car
in
the
next
1-3
years;
Maruti
car in the next 1-3 years; Maruti
remains
remains the
the people’s
people’s choice
choice
35%
35% of
of households
households have
have credit
credit
cards
cards issued
issued by
by ICICI
ICICI Bank
Bank
LG
LG is
is the
the most
most popular
popular brand
brand in
in
consumer
durables;
Sony
consumer durables; Sony takes
takes
that
that position
position in
in digital
digital cameras,
cameras,
MP3
players
and
MP3 players and music
music systems
systems
LG,
LG, Samsung,
Samsung, HP
HP and
and
Compaq
are
the
preferred
Compaq are the preferred
computer
computer brands
brands
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 5
Demographics: Who and where?
India has 203 million households;
with a 30% urban population spread
across 5,000 cities and towns
The population is officially classified
as per socioeconomic (SEC) groups
based on education, employment
and ownership of assets
The above classification addresses the
issue of underdeclaration of income,
which is estimated to be high
SEC A is about 10% of the urban
population, while SEC B is 17% and
SEC C is 21%
SEC classification of urban India
SEC A
10%
SEC E
28%
SEC B
17%
SEC C
21%
SEC D
24%
Median age: India is a young nation
2000
India
2025
31
24
US
The lower end of SEC A and SEC B is
normally defined as being middle class
39
36
China
39
30
Russia
37
UK
38
0
10
20
30
Source: Technopak
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 6
40
44
44
(years)
50
Demographics: Young and fertile
India’s population pyramid in 2000 . . .
India forms a traditional pyramid
80+
Female
Male
70-74
The fertility rate at 2.9 births per
woman is among the region’s highest
60-64
50-54
The population grew at 1.7% in
1990-2005, against 2.1% growth
in the previous two decades
40-44
30-34
20-24
10-14
(%)
0-4
(60)
(40)
(20)
0
20
40
The country’s labour force will
grow at 1.70-1.84% up to 2015
60
Source: United Nations; Hokenson & Company
. . . and expected pyramid in 2025
Growth in India’s labour force
80+
Female
Male
70-74
(% YoY)
2.4
60-64
2.2
50-54
2.0
40-44
1.8
30-34
1.6
20-24
1.4
10-14
1.2
(%)
0-4
(60)
2.6
(40)
(20)
0
Source: United Nations; Hokenson & Company
20
40
60
1.0
81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19
Source: ILO; Hokenson & Company
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 7
Demographics: Low dependency
India’s population classified by education
Graduate Professional
1%
Graduate General
9%
Post graduate - Post graduate General
Professional
2%
0%
Illiterate
19%
Literate, but not
formal
2%
College but not
graduate
4%
School to Std 4
6%
School to Std
5-9
34%
SSC/HSC
23%
Source: Technopak
India’s population classified by occupation
65% of population is below 35 years,
of which half are below 25 years
13 million people enter the workforce
each year in urban India
81% of urban India is literate but
graduates are less than 12% of the
population
Skilled and unskilled workers make up
23% of the population; only 8% hold
white-collar jobs
Unskilled
worker
13%
Not working
36%
Skilled worker
10%
Petty trader
12%
Businessman
1%
Retired
2%
Student
18%
ExecutiveMiddle/ Senior
1%
ExecutiveJunior
7%
Self-employed
professional
0%
Source: Technopak
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 8
Income: Growing affluence
Over 70m households (34% of total)
earn US$2,000-44,000 per annum
0.6m households earn more than
US$44,000 per annum
Distribution of households by annual income
(m)
140
132.25
(%)
No of households
30
Cagr over FY06-10 (RHS)
120
25
20
100
15
80
10
Households earning US$2,000-44,000
to hit 106m by 2010, or an 11% Cagr
Income profile shows a classical
pyramid shaped society
Market researchers believe that
household income is massively
understated - baggage of the era of
controls and usurious taxes
Independent studies suggest 1.6m
households earn over US$100,000 per
annum and about 100,000 people have
more than US$1m in assets
60
53.28
5
40
0
13.18
20
3.21
1.12
11-22
22-44
0
(US$'000) <2
2-4
4-11
0.45
0.10
0.05
(5)
(10)
44-110 110-222 >222
Source: NCAER
India has 100,000 US-dollar millionaires
3,500
3,000
(000)
2,920
2,500
2,000
1,500
795
1,000
485
500
345
248
161
120
119
100
Brazil
Russia
India
0
US
Germany
UK
China
Canada Australia
Source: Capgemini, Merrill Lynch
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 9
Demographics: Across the land
Our survey was conducted across 16
cities, interviewing 1,616 families
30% live in joint families shouldering
responsibilities for senior citizens
We surveyed 1,616 families across 16 cities
