A recent CNBC TV18 article highlighted how Indian households are spending differently today compared to two decades ago. India’s consumption story is changing rapidly. These shifts are important signals that can influence businesses, markets, and eventually our investment portfolios.
First, let us understand how consumption itself has evolved.
Between 2000 and 2023, the share of urban household spending on consumer staples, groceries, and daily essentials declined from 48% to 39%. Naturally, the question that comes to mind is, where is the money going instead?
The money is going towards data, devices, delivery, and experiences.
Consumers today are spending more on smartphones, internet connectivity, OTT subscriptions, food delivery, dining out, domestic and international travel, concerts, and lifestyle-driven experiences. Connectivity, digital access, convenience, and experiences are increasingly becoming as important as traditional necessities such as groceries and household items.
The impact of these changing preferences is clearly visible in the performance, turnover, and profitability of listed companies.
Over the last five years, Apple India’s profitability has reportedly grown nearly six times, while Unilever India, a household name associated with products ranging from toothpaste to shampoos, has grown only about 1.4 times during the same period. Consumer preferences are gradually shifting from basic consumption towards aspirational and premium consumption.
Alongside this shift, another important trend is emerging.
Income growth has not been uniform across sections of society. In urban India, the rich people have got an income growth of around 18%, while the urban masses segment, i.e., the salaried class and others, have got an income growth of around 6%. This indicates that a large part of consumption growth is currently driven by the wealthy, affluent Indian population.
At the same time, internet and digital spending have grown sharply, while wage growth has remained relatively muted. As a result, aspirations are rising faster than incomes for many households, creating a widening gap between what people desire and what they can comfortably afford.
Post-COVID, there has also been a surge in the number of people entering the capital markets with the intention of creating an additional source of income. While this is encouraging from a financial awareness perspective, another worrying trend has emerged, that is, the rise of speculative trading.
Between 2022 and 2025, retail participants reportedly lost nearly ₹2.87 lakh crore in F&O trading. This represents a massive erosion of hard-earned savings. For many middle-class families, stagnant income growth combined with speculative losses can significantly damage long-term financial security.
So, what is the moral of the story for investors like you and me?
Markets are dynamic. Consumer preferences evolve. Business leaders rise and fall. Political, economic, technological, and geopolitical developments constantly reshape opportunities. A strategy that performs exceptionally well during one phase may underperform in another. There is rarely a one-size-fits-all solution in investing.
Many people still believe trading is the fastest path to wealth creation. However, the investment landscape is changing faster than most realize. Building wealth and maintaining a healthy portfolio involve far more than identifying the next hot stock or market trend. Successful investing is often driven by behaviour. It requires patience, discipline, and the ability to keep emotions under control.
A disciplined approach through carefully selected mutual funds, diversification across sectors and market capitalisations, and consistent long-term investing is likely to be far more rewarding than chasing short-term speculative gains.
Shreedhara is the Founder & Director of Ara Financial Services Pvt. Ltd. He has an experience of over 2 decades in Financial Service Industry with majority of it in guiding individuals and institutions on their investments requirements.
