Thursday, April 20, 2017
India to be third largest consumer market by 2025; Over 200,000 England homes lie vacant; Flying car to go on sale
1 India to be third largest consumer market by 2025 (Issac John in Khaleej Times) Rising affluence will enable India to emerge as the third-largest consumer market by 2025, prompting companies to adapt their business models for meeting the changing customer needs, according to a report by the Boston Consulting Group.
Consumption in India is set to triple to $4 trillion by 2025 on the back of changes in consumer behaviours and spending patterns that have big implications for companies, said the report. According to it, a nominal year-on-year expenditure growth of 12 per cent in the country is more than double the anticipated global rate of five per cent and will make the country the third-largest consumer market by 2025 at $4 trillion.
Emerging cities - those with populations of less than one million - will be the fastest growing and will constitute one-third of total consumer spending by 2025. The report said that three-fourths of all households will be nuclear families and digital channels will influence 30 to 35 per cent of all retail sales by 2025 and eight to 10 per cent of retail spending will be online.
In a country, which is already the third largest economy in terms of purchasing power, the shape of this growth will be influenced by the elite and affluent income segments that will constitute 40 per cent of all spending by 2025. For the first time, the wealthy will represent the largest consumption segment.
Among the factors that will shape consumption is India's unique pattern of urbanisation, in which emerging cities are the fastest growing. About 40 per cent of India's population will be living in urban areas by 2025, and city dwellers will account for more than 60 per cent of consumption.
Another important trend is shifting family structures. The extended Indian joint family has given way to nuclear households, (a couple or a single person with or without children). The proportion of nuclear households, which has been on the rise during the past two decades, has reached 70 per cent and is projected to increase to 74 per cent by 2025. Nuclear families spend 20 to 30 per cent more per capita than joint families.
The biggest desires of aspirer households used to be to own a house and a car; today, many more of these consumers want to take international vacations. Similarly, affluent households are becoming comfort seekers, and they are willing to pay for it.
2 Over 200,000 England homes lie empty (Phillip Inman in The Guardian) More than 200,000 homes in England with a total value of £43bn were empty for at least six months during 2016 despite the desperate shortage of properties to rent and buy.
According to official figures, Birmingham was the worst affected city outside London with 4,397 empty homes worth an estimated £956m, followed by Bradford and Liverpool. The wealthy borough of Kensington and Chelsea was the worst performer in London as super-rich owners rejected renting them out or selling up in favour of leaving their properties lying idle.
In response squatters groups have sought to occupy empty homes, with one group in January taking over a £15m central London property purchased by a Russian oligarch in 2014 to open it as a homeless shelter. Councils and the government have worked to cut the number of empty homes, primarily by reducing tax incentives which encouraged owners to leave properties unused.
The trend for the world’s super-rich to invest in prime London property as a way to safeguard their wealth, without the need to secure a rental income, has meant the number of empty homes in Kensington and Chelsea rose 22.7% over the same period and 8.5% since 2015.
3 Flying car to go on sale (San Francisco Chronicle) A Slovakian company called AeroMobil has unveiled its version of a flying car, a light-framed plane whose wings can fold back, like an insect, and is boosted by a hybrid engine and rear propeller.
It will be available to preorder as soon as this year but is not for everyone: besides the big price tag — between 1.2 million and 1.5 million euros ($1.3 million-$1.6 million) — you'd need a pilot's license to use it in the air.
Several companies are working on flying cars, either like Aeromobil's two-seater that needs a runway, or others that function more like helicopters, lifting off vertically. But not many companies are seriously looking at marketing these vehicles anytime soon.
Among the big questions is how to control the air traffic if there are hundreds of such vehicles zipping through the air. So while vehicles like the AeroMobil could be used for recreational purposes by people who have a large piece of land, flying cars are unlikely to become a mass market reality anytime soon.
The AeroMobil has a driving range of about 100 kms (62 miles) and a top speed of 160 kph (99 mph). When flying, its maximum cruising range is 750 kms (466 miles), and it takes about three minutes for the car to transform into a plane. The previous AeroMobil 3.0 prototype made news in 2014 when it was presented in Vienna, but no test-flight took place then. It crashed during a test flight in Slovakia in 2015 with its inventor Stefan Klein on board. He escaped largely unharmed.