Ludhiana
Chandigarh
Average family size is 4.3 and average
number of children per family is 1.05
New Delhi
Lucknow
Jaipur
Guwahati
Patna
This seems low as 38% of households
have no children; within those that
have children, the average is 1.7
Nearly 70% put annual income at
Rs72-240k (US$1,800-6,000); annual
expenditure is Rs134,680 (US$3,370)
Most households have high levels of
ownership of durables such as DVD
players, refrigerators, TVs and mobile
phones although only 19% have a car
Bhopal
Ahmedabad
Kolkata
Bhubaneshwar
Hyderabad
Mumbai
Bangalore
Bangalore
Chennai
Cochin
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 10
Demographics: Chief wage earners
We interviewed the chief wage earner
(CWE); average age is 41.9 years
Over 3% of CWEs are below 25 years
of age and 38% are over 45 years
Age distribution of respondents
45 years and
above
38%
More than 87% of CWEs are married,
12% are unmarried and less than 1%
are divorced
Distribution of respondents by marital status
Not married
12.2%
15-24 years
3%
25-34 years
28%
35-44 years
31%
Family’s chief wage earner
Female
4%
Divorced
0.4%
Married
87.4%
Male
96%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 11
Demographics: Jobs and schooling
Classification of survey respondents
by socioeconomic (SEC) groups
Respondents evenly divided between
SEC A (48%) and SEC B (52%)
Over 66% of respondents are graduates
and post graduates; 23% have 10-12
years of formal high-school education
21% are officers or executives, 12% are
salesmen or engaged in clerical jobs,
19% are businessmen, 28% own shops
Classification of respondents by education
55.7
27.6
12.2
11.9
9.5
9.0
8.6
7.7
7.5
Business: 1-9 employees
Executives Middle/senior
10.7
College undergraduate
Shop owner
Clerical/salesmen
Executive junior
22.9
Graduate/PG Professional
SEC B
52%
Classification of respondents by occupation
Graduate/PG General
SSC/HSC
SEC A
48%
Supervisory level
No response
9.8
Business: No employee
School 5-9 years
0.9
2.0
2.0
1.3
0.9
0.0
Self-employed professional
Business: 10+ employees
School up to 4 years
0.0
Illiterate
0.0
0
Skilled worker
Petty trader
(%)
10
20
30
40
50
60
Unskilled worker
0
(%)
5
10
15
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 12
20
25
30
Who are they?
Very few have made big-ticket
purchases in the past 12 months
But more than 50% plan to do so in the
next 12-18 months
Savings are low at 13% of annual
income; 10% save more than 20%
Our sample is very risk-averse with
84% never having taken out a loan
11% of households have invested in
equities and another 10% intend to;
85% do not plan to invest in equities
Over 81% have life insurance but only
21% have medical insurance
Only 4% have travelled overseas in the
past 12 months, but nearly 10% plan
to do so in the next 12 months
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 13
Homes: Small is beautiful
Family composition
30% are joint-family households
36% of households have five or more
members; average age of members in
the household is 31.4 years
Extended
nuclear
12%
Non nuclear
43%
Nuclear family
58%
Average apartment is just over 900sf
Joint family
30%
High prices in Mumbai and Delhi mean
average sizes are just 551sf and 527sf
Distribution by family size
2,500
1 to 2
10%
(SF)
1,949
2,000
1,500
1,000
1,387
1,321
1,088
970
1,139
864
772
652
565 602
527 551
1,086
620
310
500
5 to 6
27%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 14
Patna
Ludhiana
Lucknow
Jaipur
Guwahati
Cochin
Chandigarh
Bhubneshwar
Bhopal
Ahmedabad
Hyderabad
Bangalore
Kolkota
3 to 4
54%
Chennai
0
Mumbai
11+
1%
Delhi
7 to 8
6%
9 to 10
2%
Average size of house across cities
Homes: High level of ownership
Distribution of type of residence
45% live in owned/family house; 9%
have a mortgage on their home
Own house Others
0.1%
0.5% Own/family
house
Govt alloted
(loan o/s)
1.4%
9.1%
Rented/ leased
27.1%
28% live in rented accommodation
40% own a plot of land; more than
half of these own agricultural land
Own/family
house
(loan repaid)
35.4%
Belongs to
parents/
parents in law
26.5%
84% have not taken any loans; about
2% have taken more than one loan
Type of property owned by respondents
Number of loans taken
70.1
Independent house
3 or more
0%
23.9
Agricultural land
2
2%
16.3
Plot/non-agricultural
Commercial/shop
12.4
Flat/apartment
12.2
Don't own any assets
10.8
Can't say
10.1
0
10
Source: CLSA Asia-Pacific Markets
1
14%
No loan
84%
(%)
20
30
40
50
60
70
80
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 15
Homes: Low intention to buy
Planning to buy a property?
