Although it is less defining and rigid today than ten years ago, and an interventionist government is attempting to improve social and economic mobility, it still hangs in the air. Govind is a Rajput—the proud warrior caste that once ruled the princely states of northern India. He wears a dark moustache, a marker of his masculinity and his martial heritage. Yet what really distinguishes Govind are his possessions: for a man who started with nothing, these are the things that really count for him.
Born in 1971, some twenty years before the introduction of the market reforms that would signal India’s reentry to the global economy, Govind was raised in a hut in Jhalana Dungri, one of the most deprived areas of Jaipur. Like Guojun, he was the eldest of three boys and, as such, was expected to help provide for the family from an early age.
His father, a painter, brought home about 50,000 rupees, or about $1,100, per year. Young Govind, offering his services as a day laborer and painter, was soon earning enough to help the family. “I started working when I was fifteen,” he explains. “With the money I made, I was able to put myself through school and support my father.”
He left school at nineteen and started full-time work. Very soon, he was earning around 35,000 rupees ($750)—about two-thirds of his father’s income. His turning point came when he met his wife. “She’s my great inspiration,” he says. She was a student at the local college when a matchmaker first introduced them. She was studying for a degree in education in order to be a teacher. “I realized that being a painter’s helper would not allow me to achieve what I wanted for my family,” he explains. “I wanted to do something more than just be a painter or contractor.”
This was the mid-1990s, and the Indian car market was just opening up. Until then, the Hindustan Ambassador, modeled on the stately 1950s Oxford III from the now-defunct British Morris Motor Company, was the classic Indian automobile—so much so that it was dubbed “King of the Indian Roads.” Govind took a second job as a car-wash attendant, supplementing his income as a painter. “I used to wake up at four a.m. and clean cars for people and then start my day job at nine a.m.,” he recalls. “And then, in the evenings, I learned to drive and earned a driver’s license.”
Handsome, well groomed, and physically fit, he was selected as the chauffeur for a prominent businessman in Jaipur. “I drove a white Fiat in those days,” he recalls, “and I learned all that I needed to know about how cars work.” This knowledge proved to be critical in his journey to prosperity. In his late twenties, he decided to start a small business selling secondhand cars, which he ran alongside his day-to-day work as a driver. “I bought a rundown car and put it into shape,” he says. “I worked on it for nearly two months—working most nights from eight p.m. till midnight. I earned nearly 20,000 rupees ($430) on that deal.”
This was big money for Govind, and he has not looked back since. He started dealing in cars—buying, repairing, and reselling them. Last year, he estimates, he completed as many as twenty such deals. With more money in his pocket, he was able to leave his job as a full-time chauffeur and become a free agent, driving people for special occasions: many Indians drive their car in the city but hire a driver for long-distance trips.
Today, his annual income is more than 500,000 rupees—about $11,000, a tenfold increase in twenty years. Middle-class status symbols of success are all around him: a TV by Videocon, a refrigerator by Godrej, a Suzuki car, and a Honda motorcycle. And then there is his house: a three-bedroom house in a middle-class district. It says a lot about Govind—not only his position in society but also his hunger for more. He is always on the lookout for ways to boost his earnings. At one point in our meeting, he leaned over and offered to buy our car. “I will make you a good deal,” he said. We declined.
About twelve years ago, he bought a small plot of land, paying 100,000 rupees ($2,200). “No bank was willing to give money to a person like me at that time, so I borrowed small amounts from people I worked with and slowly paid them back over six years.” In 2008, he started building, seizing on a time when he believed that the prices of steel and cement were relatively low. He invested in the contents as well as the construction of the house. He is especially proud of the two air conditioners that he had installed. Manufactured by General, among the most expensive brands, they provide cool air in the hot Jaipur summers. “It is the best Japanese brand, so it has to be good quality,” he says. “It also uses less power than other brands.”
Now, the house is worth 6.2 million rupees, or $130,000—a fortune for Govind. But it is not luxurious, at least not in the Western sense of the word. It is a simple, single-story, rust-pink building. The bathroom is basic: there is a faucet, which is used to fill a bucket for a makeshift shower; a small mirror that he uses for shaving; and a basic toilet, but no tissue. Also, the power supply is intermittent—electricity is routinely cut in the afternoon between 1 p.m. and 3 p.m. It is for this reason that he bought a direct-cool refrigerator that can keep food cold for four hours without electricity. He also has a washerman, who comes to his house to hand-wash and air-dry his clothing.
To further boost his income, Govind joined Gold Souk, a marketing firm, as a part-time, commissioned sales rep. In the last three years, he has earned more than 1 million rupees ($21,000) in commissions. For all his newfound wealth, however, Govind is still hungry for more—for himself and for his two children.
He dreams of taking his family on holiday to Dubai and Singapore. He also dreams that his children will achieve more than he has and all that they wish for. “I spend about 5,000 rupees ($100) every month for their education. My son is doing well in school—he got 90 percent in his exams. I hope that he becomes an engineer. I don’t want him to go through the struggle that I had to go through.”
As Govind talks, he chews tobacco. He doesn’t smoke or drink alcohol. A serious man, he is rightly proud of his success, his hard work, and his ability, through his own endeavors, to pull himself up by his bootstraps. “When I was sixteen years old, I never thought that I would one day have a house of my own, a foreign-made car, and a motorcycle. But I’ve learned that with the right effort, one can achieve anything. I work fifteen to sixteen hours a day, seven days a week, and that’s why I have reached this point. But I will still do anything to earn more money. I want to double my income every three or four years. I want to make sure that I am able to buy a better house, send my son to a good college, and provide my family with everything that I never had.” (He does not talk about sending his daughter to college.)
He feels this passionately. When he said “double my income,” he repeated it over and over again, jabbing his finger for emphasis. He is a man on a mission.
Consumption Curves: How Middle-Class Consumers Spend Their Money
Food, homes, household appliances, transport, education, health care, clothing: these are the things that middle-class consumers, enriched with higher incomes, are starting to spend their money on as never before. The number one item on the family shopping list is food. But if this is striking, expect growth that is even more spectacular in other consumer categories as more and more people join the middle class.
The second-biggest item on middle-class consumers’ shopping list is housing and household appliances. In China, household appliances were the number one category that people wanted to trade up to in 2011, according to our annual survey: some 53 percent of consumers registered their intent to spend more on TVs, refrigerators, and computers.
These figures underscore Chinese and Indian consumers’ extraordinary optimism about their future. As described in chapter 1, some 39 percent of Chinese consumers and 34 percent of Indian consumers expressed an intention to trade up. By contrast, only 18 percent of Americans and 16 percent of Europeans did so.
Yet, as they grow richer, they become even more optimistic, and their spending behavior evolves in a distinct way. In years past, the evolution of people entering the middle class and rising to affluence was hard to observe because so few people made the journey from poverty to prosperity. In the last ten years, however, the transition has been dramatic, like a fast-forward video of social transformation.
To monitor this transition, we use a tool we call a consumption curve to help us to establish how consumers change their spending habits as they earn more money. Different types of products have differently