India's dynamic economic transformation is reshaping consumer priorities, with a growing emphasis on experiences over material possessions. This evolution extends beyond traditional urban centers, with affluence increasingly evident in Tier 2 and 3 cities. The rapid growth of High-Net-Worth and Ultra-High-Net-Worth Individuals, expanding at 16% and 10% annually respectively, underscores this shift. This translates to the addition of one new HNWI every few minutes and three new UHNWIs every day. Notably, cities like Ludhiana, Agra, and Surat now rank among the top 20 Indian cities seeing a significant rise in millionaires.
This geographical dispersion of wealth is further highlighted in a recent white paper by Visa Consulting & Analytics, which indicates a remarkable 175% surge in card spending in non-metro regions between 2019 and 2024. This surge in consumer spending is driving demand for luxury goods and creating unprecedented opportunities across various sectors.
The Digital Economy Effect
This upswing is driven by a confluence of factors, including rising incomes, rapid e-commerce growth, and proactive Government initiatives like Digital India and India Stack which have significantly enhanced digital infrastructure nationwide. The Unified Payments Interface (UPI) has played a transformative role by democratizing access to financial services and empowering individuals and businesses alike.
India is on the cusp of a significant wealth surge, projected to have 32.7 million super-rich households by 2046–47, largely driven by younger generations in their 30s and 40s. Understanding the nuanced preferences of this demographic is crucial. Notably, UHNIs are increasingly allocating capital towards collectibles, with 94% investing in fine jewelry and 73% in art. Perhaps more significantly, a shift in celebration culture reveals that 81% of Indian travelers now prioritize curated luxury travel experiences over lavish weddings, indicating a fundamental move towards more intimate and enriching engagements.
Visa's Approach: Enabling Aspirations
Recognizing this profound shift in consumer behavior, Visa strategically aligns its financial solutions to empower the evolving aspirations of India's affluent consumers. Our collaboration with partners like HSBC showcases this commitment. HSBC Live+, a lifestyle card developed in partnership with Visa, caters specifically to the preferences of affluent consumers, offering bespoke rewards programs and exclusive travel benefits.
Security remains paramount in our approach. Innovations like tokenization enhance online payment safety by replacing sensitive card data with secure tokens, reducing fraud and protecting user privacy. We’re also building features such as in-app card payment through device tokenisation with partners such as CRED and PhonePe – offering consumers with mobile wallets unmatched security.
Redefining Travel and Global Spending
Visa Travel Trends data underscores the growing appetite for exclusive experiences, revealing a significant 250% surge in outbound spending on luxury and duty-free goods in Q1 2024 compared to Q1 2019. Our collaboration with the Tourism Office of Spain (Turespaña) exemplifies this growing demand for luxury travel among Indian tourists. Leveraging our global network and deep data insights, Visa is committed to making every international trip more personalized and rewarding.
Looking Ahead
As India progresses towards its potential as a global economic powerhouse, the financial services sector must continue to evolve in tandem with these dynamic shifts across all consumer segments. At Visa, our commitment remains steadfast in empowering every individual through continuous innovation, fostering financial inclusion, and ensuring secure digital access.
By proactively staying attuned to India's evolving consumer behavior, embracing emerging trends, and forging strategic partnerships, Visa is a committed contributor to a more inclusive, prosperous, and experience-driven future for India.
- Sandeep Ghosh, Group Country Manager, Visa India and South Asia