Consumer India has always been pretty tricky to double guess. Just when we believed that consumer spending was firmly on a high growth trajectory - based on the wonder years of 1993-98 - it spluttered and slowed to a crawl. For the next few years, marketers tried everything they knew to speed it up again. They dropped prices while improving product and service quality. "Buy-one-get-one-free", they offered. But that only helped them get volume growth at the expense of operating margins. The fast-moving consumer goods (FMCG) sector had a terrible time with some product categories actually shrinking in size, while consumer durable manufacturers struggled to reconcile capacity with demand. Sure, there was a fast growing yet minuscule population of the very rich, which continued to lap up everything from plasma TVs to Mercedes cars - but that was cold comfort for the majority of the marketers.

After much agonising, marketers came to the conclusion that the five-year boom of 1993-98 was a one-time star burst, unlikely to be repeated in the near future. The growth spurt of those years was attributed to a confluence of events - release of pent-up demand of the rich who always had money but nothing much to buy before this; a television boom that fuelled aspirations; a distribution boom that brought products and services within easier reach; the discovery of the sachet strategy that made everything affordable to more people; and, finally, a string of good monsoons.

They also shelved the idea of the huge homogeneous mass market made up by the great Indian middle class, which would be a tireless engine of growth. And, having come to terms with the new reality of the market, exhausted marketers worked hard on tactical actions to stimulate growth even while turning their gaze inwards, focussing on operational performance improvement and financial restructuring to keep the bottomline growing.

Meanwhile, a lot of little changes were taking place in the market. Each change, when viewed in isolation, could easily be rejected as not being particularly significant. But over time, and taken together, they have provided a critical mass of change. And created a deep and distinctive consumer market.

It is a market whose potential and desire to consume has perhaps moved ahead of the marketer's mental model of it. It continues to be a multi-tiered market, with the bicycle and the business class co-existing. It continues to require a portfolio of price/performance points. But it is a market that is now unified by certain common demographic characteristics and consumption desires. And which has enough mass to act as the springboard for the next stage of the consumption cycle. The question is: are there enough relevant products and services available to take advantage of this? In short, it does appear that the Great Indian Consuming Class has arrived, and is waiting to be served.

Before we get into what this new class looks like, a quick look at some of the important changes that have taken place:

Income growth: Between 1996-97 and 2000-01, per capita income on an aggregate basis grew by a compounded annual rate of 3.2%. But high-income households grew much, much faster - by about 20% year after year - between 1995-96 and 1998-99, according to the National Council for Applied Economic Research (NCAER). Upper-middle-income households grew by 10% on a compounded annual growth basis during that period. In urban India, the trend is even more pronounced (See 'Upper Classes On The Fast Track').

Affordability growth: Supply-side changes also shape a market's buying power, and there have been a host of them - falling interest rates, easier consumer credit, increase in variety and quality of products and services at every price point....

The liberalisation children grow up: The post-liberalisation generation is coming of age. This year there are a 100 million, 17-21 year-olds in India, and six out of 10 households have a liberalisation child. This is a generation which has grown up with no guilt about consumption.

The morphing of rural India beyond agriculture: Rural India has reduced its dependence on agriculture. A little less than half of rural GDP is from non-agricultural activities. This is creating a different kind of rural market. NCAER occupation data shows a decline in cultivators and there is enough evidence of dual-sector households. Add to this the exposure levels of the top end of rural society through television, and the rural market is becoming closer in its mindset to the urban market. This is already happening in the more developed higher-income states.

The rise of the self-employed: Rural India has always been largely self-employed. But now the proportion of the self-employed in urban India has risen to 40% plus, replacing the employed salary earner as the new 'mainstream market'. A Hansa Research Group (HRG) study shows that even in the 'creamy layer', comprising the top two social classes in towns of 10 lakh plus population in urban India, 40% of chief wage earners of households are shopowners, petty traders, businessmen and self-employed professionals.

Unlike the salary earner, the self-employed use products much more to signal success and are also fast adopters of any productivity tools, like cellphones and two-wheelers, that can help them earn more.

Environmental changes drive aspiration: Better connectivity and communication, and the literacy leap, are together increasing the aspiration of the Indian consumers at every level. The reason why these changes drive aspiration is lucidly explained by the well-known anthropologist, Arjun Appadurai, of Yale University: "Imagination is not about individual escape. It is a collective social activity. Informational resources are needed for people to even imagine a possible life, weave a story and a script around themselves, and place products in emerging sequences. Imagination may not always lead to action, but it is a prelude to action."