Can't say
6%
Yes
12%
Low intention to buy is
unsurprising given the high
level of ownership (71%) and
rising property prices
No
82%
Reasons for buying a property
Business
0%
Investment
30%
Only 12% plan to buy a property
in the near future; 82% have no
intention of purchasing property
Can't say
2%
Upgrade
39%
39% planning to purchase
property are seeking to upgrade,
29% plan to move up from renting
and 30% want to buy for
investment purposes
Moving from
renting to
owning
29%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 16
Homes: What they desire
Type of property planned to be bought
Independent house
Of those who want to buy, 39% plan to
buy an independent house, 31% plan
to buy flats and 13% plan to buy
agricultural land
39.4
Flat/apartment
30.6
Plot/nonagricultural
26.3
Agricultural land
12.7
Commercial/shop
6.9
0
(%)
10
20
30
40
50
Type of assets planned to be bought by region
80
(%)
68
70
North
West
South
East
60
50
36
40
36
39
42 42
37
36
25
30
17
20
10
39
3
7 7
10
7
3
4
9
5
0
Agricultural land
Plot/ non-agri
land
Flat/apartment
Independent
house
In western India, 36% respondents
intend to buy agricultural land and
68% intend to buy a flat/apartment
Those intending to buy agricultural
land reside predominantly in Mumbai,
where people are buying agricultural
property to get away from the big city
on weekends
Most people in west India want to buy
a flat; given the high real-estate costs,
many middle-income households
cannot afford an independent house
Commercial
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 17
Loans: Future not yet mortgaged
Type of loan taken
Sharp credit growth: 33% consumer-loan
Cagr over FY02-07; but middle-income
households are still debt averse
84.0
Not taken any loan
Personal loan
6.7
Housing loan
6.6
Among our respondents, 7% have housing
loans, a similar number have personal loans
and 3% borrow to buy cars
3.1
Car loan
Other durables loan
1.2
Housing and other
0.8
Housing and vehicle loan
0.7
Education loan
0.6
(%)
0
20
40
60
80
100
13% have taken loans to purchase
consumer durables; 10% have taken
personal loans to meet medical expenses
Purpose of loan
2.9
Land purpose
Of those with personal loans, 26% used
them to buy vehicles, 32% to meet family
expenditure and 21% for their business
3.8
Repairing of house
Personal problem
A significant number of loans also taken to
meet emergency expenses
4.9
Emergency/medical reasons
10.4
12.9
Durables
20.5
Business
Vehicles
25.6
Family functions
27.4
0
5
10
15
20
25
(%)
Propensity for debt rises with income: 15%
in income bracket of <Rs0.2m pa have
taken a loan but this jumps to 22% for
those earning more than Rs0.4m pa
30
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 18
Incomes: Lying to the taxman?
Distribution of respondents by annual income
Rs0.11-0.15m
35%
Rs0.16-0.2m
19%
Up to Rs0.1m
31%
Can't say
2%
Rs0.21-0.4m
11%
Rs0.41-0.8m
2%
Rs0.81-2.5m
0%
Above Rs2.5m
0%
31% earn less than Rs0.1m pa and
96% less than Rs0.4m pa
Our sample selection was based on
SEC classification, a standard practice
of market researchers in India to avoid
the issue of underdeclared income
With 49% being small businessmen,
shop owners or self employed, it is not
surprising they don’t give real incomes
Source: CLSA Asia-Pacific Markets
Distribution by income: CLSA
sample and national average
CLSA sample
(%)
Official stats
(%)
Up to Rs0.1m
30.8
64.9
Rs0.11-0.2m
53.7
26.2
Rs0.21-0.4m
10.5
6.5
Rs0.41-0.8m
2.4
1.6
Rs0.81-2.5m
0.1
0.6
Above Rs2.5m
0.1
0.3
Can't say
2.4
Na
100.0
100.0
Total
Source: NCAER, CLSA Asia-Pacific Markets
Distribution of respondents by occupation
No response
8%
Employed
43%
Business and
self employed
49%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 19
Incomes: Rising at a good clip
Change in income of respondents in last 12-months
Income increased by 12%, as per our
survey; real GDP per capita has grown at
10% over FY02-07
No response
1%
Unchanged
40%
50% of our sample have seen incomes rise
in the past 12 months; 9% have seen their
incomes decline
Increased
50%
Of those with income increases, one-third
saw a >10% rise
Average rise in income was lowest in west
India at 10% and highest in the east at 18%
Decreased
9%
Rate of increase in income (%)
41 to 50
1%
50+
1%
Regional rate of increase in income
20
Can't say
8%
(%)
18
18
31 to 40
0%
16
14
14
12
21 to 30
5%
10
11
12
North
South
10
8
11 to 20
18%
6
0 to 10
67%
4
2
0
West
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 20
India
East
Incomes: Optimistic
Expected rise in income in next 12 months
11 to 20
17%
21 to 30
6%
Other
16%
31 to 40
1%
41 to 50
2%
50+
0%
Cant say
12%
0 to 10
62%
How has life changed in past 10 years?
About the
same
11%
63% expect their incomes to rise
in the next 12 months; average
expected increase is 12.7%
83% of respondents believe that they
are better off than 10 years ago
84% expect further improvement in
their lives over the next five years
Expectations for the next five years?
