India is emerging from a USD 2300 per capita to ~USD 5000 over the next 5 to 10 years. This makes consumption is an evergreen story for a country like India. Does it mean one should invest in consumption stocks whenever a festival is around the corner?

A recent World Economic Forum study says that 80% of India’s population are getting into the middle class by 2030. They are likely to pump in about $5.7 trillion into consumer spending. This means all the extra income that people earn can be channelled to spends that give people pleasure and joy. 

What exactly is the Consumption ‘Sector’?

Consumption is not one ‘uniform’ sector like, for example, Steel. Anything that people with disposable income purchase with their ‘discretionary spend’ can be considered as consumption. This includes consumer durables (white goods like washing machines, refrigerators, etc), cars, footwear, all forms of restaurants, etc. Hence it will be difficult to paint with a broad brush, what is a secular trend and encompasses a wide spectrum of products and services.

Continue reading this on the Jama Wealth Insights blog – Consumption Stocks