India's consumption story changes track as OTT, travel and premium phones outpace staples: Report

New Delhi [India], May 24 (ANI): India's consumption story is undergoing a sharp shift, with households increasingly spending on mobile data, OTT platforms, premium smartphones, live events and foreign travel, while the share of food and staples in household budgets continues to decline, according to a thematic report by Kotak Mutual Fund.
The report titled "The Great Consumption Shift" said, "Indian wallet has moved from cereal to data to OTT to mobiles," highlighting how India's spending patterns are being reshaped by digital consumption, experiences and premiumisation.

According to the report, India's foreign travel spending has surged nearly 450 per cent over the last eight years, reaching around Rs 1.45 lakh crore in FY26 up to February, making it larger than the country's entire building material industry comprising plywood, tiles, pipes and laminates.
The report said, "Foreign travel dominates outward spends in FY26," while overseas investments in equity and debt have risen 7.3 times over the last three years.
Kotak Mutual Fund noted that Indian households are no longer primarily spending on food, with the share of food in monthly per-capita spending falling sharply in both rural and urban India. The report said the share of cereals in household spending fell from 22 per cent to 5 per cent in rural India and from 12 per cent to 4 per cent in urban India between 1999-00 and 2022-23.
"Mobile, automobiles, durables, rent and education are the new pillars of urban household spending," the report stated, adding that the trend reflects Engel's Law, under which households spend a lower share of income on staples as prosperity rises.
The report also highlighted the rapid rise of new-age consumption categories. OTT paid subscribers grew at a 40 per cent CAGR between FY19 and FY26, the hearables market expanded at a 52 per cent CAGR, while Apple India's revenue recorded a 47 per cent CAGR over FY19-24.
In one of the report's key comparisons, Kotak Mutual Fund said Apple India is projected to generate nearly double the revenue of Hindustan Unilever Ltd (HUL) in FY26 despite catering to a much smaller consumer base.
The report further observed that while overall smartphone sales remained flat, premium phones priced above Rs 30,000 increased their market share from 20 per cent to 26 per cent between CY20 and CY25.
India's live events industry has also emerged as a major consumption category. The report estimated the industry size at around Rs 20,861 crore, comparable to the country's organised footwear market. "Concerts. Premieres. The 'going-out' boom," the report said, noting that the number of ticketed live events in India rose from 19,000 in 2022 to 34,000 in 2025.
At the same time, the report flagged rising financial stress among households. It said EMI burden outpaced salary growth in five out of the last seven years, while household net financial savings as a share of GDP declined sharply after the pandemic period.
The report also highlighted the growing impact of speculative trading and digital fraud on household finances. According to the report, retail traders lost Rs 2.87 lakh crore cumulatively in the futures and options (F&O) segment between FY22 and FY25, with 91 per cent of individuals losing money in FY25 alone.
Kotak Mutual Fund further said digital fraud losses over the last six years amounted to nearly Rs 53,000 crore, which it described as equivalent to the size of India's branded quick-service restaurant industry.
"Speculation loss and fraud, eating into consumption," the report said, adding that money once used for household consumption is increasingly being diverted towards speculative losses and scams. (ANI)