About the
na
same
2%
11%
na
1%
Worse off
5%
Worse off
2%
Better off
83%
Better off
85%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 21
Key concerns
Biggest worry of survey respondents
Unemployment
10%
Daughter's
marriage
10%
Medical costs
10%
Education fees
18%
Housing price/
rents
7%
Retirement
4%
Can't say/nothing
2%
Repayment of
loans
2%
Other
7%
None
1%
Rising interest
rates
1%
Others
1%
Rising prices
34%
Biggest worries of financial-sector employees
Retirement
20%
Property prices
32%
Child education
14%
Unemployment
13%
Healthcare
21%
Rising price levels is the biggest worry
for 34% of the respondents; education
fees (18%) and medical costs (10%)
are the next two biggest concerns
10% say unemployment is a major
concern; 10% worry about their
getting their daughters married
Housing costs/rent and rising interest
expense are low down in the order of
concerns among those surveyed
20% of financial-sector employees
worry about financing retirement
expenses; only 4% of all survey
respondents worry about retirement
In China, unemployment (27%),
healthcare (27%) and property prices
(26%) are the biggest concerns
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 22
Savings: Below national average
Rate of savings across SEC and regions
18
(%)
Our respondents save 13% of their
income; Mr & Mrs China save 20% of
their income
17.1
17
16
15
14
13.1
This is significantly lower than the
29% national average for households,
partly as our survey does not weight
for higher savings of affluent
13.7
12.6
13
12.7
12.6
12
11
10.1
10
9
8
Overall
SEC A
SEC B
North
West
South
East
What would they do if given 10 million rupees?
If given Rs10m, 49% would buy
property, 44% would save and invest
for children’s future and 32% would
start a business; 10% would donate
some money to charity
48.8
Buy property
44.1
Save for kids' future
32.5
Start own business
10.4
Buy a car
9.8
Donate
5.8
No response
4.5
Holiday abroad
Others
3.1
Settle loans
2.8
Buy durables
2.6
Retire
2.5
0
(%)
10
20
30
40
50
High propensity to save in the south,
consistent with their relatively
conservative image
60
In contrast, 91% of Mr & Mrs China
would “live the good life” if they
received one million yuan
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 23
Savings: Children are key priority
Key reasons for saving
Children are families’ central priority
Emergency requirements
61.5
Children's education
Main reasons for savings: emergency
requirements (62%), children’s
education (55%), healthcare (35%),
children’s marriage (30%) and
property purchase (24%)
55.0
Healthcare
34.9
Children's marriage
30.1
Buying a property
23.6
Retirement
13.5
Buying household durables
11.6
Buying a car
8.5
Hholiday trip
4.3
0
10
(%)
20
30
40
50
60
70
Key reasons for saving by region
90
North
South
(%)
80
West
East
Health and education are key concerns
due to the poor state of public services
and the high cost in the private sector
Retirement savings is low down on the
priority of our sample households
More people save for purchase of
property in the south; healthcare in the
east; children’s education in the west
70
60
50
40
30
20
10
0
Healthcare
Children's
education
Children's
marriage
Emergency
requirements
Buying a
property
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 24
Investments: Property barons?
Distribution of wealth by assets
Cash
21%
Fixed deposits
9%
Mutual fund Equity
2%
Govt sec
2%
Other
16%
Bonds
2%
51% of wealth is in land and property;
21% in cash and 9% in fixed deposits
Shares
1%
Mutual fund Debt
0%
LIC
0%
Pension fund
0%
Land and
property
51%
Surprisingly no one mentioned
jewellery as significant holding
Can't say
12%
Distribution of investment from savings
Cash
24%
3% of total savings (ie, 8% of financial
assets) in equities or mutual funds
Fixed deposits
10%
Govt sec
4%
Stocks & equity
funds
3%
Bonds
2%
Other
17%
Property
44%
LIC
2%
Mutual fund Debt
1%
Others
10%
National distribution of investment from savings
Shares and
debentures
5%
Currency
9%
PF/PPF
11%
Deposits
47%
Insurance
funds
13%
Claims on govt
15%
Source: RBI, CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 25
Investments and insurance: Safe bets
Most profitable investment
Fixed deposits
10%
Govt sec
4%
Cash
22%
For 42% of the respondents, land and
property has been the best investment
Stocks
2%
Bonds
2%
LIC
2%
11% have invested in stocks and
equity mutual funds in the past 12
months and 10% plan to buy stocks or
equity mutual funds
Mutual fund Equity
1%
Other
17%
Land &
property
42%
Others
3%
Can't say
12%
80% of households have purchased
some insurance product, but 78% have
no plans to buy new insurance
Insurance penetration: Life and general
90
In comparison, 48% of families in
China have commercial insurance and
21% plan to buy insurance
(%)
86
85
80
80
80
76
75
75
Insurance penetration is highest in
south India (86%) and lowest in the
east of the country (75%)
70
65
60
South
North
Overall
West
East
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 26
Expenditure: Food and groceries is 25%
Breakdown of consumption basket
Others
25% of expenditure goes towards
food and groceries
10.0
