MSMEs can often be referred to as the engine of our economy but middle class can be viewed as the fuel that pushes our nation toward the goal of social economy prosperity. According to the PRICE”s report, as India establishes itself as one of the fastest-growing economies by 2031, the Indian middle class-households earning Rs 500,000 to Rs 3,000,000 will constitute about 38% of the population of the country. Thus, the largest consumer segment can critically shape the future of consumption.
As such, any real sustainability today has become an integrated approach that demands environmental preservation, social justice, and economic prosperity. In the arena of consumption, sustainable and purpose-driven choices become the rising trends in India.
India is already the youngest country in the world, with 65% of Indians under 35 years and a diverse, sprawling population-so India’s burgeoning middle class is like a hot selling point in the future market. By 2030, when disposable incomes rise, awareness increases and people demand better quality of life, this middle-income segment will then drive an astonishing 75% of total consumer expenditure in India, according to a very recent Ott survey by World Economic Forum and Bain. Of this additional expenditure contribution, it is expected that the majority will be allocated towards premium and sustainability-established products. This opens up a vast and ever-expanding market for products with a conscience.
There are studies that illustrate a tilt towards sustainability in the consumption patterns of India’s middle class. A Nielsen report highlights that 73% of Indian consumers are willing to pay more for products from ethical brands. This shift is driven partly by Millennials and Gen Z, who are passionate advocates of social equality and environmental consciousness. They are also an important constituency of the market, wielding not just purchasing power but also influence. However, this willingness can vary, especially in cases where a green badge, such as with electric vehicles (EVs), might come with a higher price tag. Enterprises must recognize this trend and prioritize sustainability in their offerings to meet the evolving preferences of this demographic.
Government initiatives and suitable policy frameworks are also helping businesses bolster their shift towards greener products at scale. According to a survey by SAP, 86% of Indian organizations recognize a moderate to strong relationship between sustainability and profitability, with 39% of businesses planning to increase their investments in sustainability over the next three years.
Realizing the need to quickly adjust to the shifting consumer preference, organizations tend to adopt measures to be in the mainstream ahead of the curve. Discussing including sustainability in social forums like Instagram and Twitter helps an enterprise track trends and sentiments in real-time. Online reviews on the e-commerce platform like Amazon provide direct feedback from consumers regarding experiences with sustainable products. Thus, gaining insights from these reviews would require businesses to tailor their product offerings to meet consumer expectations so that their products do not lack important features in eco-friendly and ethically sourced products considering quality and perceived value.
The FMCG major has been able to garner the attention of the consuming populace by talking about purpose and relevance in its marketing communications through storytelling and transparency. This approach significantly enhanced brand relevance and drove over half of the business and growth for the company.
In another example, a key success factor for electric vehicle brands has been their role as visible expressions of consumers’ conscious choices. Owning an electric vehicle is not just about reducing carbon emissions; it’s also a public declaration of one’s commitment to sustainability. This visibility is crucial in fostering broader adoption of green choices.
To replicate this successful transition across a wider range of consumer products, businesses need to create innovative green badge solutions. These ‘badges’ would allow for product differentiation and serve as visible markers of a product’s sustainability and purpose, enabling consumers to showcase their conscious choices. A green badge might indicate that a product is made from recycled materials, supports fair trade practices, or is carbon neutral. This concept can help consumers make informed purchasing decisions, feel a sense of pride and responsibility in contributing to sustainable choices, and make a visible statement that can influence the wider community.
Their purchasing power and the inclination to buy more socially- and environmentally-conscious products has grown in tandem with the increase of India’s middle class. This change requires the enterprises to translate their strategies from merely conserving value to actively creating value as well as competitive advantage through sustainability initiatives, in order to remain both relevant and competitive. Businesses can gain competitive advantage, improve the brand image, and accelerate their growth by fully embedding environmental and social responsibility in core business strategies. Sustainability is not just a fad; it upturns consumer behaviour dramatically. It is an opportune time to ride this shift and propel the consumer narrative towards sustainable and purpose led consumption.
The author, Shrijeet Mishra, is a Strategic Advisor, Board Leader, Digital Transformation & ESG Advocate