The Rural Consumer Myth – II
Consumer Trends

The Rural Consumer Myth – II

“We should envision villages smartly and not assume that they are at a lower evolutionary stage.” By Rama Bijapurkar & Rajeev Shukla The recent media attention paid to the rural economy would make it seem as if the rural consumer is a different Indian altogether. But this is not such an open-and-shut case. In the first of our two-part article on Wednesday, we had concluded that the rural economy isn’t as isolated from the urban downturn or from the vicissitudes of agriculture as most would imagine. Here we address the issue of the nature of the rural consumer, etching out a mental model. Many of us are not sure how much water of progress has flowed under the rural bridge. Some are beginning to wonder if there is indeed a rural-urban market divide. A corollary to this is the growing belief that our domestic market has at last reached a […]

March 26, 2009 0 Comments
The Rural Consumer Myth – I
Consumer Trends

The Rural Consumer Myth – I

“Growth in the hinterland is neither insulated from the rest of the world nor any different from it.” There is a worrying groundswell of optimism that rural consumers will come to the rescue of an Indian economy which is in the midst of a sharp slowdown. This optimism may be misplaced. We examine two issues. One: How safe and insulated is rural consumption, both from the travails of the world around it and from its own special sources of volatility and shock? Two: How different is the nature of rural consumption, now and going forward, both from its urban counterpart, as well as from its own past patterns? We’ll tackle the first issue in this piece and the next in the concluding article. Hearing phrases such as “rural renaissance” or “rural India to the rescue”, makes us nervous. Such talk bears overtones of the “Great Indian Middle Class” story of […]

March 25, 2009 0 Comments
MBA Placement Season 2009
Business Strategy

MBA Placement Season 2009

The tough decision for this month’s column was whether to write about the prognosis for consumer demand in India, post the global meltdown, India slow-down, e-sops (as the ET elegantly described vote inducing election expenditure); OR whether to write about what lessons placement committees (mostly comprising students) of top tier MBA schools ought to learn and act on, after the 2009 stressful placement season. This column opted to discuss the latter, because we want to urge future leaders of India Inc. to use their intellect and education to courageously depart from the past and do things differently for the different world of the future. If they are content being status-quo-ist in their placement models with the justification of “hamare khandaan ke purane rivaaz hain”, they are out of step with the mindset that winning companies of India Inc. and the world want and need. Closer home, students running placement at […]

March 3, 2009 0 Comments
The Three Ns of Made for India
Business Strategy

The Three Ns of Made for India

“Nirma, Nokia, Nano: Market creating products that truly understand the India Consumer.” Sasta, Sundar, Tikau, the mantra for success in the Indian market, has just got a new benchmark, and a new poster child: The Nano. Nirma took the Indian market by storm, as did Nokia, and as we hope, will Nano. What they all have in common is that (1) they are market creators unfettered by analyses of what the current market size is and what it is forecasted to grow to, (2) they recognise that current product markets are the size they are not because Indians are too unevolved to have desires, but because they don’t have enough money and (3) they start with a potential customer base (and not a current industry size), they define a price and a quality that customers will accept, and then challenge themselves to deliver it profitably. It is here that many companies, […]

March 24, 2009 0 Comments
Going Native In Bits
Consumer Trends

Going Native In Bits

Matters came to a head when mother asked me to wear a half sari to Miranda House. The native place became my official enemy. Copious explanations were given about our “back home” to neighbours in the cantonment, to explain exactly what kind of ‘madrasi’ we were-and were not (“No, no, we don’t use coconut oil and eat fish, we are not from Kerala. In ‘our parts’, we cook in til oil, eat lots of red chillis”). And every year, when my father got his annual leave and ltc, the “native place” loomed large, as did the furrows on my mother’s forehead. That’s when our Telugu would have to be brushed up, my clothes reviewed for modesty, the hateful long silk skirts (pavadais or “park-in-ee”) brought out of the trunk, and a string of dos and don’ts dinned into me. Don’t be rude, don’t be forward, don’t say you don’t like […]

