Middle Class Accounts for Bulk of Urban Spending

Tuesday, April 21, 2009

The bottom of the pyramid is the buzzword that has captured the hearts and minds of academics and marketeers alike. Though large in numbers, the consumer spend by this segment is quite low.

What we find is that it is the middle bulge of expenditure by the middle class that accounts for the bulk of India’s urban consumer expenditure. About 61% of total urban income comes from households that can be classified as middle class—earning be-tween Rs75,000 and Rs5 lakh a year.

This segment comprises the lower middle-class earning between Rs75,000 and Rs1.5 lakh a year (10% of total urban income is from this category), the middle-class earning between Rs1.5 lakh and Rs2 lakh a year (29% of income share) and the upper middle-class earning between Rs3 lakh and Rs5 lakh a year (22 % of urban income).

Source: Live Mint (link opens in a new window)