Consumerism and Rise of Indian Middle Class

Course: Business Government and Society

Saumya Ranjan Dash

Consumerism
Consumerism is a word with two meanings:
A movement to promote the rights and powers of consumers in relation to sellers. A powerful ideology in which the pursuit of material goods beyond subsistence shapes social conduct.
Consumer A person who uses products and services in a commercial economy.

Consumerism as an Ideology
Consumerism describes a society in which people define their identities by acquiring and displaying material goods beyond what they need for subsistence. Long way ahead from the Philosophy of invisible hand: the self-regulating behavior of the marketplace (Adam Smith, The Theory of Moral Sentiments, written in 1759. ) The full emergence of consumerism came as economic changes interacted with cultural and social developments.
Declining influence of religion The industrial revolution

Consumerism in Perspective
Marketing research reveals a widespread, profound effort to find love, status, and individuality in products. Materialism is an emphasis on material objects or money that displaces spiritual, aesthetic, or philosophical values.
Thorstein Veblen, in his book The Theory of the Leisure Class (1899), The Theory of Business Enterprise (1904 challenged the conventional economic wisdom that consumers bought goods for their functional utility.

Glocalization, the Flat World and Consumerism

The term glocalization is a newly coined blend of globalization and localization refers to a concept to describe individual, group, organization, product or service that reflects not only global standard but also local one. A combination of the words "globalization" and "localization.
As one Indian executive told us: "Emerging nations used to aspire to have richworld products. Now they want rich-world quality in their own products. In the end, businesses that practice only glocalization will fail to exploit the full emerging-market opportunityto the detriment of their bottom lines and the economy as a whole. (By Vijay Govindarajan, How U.S. Businesses Can Really Win in India November 16, 2010.

Reverse innovation.

Case To Case Basis? Thinking about the Consumers

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The Global Rise of Consumerism

The ideology of consumerism has risen in Russia, Asia, Latin America, the Middle East, and even Africa.

It may be less a Western than a universal phenomenon, coming with human nature, economic progress, and cultural change interact at a certain moment in a modernizing society.
Once it takes hold, consumerism seems irrepressible, but resistance continues.

Consumerism and a Rise of Consumer Society

Spread of western consumerism. High level of material consumption is are closely linked to identities, aspirations and leisure activities. Growth of Middle Class having surplus disposable income
So who counts as middle class? According to organisations like the United Nations and the Organisation for Economic Co-operation and Development (OECD), it's someone who earns or spends $10 to $100 per day.

The new wave of growth: Emerging markets surge Multi Technology Future The resource economy

http://www.bbc.co.uk/news/business-22956470

Growth of Indian Middle Class

The base of high-spending middle-class consumers is still small.

The middle middle (spending $4 to $10 a day) and the upper middle (spending $10 to $20 a day) together make up just over 50 million people.
This group is essentially part of Indias elite, when contrasted with the rest of the population, yet barely middle class by global standards. Indias total household consumption is expected to multiply four times in just two decades, between 2005 to 2025, according to the McKinsey Global Institute.

By its estimates, the countrys middle class will be 583 million strong by 2025, making India the worlds fifth-largest consumer market.
By more optimistic projections, like one by the World Bank economist Ejaz Ghani, India will have more than a billion middle-class citizens by 2025 that is about two-thirds of its estimated 2025 population.

Material Values Vs. Higher Values

Commoditization of all parts of life. Do happiness is a commodity? Consumerism beyond practical needs for emotional reasons encourage unproductive use of money. Heavy consumerism worsens the environmental degradation. Can consumer culture be disposable? Materialism becomes new national ideology. Division of class in the society: have and have-nots. It promotes having rather than being. Material goods to communicate social rank. Consumerism distorts our values. Vedic philosophy vs. modern day life. Consumerism is a pathology of corporate capitalism.

Consumerism as a Protective Movement

The idea of collective interest in protecting consumers. Consumer protection is today a major function of government. Ethical Consumption Ethical consumerism should be about using our purchasing power to make the world a better place. Feeling pure will not help the world's poor. What is not ethical consumerism, The Hindu, Aug 19, 2004.

Legal Structure: The Consumer Protection Act, 1986 Monopolies and Restrictive Trade Practices Act, 1969 (With subsequent amendments) Food and Drug Administration

Concluding Observations
Consumerism is a word with two meanings: it refers both to a kind of society and to a protective movement.

Consumerism as a way of life is spreading around the world because the conditions that support it are becoming more common.
Consumers are now more protected from injury, fraud, and other abuses than in the past because of stronger government regulation and more consumer-friendly common law doctrines.