Furnishing
0.6
Vacations
0.7
9% is spent on education and 8% on
entertainment
Jewellery
1.3
Rent & utilities
1.3
Homecare
1.5
Household help
2.2
Cable & internet
2.2
Loan repayment
2.3
Mobile phones, vehicles and property
are the popular high-value purchases
Apparels
2.8
Toys & gifts
3.0
Footwear
3.1
Healthcare
3.2
Communication
Average spent on property and land
was more than Rs500,000
71% have not bought any major item
in the past 12 months
3.7
Personal care
4.2
Stationery
4.3
Fuel & transport
4.3
Mobile phones
7.7
Entertainment
8.3
Education
8.9
Food & groceries
24.5
0
5
10
15
20
25
(%)
30
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 27
Four-wheel autos: 19% penetration
Four-wheeler ownership
2+
0%
2
1%
1
18%
19% of our households have a four-wheel
automobile, significantly higher than the
national average of eight per 1,000 people
Among those who own four-wheel drives, an
overwhelming 65% own Maruti vehicles
21% of households are planning to
purchase a vehicle in the next three years;
64% plan to take out loans to buy vehicles
None
81%
Of the above, 58% plan to purchase cars,
34% motorcycles and 4% scooters
Four-wheelers - Owned and preferred
35
(%)
31
30
Owned
Preferred for next purchase
45% of those who intend to buy cars prefer
Maruti and just over 7% prefer a product
from Tata Motors
25
20
14
15
10
14
11
8
10
9
8
9
7
5
5
2
5
1
6
3
0
Maruti
Alto
Maruti
800
Maruti
Zen
Hyundai
Santro
Tata
Indica
Maruti Mahindra Maruti
Swift
Scorpio Wagon R
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 28
Two-wheelers: 72% penetration
Two-wheeler ownership
72% of households own two-wheelers;
while the average number of twowheelers per family is 1.15
3
2%
2
11%
Other
3%
More than 36% of two-wheelers are
from the Hero Honda stable; Bajaj is a
distant second at 19%
3+
0%
1
86%
No response
1%
Of the 21% of households planning to
purchase a vehicle in the next three
years, 34% plan to buy motorcycles
and only 3.8% want to buy a scooter
Two-wheelers - Owned and preferred
25
20
22
Owned
Preferred for next purchase
18
15
10
45% want to buy a Hero Honda model;
19% would prefer a Bajaj Auto model
(%)
10
11
11
6
5
8
5 5
4 5
4
1
3 4
3
0
Hero
Hero
Honda
Honda
Splendor Passion
Bajaj
Pulsar
TVS
Victor
Bajaj
Discover
Hero
Honda
CBZ
Hero
Bajaj CT
Honda
100
CD Dawn
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 29
TVs: The media revolution
Television ownership
TV penetration is 100%, with 92% of
households owning a colour TV
Only 6% of households have LCD or
plasma TV; lower prices and rising
aspirations will lead to fast growth
LCD/Plasma
6%
CRT/regular
87%
B/W
7%
LG, Sony and Samsung are the most
popular TV brands (similarly for
plasma/LCD TVs)
Of those who plan to buy a TV over the
next 12 months, 48% would prefer a LG;
Sony is a distant second at 15%; homegrown Indian brands are losing out
Televisions - Owned and preferred
60
50
(%)
Currently owned
48
Preferred for next purchase
40
30
22
20
15
7
10
13
10
14
14
6
9
6
1
4
7
3
3
4 3
0
LG
Sony Samsung Onida Videocon Sharp
BPL
Other
Sansui
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 30
Computers: Very low penetration
PCs/laptop ownership
Only 17% of households have
computers, compared to 65% in China
LG is the most popular brand for
personal computers; 37% of owners
have unbranded PCs
1
16%
None
84%
Other
17%
1+
0%
Among those who plan to purchase
computers over the next 12 months,
most prefer LG, Samsung and HP
No response
0%
While 37% of respondents own
unbranded PCs/laptops, only 26%
intend to buy an unbranded model
PCs/laptops - Owned and preferred
45
40
(%)
Owned
37
Preferred for next purchase
35
30
26
25
21
20
19
13
15
9
10
11
13
9
10
2
5
4
4
2
2
1
0
Unbranded
LG
HP
Samsung Compaq
Lenovo
IBM
Zenith
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 31
Mobile phones: Ringing in growth
Mobile phones per household
3
7%
5
1%
4
2%
6+
0%
91% of households have mobile
phones; among these, average
ownership is 1.4 phones
0
9%
China enjoys 99% penetration with
1.8 phones per household
2
24%
Subscriber growth is likely to
remain strong
1
57%
An overwhelming 73% own a Nokia
handset; popular brands, including
LG and Motorola, lag behind
Popular brands of mobile phones
Nokia
73.4
LG
12.7
9.9
Others
Motorola
6.3
Samsung
6.2
Sony
2.9
Panasonic
0.6
BenQ
0.1
Blackberry
0.1
0
(%)
10
20
30
40
50
60
70
80
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 32
Consumer durables: Penetration is still low
Popular brands of washing machines
41% of households have washing
machines; LG, Videocon and Samsung
are the three most popular brands
22
LG
14
Videocon
11
Samsung
Godrej
79% have refrigerators; Godrej and LG
are the preferred brands
8
BPL
5
IFB
5
3
Onida
Others
32
0
5
10
15
20
25
30
(%)
35
Popular brands of refrigerators
Popular brands of VCD/DVD players
28
Godrej
Sony
6
Onida
Samsung
6
Videocon
10
4
4
Sansui
3
2
Others
21
0
13
LG
Videocon
BPL
14
Samsung
12
Voltas
23
Philips
22
LG
Kelvinator
45% have VCR/DVD players; Sony,
Philips and Samsung are the most
popular brands
5
10
15
20
(%)
25
30
2
Panasonic
2
BPL
2
Others
25
0
5
10
15
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 33
20
25
(%)
