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Bangalore most affluent market

By Sunil Jain in New Delhi
August 23, 2006 04:09 IST
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If you're wondering why most marketers test their products in the Bangalore market first, even though Delhi at Rs 67,455 crore is nearly double the size, the answer lies in its affluence.

Of all the households in the country with an annual income of more than Rs 3 lakh, Bangalore has the highest share among all 593 districts, and accounts for around 2.7 per cent of such Indian households.

Indeed, in the FMCG and clothing & footwear market, Bangalore is the country's fourth largest market.

Over a third of Bangalore's 17 lakh households earn over Rs 3 lakh a year, a figure significantly higher than Delhi's, or Mumbai's 22 per cent or thereabouts.

This also ensures that the district has the highest number of SEC A households in the country. Of course, individual districts in Delhi such as south-west Delhi have a greater proportion of affluent households, but they have a smaller market.

As a result, 83 per cent of Bangalore's households own a TV set, one of the highest figures in the country.

At 39 per cent, the district (89 per cent of which is urban) has the country's third highest savings rate as well. The city's ownership profile in terms of four or two-wheelers, however, is unremarkable — a fifth of south Delhi households own a four-wheeler as compared to under a tenth in Bangalore.

Also, in terms of density of the market, the region is way down the list, with sales of around Rs 15.5 crore per sq km.

Mumbai Suburban and Thane, which are the country's second and third largest markets (assuming that all of Delhi is one market), are equally affluent, and each account for nearly two per cent of households in the country with an annual income of more than Rs 3 lakh.

A fifth of the households in both the districts fall in this category.

Among the top 10 districts in terms of concentration of affluent households, Ernakulam in Kerala emerges as the second most affluent market in the country, with 32.8 per cent of its households earning more than Rs 3 lakh per annum.

Among the districts that have between 40 and 60 per cent levels of urbanisation (47 per cent of Ernakulam's population is urban), it has the second highest market density, of Rs 5.6 crore per sq km.

Ernakulam also has the country's highest savings rate, of 39.4 per cent. If we compare the savings rate of affluent households (those earning more than Rs 3 lakh per annum), Ernakulam goes as high as 47.6 per cent.

These results, from the latest Indicus Analytics' publication, "Market Skyline of India 2006: District Profile," are based on the National Data Survey on Saving Patterns of Indians (2004-05), National Accounts Statistics (CSO), and Reproductive & Child Health Survey (RCHS) that was conducted in 2003-04, and then projected forward.

The RCHS, like the government's National Sample Survey, covers all 593 districts in the country, with a sample size of around 1,000 households per district.
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Sunil Jain in New Delhi
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