March 20, 2009 0 Comments
Bharat Buying
Demand Drivers

Bharat Buying

In a previous column in this paper, I had suggested that what was more likely to upset our economy was, companies failing due to bankers’ reluctance to lend, than evaporating consumer demand. I had, perhaps naively, suggested that instead of the government spending good money to bail out consumer demand, they should spend it to incentivize banks to lend to those companies, which are otherwise fundamentally healthy, but suffering from a severe hangover, due to excessive expansion in boom time. This has elicited a sharp response from bankers who say they are not in the ‘bailing out’ business, and must evaluate lending risk even more stringently now than they did in the past. THAT IS A FAIR POINT; HOWEVER, THE RISK ASSESSMENT HAS TO BE SOPHISTICATED ENOUGH AND AT THE FIRM LEVEL SO THAT THE BABY IS NOT THROWN OUT WITH THE BATH WATER AND LONG TERM WINNERS HAVING A […]

December 30, 2008 0 Comments
Problem Isn’t Consumer Demand
Policy Perspective

Problem Isn’t Consumer Demand

The primary problem at this juncture is not the lack of consumer demand, but the lack of funds desperately needed by companies to stay afloat on a week to week basis. This, if not addressed soon, will cause corporate collapses, leading to job losses and business associates collapsing, leading to more job losses, and a shattered faith in the economy. Typical stories around us today are of companies that have over leveraged themselves and expanded aggressively in the past few years; and who have, until recently, diverted cash flows to fund even more aggressive expansion. The implicit assumption they made was that further equity and/or debt would be available on call; the question was never about its availability, but only about its price. Part of the reason for the aggressive expansion was the valuation payoff that several of them, especially not-yet-listed companies, assumed that they would get. Part of the […]

December 10, 2008 0 Comments
Spotlight On Rural Consumers
Consumer Trends

Spotlight On Rural Consumers

Marketers need to change their mental models of the nature of village economy and rural consumers By Rama Bijapurkar & Rajesh Shukla Consumer demand in India is the aggregate of the demand of several mini-consumer Indias, each with its own distinctive demand pattern, its own degree of exposure to different environmental forces and its own response to these forces. And like a kaleidoscope, with every jerk, the pieces regroup, and a new picture emerges. With the most recent and very sharp jerk, the new picture of consumer demand seems to be one in which rural India is far more dominant than it has been in these past few years of strong urban volume and value growth. The glimmer of a rural silver lining to the dark clouds of reduced urban consumer spending is caused by several factors: a good monsoon, relative insulation from the gyrations of the stock market, the […]

December 4, 2008 0 Comments
Reflections On The Night Of Terror
India My Land

Reflections On The Night Of Terror

It was sheer luck, providence, kismet, that some of us live to tell this tale, while many of us were not so lucky at all. The pain on the faces of their loved ones is devastating for all of us watching – a pain that seems to come all too frequently nowadays. While television stations are going up the learning curve with each such episode, the Government seems to have not learnt at all. Not even learnt that we need a different Home Minister, someone better equipped to do such a big, important, and complex job. These past few days, as we weep with the victim’s families, and listen in horror to friends tell of watching people being killed in front of their eyes, my mind has been screaming, “It is NOT the economy, stupid”. Who cares where the Sensex is, when we have senselessness all around us. Who cares […]

December 1, 2008 0 Comments
Iim All Yours
C'est La Vie

Iim All Yours

The Bhargava Committee Report: A Leap Backwards (PART II) How the Bhargava Committee Report surrenders all significant control to the government After the emasculation of the IIMs through two tier board control and a careful process of selection of the “right” board members, comes the bit about the “co-ordination” that the pan IIM super board will do amongst the IIMs, bringing them all down to the lowest common denominator. The report preaches the doctrine of ‘sameness’ across all IIMs, ignoring the idea that strategically, differentiation is what makes the larger IIMs collectively more competitive. IIM C chose a more analytical, quantitative orientation while, IIM A, pursued a more generalist program, inspired by its original collaborator, Harvard Business School. IIM B has gone the functional and sector specialization route. In recent times, IIMA has chosen to launch a one year executive MBA and a one year program for policy makers and […]

November 22, 2008 0 Comments
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