30
Consumer durables: Penetration is still low
Popular brands of digital cameras
Sony
38
Canon
15
Fewer than 10% of households have vacuum
cleaners, microwave ovens, airconditioners
and digital cameras
13
Kodak
Konica
10% have MP3 players and/or iPods; Sony is
the market leader in digital cameras, MP3
players and music systems
6
Panasonic
5
LG
3
Yashica
2
Nikon
2
Others
16
0
5
10
15
(%)
20
25
30
35
40
Popular brands of MP3 players
Popular brands of music systems
Sony
30
Samsung
Sony
16
LG
9
Panasonic
5
Sansui
8
Samsung
8
8
6
Akai
1
5
Panasonic
Others
23
0
LG
BPL
1
Bose
20
Other
3
DK/CS
33
Philips
15
Philips
In India, foreign brands lead in market
share; in China, the top-three brands in most
categories are local brands
5
10
15
20
25
(%)
30
35
4
Sansui
(%)
2
0
5
10
15
20
25
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 34
30
35
40
Shopping: Call of the mall?
Items bought from malls
Only 30% regularly shop at malls
Most prefer malls due to better choice,
convenience and suitability for the family
5
Home furniture
9
Jewellery
Among those who shop in malls, food &
groceries and clothes & accessories are the
most common items purchased
11
Toys/gifts
16
Books/CDs
19
Home appliances
52
Clothes
67
Food & groceries
0
10
20
30
40
50
60
(%)
70
80
83% of households buy food & groceries
from local neighbourhood stores, Big Bazaar
and Food Bazaar are most popular among
the organised retailers
Preferred stores for purchase of food & groceries
Reason for shopping at malls
Neighbourhood stores
62
Better variety
83.2
Big Bazaar
49
Convenience
46
Spend time with the family
Cheaper goods
23
Recreation
22
Multiple activities
22
0
Source: CLSA Asia-Pacific Markets
10
20
9.3
Foodworld
9.3
Reliance Fresh
30
Spend time with friends
17.9
Subhiksha
7.3
Vishal Megamart
5.1
Spencer's Daily
3.7
Trinethra
(%)
30
40
50
60
70
2.2
Heritage Fresh
0.6
Nilgiris
0.6
0
(%)
20
40
©2007 CLSA Asia-Pacific Markets (“CLSA”)
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Page 35
60
80
100
Online: Still not logged on
Accessed internet in the past 30 days
No response
1%
Only 25% households had used the internet
in the previous 30 days
Yes
25%
75% log on at their place of work
Homes (28%) and cyber cafés (24%) were
the next two popular places to log on
80% log on for work, 53% to check personal
emails, 29% to chat with friends and 13% to
help a child with his or her studies
No
74%
Place for accessing internet
Purpose for accessing internet
Office
74.5
Home
11.3
Jobs search
9.6
Buying
0.2
0
12.7
Downloads
0.9
Personal
29.5
Project and studies
2.8
na
53.2
Chatting
24.0
Friend's place
79.9
Emails
28.1
Cybercafé
Professional work
(%)
10
20
30
40
50
60
70
80
6.6
Banking
0.3
Others
0.5
0
(%)
20
40
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 36
60
80
100
Online banking: Underpenetrated
Use of online banking in the past 12 months
Yes
7%
Only 7% of households have used online
banking facilities in the past 12 months
Online banking is most popular for money
transfers with 54% of respondents using the
service
No
92%
Other uses of online banking are for account
statements (36%) and bill payment (28%)
DK/CS
1%
West India has highest penetration of online
banking (10%) followed by the south (8%)
Regional penetration of online banking
12
Purpose of using online banking
(%)
Transfer amount
10.4
10
54.2
Statements/advices
8.1
Pay bills
8
3.8
4
28.2
21.9
Order cheque books
5.5
6
35.9
Order debit card
9.7
Business
2
0.9
Professional
0.0
(%)
0
West
South
East
North
0
10
20
30
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
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Page 37
40
50
60
Dining out: Gaining an appetite
Frequency of eating out
The average family dines out 9.6 times a year
24.1
Once a month
Average number of people per dining
experience is 3.04; average bill is Rs503
23.7
Once in 2-3 months
18.7
Never
Once a year or less often
34% eat out at least once a month
9.2
8.6
Once in 4-5 months
Most prefer to eat at home with families
7.3
Once a fortnight
But dining out is becoming increasingly
popular - 60% of IT and financial-sector
employees eat out at least once a week
4.6
Twice a year
Once a week or more often
2.6
0
(%)
5
10
15
20
25
30
Frequency of IT and financialservice employees eating out
Average bill for eating out
Don’t know
18.1
More than Rs2,000
120
0.9
100
Rs1,001-2,000
5.9
Rs501-1,000
17.7
Rs251-500
37.0
Up to Rs250
0
5
10
15
20
0-1
1-2
2-4
More than 4
11
11
80
13
14
60
36
33
40
42
IT
Financial
40
20
20.5
(%)
(%)
25
30
35
40
0
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 38
Credit cards: 20% penetration
Distribution by number of credit cards owned
2
4%
3
1%
20% of respondents have credit cards
(compared to 30% in China)
More than 3
2%
Low penetration partly due to high number
of self employed who find it hard to get
cards as often they do not file IT returns
1
13%
Average number of cards owned by those
who have credit cards is 1.58 with a monthly
average credit card bill of Rs10,852
None
80%
35% of respondents having ICICI Bank
credit cards; SBI and Citibank are the next
two popular credit card issuers
Who are the credit-card issuers?
