India's growing middle-class is one of the factors fuelling growth. This new - and young - consumer group is heralded in nearly every news article covering India Inc.

The middle-class myth

While it's true that there exists a sizable, increasingly wealthy "middle-class", don't fall in the trap of assuming this group is one consistent and easily recognisable consumer segment.

How big is the middle-class?

For a start how big is India's middle class? The seductive figure of 300 million people - or one-third of India's population - is frequently banded around. Vijay Mallya recently said:

"You rarely find a country with an acknowledged consumer class of more than 300 million people, and an economy growing at 9% per year. It would be quite idiotic to ignore the opportunity."

This figure is repeated ad nauseam, but respected India watchers like Deutsche Bank admit the real figure could be 10% of that.

Whatever the precise number, the real questions for entrants are: how many of India's middle class are consumers, and how many are in the market for foreign brands and services?

Why it doesn't matter

Whether the figure is 300 or 30 million (who knows for sure?), the fact is that the middle class label is too simplistic and over used. With the large variance in the figures that define middle class, the actual number becomes impossible to pinpoint.

Nancy Birdsall, president of Centre for Global Development recently created a stir by concluding that India has no middle class at all.

Birdsall defines the middle class of a developing nation as those who earn more than US$ 10 per day, excluding the top 5% earners of that nation. When this definition is applied to India, the numbers show that all people earning more than US$ 10 per day fall into the top 5%. These parameters eliminate the middle class completely. So then, what is correct?

The lesson for brand entrants

While the exact size of India's middle-class or consumer-class is near impossible to determine, there is clearly potential for entrants and the potential will only grow.

Companies looking at India need to be aware that India has markets within markets, and consumers aren't easily labeled. Consumer groups are fragmented and influenced by a host of things, including religion, geographic location, caste, education and the number of dependents within the family unit.

Foreign entrants need to look beyond the headlines and the big numbers, drill deep and invest time in understanding the market and subtleties of the Indian consumer.