As China struggles to reawaken its economy from a Covid slumber, India has been stepping into the spotlight. Although India is coming from a lower overall base, consumption is already a far more significant contributor to national income than is the case in China.
Arisaig have been investing in the Indian consumer for more than 25 years. We own businesses covering everything from packaged food to diagnostic testing; via apparel retail and digital platforms. Our goal is to capture sustainable domestic demand growth.
Despite having a research office in Mumbai for nearly 20 years, we have long recognised that our team can never fully represent the diversity of the Indian population – there are 28 states, 120+ major languages spoken and over a thousand regional festivals celebrated every year in India. A key part of our process before investment involves undertaking ‘household visits’ in order to deepen our understanding of market share trends as well as cultural and regional differences.
While India may now be the largest population of consumers in the world, economic opportunity is far from equal. Female workforce participation in India is only 25%, an alarming backslide from 32% back in 1990 despite significant progress across other development indicators over the same period. This, in turn, compares highly unfavourably with global peers – including China at 62%. It is hard to imagine a scenario where productivity growth really starts to fly in India, yet women continue to be confined to the home.
Our recent research in Kumarapatnam, a small town of c. 7,000 residents in south-west India, found that opportunities for India’s women are improving, albeit at a frustratingly slow rate.
The main positive from was the firm stance among families that education was as important for daughters as for sons. This is reflected in female secondary school enrolment, which has more than doubled from c.37% in 2000 to more than 75% today, according to the World Bank. Indeed, in our conversations with local mothers, the subject of their daughters’ education stirred evident pride, perhaps reflecting relief that their own exclusion from opportunity has not repeated down the generations.
While rising education levels are important in creating a more modern outlook of a woman’s role in society obstacles for Indian women, challenges to advancing from education into the workforce remain particularly evident.
First, while it is a challenge globally for women returning to work after having children, our research clearly showed that in India, marriage can be a stumbling block even before this decision point arrives. Marriage reassigns decision-making power for a woman’s progress in education or a career from her parents to her husband and in-laws. A woman’s career progress, therefore, becomes dependent on her in-laws having a modern mindset.
Second, outside the more proven educational pathways to professional success in India, for example qualification to become a doctor or engineer, the headwinds can be greater. Non-traditional courses, such as business administration or design, do not necessarily get the same support.
More positively, there is an increasingly established trend of women contributing to a vibrant community of micro-entrepreneurs in India. Successful small businesses not only improve living standards, but in turn support independent decision making.
The reality is that while change never feels fast enough, young women will enjoy far greater agency and freedoms than their mothers and in turn, they will be empowered to ensure that their daughters feel the same way. This leads to an overarching sense of aspiration for a better tomorrow that is becoming increasingly common to all parts of India’s economy.