ICICI
Visa has over 54% and MasterCard has 36%
market share among payment gateways
35.1
SBI
22.0
Over 38% of households are unaware of
annual credit-card fees and 40% are
unaware of interest rates charged for
revolving credit
13.5
Citibank
HDFC
8.3
HSBC
8.3
Stan Chart
6.2
ABN Amro
2.3
Amex
1.1
Others
3.0
0
5
(%)
10
15
20
25
30
35
90% of those who do not own a card, do not
intend to apply for one
40
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
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Page 39
Parents: Living in 29% of households
Financial situation of parents
40% have parents who are financially stable
but 22% of parents/parents-in-law have no
pension or fixed income
Don’t know/no
parents
29%
Financially
stable
40%
Have no
income
22%
29% households have parents/parents-inlaw living with them
45% of respondents do not spend anything
on their parents; the average spend on
parents for the other 55% is Rs6,650 pa
Partly selfsustained
9%
Expenditure on parents/senior family members
No spending
45.0
Above Rs50,000
0.4
Rs20,001-50,000
With neither
11%
With children
and senior
citizens
16%
2.0
Rs10,001-20,000
Profile of dependents
5.2
Rs5,001-10,000
9.2
Below Rs5,000
38.2
0
10
20
30
40
(%)
50
With senior
citizens, no
kids
12%
No children/
senior citizen
61%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 40
Children: Education is a priority
Distribution by number of children
3
6%
72% of households have children and
average number of child per household is
1.05; or 1.7 per household with children
5+
1%
4
2%
2
23%
43% want their children to get a Master’s
degree (31% in China) and 29% want their
children to get a PhD (25% in China)
0
38%
94% want their children to be proficient in
English; some interest in French, German
and Spanish
1
30%
Preferred level of education for children
Language that parents would like children to learn
English
42.6
Master's degree
Hindi
28.8
PhD
57.3
Indian languages
13.8
Bachelor's degree
93.5
10.3
French
5.5
MBA/MLA
1.6
None
High school
1.4
German
2.0
MBBS
1.0
Spanish
1.3
Japanese
0.8
Others
0.7
Chinese
0.7
3.1
Others
No response
7.7
0
10
(%)
20
30
40
50
3.4
0
(%)
20
40
60
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 41
80
100
Children: Investing in the future
Annual expenditure on children’s education
No response
19%
Above
Rs100,000
1%
Below Rs5,000
30%
Rs50,001100,000
2%
Rs20,00150,000
12%
Rs10,00120,000
14%
Average spend on child’s education is Rs12,760
pa; the spend in south is highest at Rs17,400
Average spend on additional coaching/tuition is
Rs5,754 pa, with 54% of households spending
some money on extra academic activities
41% of parents want their children to study
abroad (56% in China); 76% of these say it is
for better educational facilities
Rs5,00110,000
22%
Average pocket money is about Rs500 per
month with most spent on food (58%), books
(32%), stationery and toys
Pocket money given to children
up to Rs100
10%
Nil
33%
Reason for educating children in a foreign country
Better educational
facilities
75.8
Rs101 to 250
13%
Better employment
prospects
Rs1,001+
6%
Rs751 to 1,000
11%
Rs251 to 500
23%
Rs501 to 750
4%
43.1
Better quality of
life
20.4
(%)
0
10
20
30
40
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 42
50
60
70
80
Children: Ambitions for the next generation
Preferred choice of profession for children
Engineer
34% would like their children to
become engineers, 27% doctors
and 16% management jobs
34.1
26.8
Doctor
16.0
Management
12.2
Businessman
Professor/teacher
10.1
2.4
Accountant
Actor/artists
1.1
Sports person
1.0
Journalist
0.8
IAS/IPS
0.7
0.3
Lawyer
Others
(%)
0.7
0
5
10
15
20
25
30
35
40
Preferred foreign country where children should work
US
58.9
Canada
13.9
UK
12.8
Australia
10.0
Singapore
7.9
Middle East
4.6
Rest of Europe
4.5
Japan
3.2
Malaysia
3.0
Africa
1.6
New Zealand
1.5
Hong Kong
1.4
China
1.1
Rest of Asia
0.6
0
Government services have lost
their sheen in the new economic
environment in India
41% of parents would like their
children to work abroad
2.4
Other N America
Parental influence is still very
strong in India; while in Hong
Kong, 72% have no preference
for children’s occupation
59% of parents who want their
kids to work abroad prefer the US
(%)
10
20
30
40
50
60
70
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 43
Transport and travel: How and where?
