India Today has a cover story on Wired Generation – dont know whether its humor or satire of India’s most respect editorial team to have claimed “most of India’s 200 million middle class homes now have computers”! And this is a managing editor… not once but twice in the same article!
Now just wait and watch entrepreneurs use this “fact” in their pitches 🙂
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Cram, there is a difference between 200m strong middle class (40-50m households) and “200m households” which is what the India Today story says. Over a period of time, the numbers on “middle class” has been lowered, as more and more brands have failed to discover that class.
Shish, there is no single number as far as I am concerned. The most authentic survey of Indian income and consumption pattern is done by NCAER, and the latest report can be found here. So, for example, penetration of color TVs is expected to go from 21% to 31% households in next 4-5 years. The same report classifies households with income of 2-10 lakhs (at 2001-02 prices) as Middle Class. They report that number of such households is 16.4 million and will go to 28.4 million in next 4 years.
The most accepted number around internet penetration is 30-40 million total users, and around 25 million active (access once a week) users, as per the NRS. While last year we heard numbers from 20-50 million from different people, most of the industry seems to believe these numbers now.
Finally, want to emphasize that the issues is not about getting this wrong by 20% or 30%. Even if your current numbers are correct, there is always an uncertainty on future numbers. The issues crop up if the numbers are off by an order of magnitude. And it happens frequently from what I have seen.
Alok: What are the numbers – of middle class, homes with computers, people who have access to the Internet, people who can do Internet payments, and mobile phones in India – generally acceptable to VCs? What is the definition of “middle class” VCs typically do not mind? What are the sources of these numbers? How are these numbers generally estimated?
The Indian media is such a joke.
Hi Alok
It’s widely perceived that India has a 200-m strong middle class (I”ve heard these claims being made from the time of Rajiv Gandhi’s demise!). This would give a rough figure of 50 m households.
I am at a loss on definition of middle class. Is it purchasing power or is it lifestyle-based (where you live, how you live, what you do with your money, what you do for a living, etc)?
Now that the Internet and mobile phones are no longer the preserve of the elite, I don’t think the parameters of class really matter to the success of mass market consumer Internet companies.
Suman, I dont think most of 200m indian households even have a microprocessor at home (I assume you imply a cell phone), given there are 100 million or so cellphones, and in affluent families its a norm to have more than one per family. I think the first error the article makes is in calling all 200m households “middle class”!