Impact of the new middle class on consumer behavior: a case study of Delhi-NCR

Abstract

PurposeThe paper examines the increase in annual income of the new middle-class (The NMC) of Delhi-NCR and its impact on their investment habits, consumption habits and lifestyle. The paper aims to look into the transformation of the new middle-class into the NMC in emerging economies and its potential to the companies and investors.Design/methodology/approachThis study draws insight from 558 new middle-class consumers in Delhi-NCR. ANOVA, post hoc tests , and hierarchical multiple linear regression model are applied to test the proposed hypotheses.FindingsThe NMC living in India's megacities imitates the lifestyle of their counterparts living in the West. To maintain their status and present themselves different from those living in middle or lower-middle-class categories, they spend audaciously, even though the income is low. When they enter the new middle class, their consumption, saving and lifestyle diversify positively.Research limitations/implicationsThis study has limitations. First, the authors do not apply any behavioral theory or marketing model such as the theory of reasoned action (TRA), Engel-kollat-Blackwell (EKB) model or theory of normative model of target markets. Second, the research is limited to the NMC of only one emerging economy, i.e., India. Third, the research sample is limited to only one megacity of India, i.e., Delhi. Finally, this research used only one factor, i.e., AI, to study the consumption pattern.Practical implicationsThe results suggest that considering the buying habits and lifestyle of Indian the NMC, consumers would prove helpful to the companies in product decision-making. Furthermore, understanding change in investment habits across different income levels would be advantageous to financial institutions, investment planners and marketers while designing their products to attract investment.Originality/valueThe research holds significance from the point of view of understanding Indian consumers encompassing the the NMC and predicting their implications on consumer goods-producing industries, which shall, in turn, facilitate producers and government in formulating policies and strategies.

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“…Chaudhary and Khatoon (2022) analysed the impact of the new middle class (NMC) on consumer behaviour in Delhi, India. This study drew insight from 558 new middle-class consumers in Delhi NCR.…”