Destination for overseas official travel
Middle East
Members of only 4% of households have
travelled abroad; 60% of the travel was
for work, 40% was for a holiday
28.9
US
16.3
Indian subcontinent
11.6
Malaysia
29% of the overseas trips were to the
Middle East and 16% to US, these two
being the most travelled destinations on
official work
9.1
Hong Kong
8.5
Singapore
7.9
6.1
UK
Australia
3.1
Other N America
3.1
Rest of Europe
2.9
Rest of Asia
2.9
0
5
(%)
10
15
Purpose of foreign travel
20
25
30
35
55% of households use two-wheelers to
go to work, 19% use public transport; in
China 59% use public transport
Mode of transport to office
Public
transport
19%
Personal/
holiday
40%
Private car
9%
Bicycle/walk
8%
Taxi/auto
5%
No response
2%
Business/
official
60%
Other
4%
Company car
1%
Two-wheeler
55%
Company bus
1%
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
be obtained on request from CLSA Publications or CLSA Compliance Group, 18/F, One Pacific Place, 88 Queensway, Hong Kong, telephone (852) 2600 8888.
Page 44
Travel and vacation: All work, no play?
41% of households have not taken a
vacation in the past 12 months
Number of vacations taken
2
17%
30% of households take more than one
family vacation per year
3
4%
4
2%
5
0%
1
30%
Singapore and the US are the most popular
destinations for future holidays; 21% would
like to travel to Singapore; 18% to the US
6+
1%
Other
6%
Can't say
5%
None
41%
67% respondents travel by train for
domestic holidays; 6% use airlines
Preferred destination for overseas travel
Singapore
Can't say
US
Middle East
Indian sub-continent
Canada
Rest of Europe
New Zealand
Malaysia
UK
Thailand
Australia
South America
Mode of travel for domestic holidays
21.0
20.8
67
Railway
17.7
11.1
5
7
Own transport
4.9
3.5
3.2
3.0
1.8
1.7
1.6
0
43
Bus
7.8
6.7
4
Air (FSC)
2
Air (LCCs)
(%)
(%)
10
15
20
25
0
10
20
30
40
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
IMPORTANT: The content of this report is subject to CLSA's Legal and Regulatory Notices as set out at www.clsa.com/disclaimer.html, a hard copy of which may
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Page 45
50
60
70
80
Governance: Holding India back?
How has India’s political condition changed?
52% of respondents believe the
political situation and governance in
India has worsened in the past 10
years; 46% think it has improved
No response
2%
Better off
46%
Respondents believe that the economy,
reducing corruption and improving
education should be top concerns for
the government
Worse off
52%
Only 10% in the south feel the need
for economic improvement as the
south is doing comparatively well,
while 27% in the east place the
economy as top priority
Concerns that the government should address
Improve the economy
20.6
Reduce corruption
16.4
Improve education
15.6
8.7
Employment opportunities
Reduce pollution
6.8
No response
6.6
Control crime
5.9
Control inflation
5.8
Reduce inequality
5.2
3.6
Better public housing
Better healthcare
2.7
Better democracy
(%)
2.0
0
5
10
15
20
Reducing corruption is a concern for
23% of households in the north, at the
seat of political and bureaucratic
power, higher than the national
average of 16%
25
Source: CLSA Asia-Pacific Markets
©2007 CLSA Asia-Pacific Markets (“CLSA”)
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Page 46
Pollution: Not a general priority
Is pollution the biggest concern?
12
Only 7% placed environment as a
top priority for the government
(%)
10
10
8
8
8
7
6
5
6
4
4
2
Within regions, only 4% in the
north rank pollution as a top
priority, while the east is most
concerned at 10%
0
All India
SEC A
SEC B
East
South
West
North
How much would you pay to reduce pollution?
More than
Rs500
1%
Can't say
4%
Rs101-500
13%
Nil
31%
Rs1-100
51%
Source: CLSA Asia-Pacific Markets
65% would pay extra to reduce
pollution, but are only willing to
spend Rs88 on average
65% are unwilling to pay more
taxes to reduce pollution
This is likely partly due to
uncertainty whether government
will produce effective results
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04/07/2007