Whats wrong with this picture?

Every newspaper, magazine and TV channel covers the Indian consumer boom with monotonous regularity. I am numb from hearing terms such as 300-million-middle-class, rising aspirations, credit-culture etc. One of my pet peeves is that most of these articles (and the data they quote therein) are poorly researched, inconsistent or plain wrong. What worries me further is a culture where we as readers/viewers neither notice nor question these mistakes. I would like to use a recent example to highlight the fact that we are relatively loose with data and assertions. My objective is to get each of you to ask “Hey, does this make sense?” the next time you see any data being thrown across by so-called experts and then come to an independent, fact-based and rational view-point. Take a good look at the chart that I have attached. This is from a recent research report on the Indian consumer, published by the equity research division of a decent investment bank. Further, the chart quotes its source as market research done by another well-known consultancy. Given this pedigree, one would assume that they have their facts right. I did so too, and my first reaction was that the Indian consumer spend on lifestyle categories was a significant 30% (add up books&music, entertainment, movies, eating out and vacation). Just as I was thinking that I needed to apologize for being wrong in my more pessimistic post on the same topic, I noticed that this picture didn’t really add up. Take a second look. What do you think? Here’s what I thought:

• These categories cannot possibly add up to 100% - what about health, education, rent (or EMI on home loan), power/fuel, transportation, communication??? I didn’t know these were free!
• Some glaring inconsistencies, both within the report and with respect to market data
• A 10% eating-out expense is great news for restaurants. Then I wonder why the report goes on to size the restaurant market at Rs. 11,500 crore vs Rs. 17,600 crore for branded apparel (after all, this says that entire clothing spend is only 7% of the basket). Don’t even mention the fact that branded apparel in India accounts for under a third of the total apparel market.
• The chart claims that people spend more money on books & music than on durables. A quick google search on “India music industry size” throws up an estimate of Rs. 450 crore. I don’t have an estimate on books, but expect it to be in the same order of magnitude. TVs alone sell over Rs. 13,000 crore a year.

I know I’ve quoted all-India market sizes, while the chart refers to urban spend (wonder if you noticed!). However, my comparisons are like-to-like, and shows that some of these inconsistencies are glaring and off by an order of magnitude. I encourage you to spot other mistakes in this data (e.g. savings look kinda low, wonder how large the Indian movie industry is). Note that I’ve taken an example from a detailed (the entire report is over 180 pages) report, published by a good quality firm, targeted at discerning investors. This problem is a lot worse in newspaper and TV sound-bites. All I can say is, Reader Beware.