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Why are car sales zooming? Here’s an explanation. Because it is only the rich who buy cars – car penetration is a bit over 20% in the topmost quintile of Consumer India (i.e. the richest 20% of India), and 5% or less in the remaining quintiles. Car sales also come out of corporate pockets as much as out of consumer pockets in this segment of income. and Rich India is actually back to feeling comfortable – the stock market is back up again, and everyone is feeling secure looking at their NAVs climbing back. Banks are lending for car purchases again, corporate profits have been very good and tax planning time is near The economic typhoon seems to have mildly hit and then gone away, adding to an increase in level of this consumer’s confidence. Pragmatic consumption is back again, and a new car with a bank loan is a […]
An earlier set of columns discussed how India changes in insidious and tricky ways: it morphs, slowly changing from within, and keeps reshaping itself just like an amoeba. With each bit of outside matter it ingests, it changes shape a wee bit and, before you notice it, there is a whole new shape. The last column reflected on what modern Indian goods and services were looking like. This one is about consumer insights gleaned from a trip through Uttaranchal to Badrinath-Kedarnath, and one to Kolkata and Jamshedpur. The realisation from the Uttaranchal trip was that religiosity, cell phones and Maggi Noodles are three things that hold modern India together. Since the latter two are not part of our ancient heritage, we can heave a sigh of relief that we are evolving and not stuck in the past! The Kolkata-Jamshedpur trip had flight cancellations on account of an airline expanding too […]
While consultants and companies advise investing in India based on the current and projected size of the middle class, the bogey of the definition and sizing of the middle class hasn’t gone away, says Rama Bijapurkar B2C business in India continue to struggle with defining target markets based on the most logical measure – household income. Every meeting we go to, the target market definition, based on which market potential is calculated and business plans are drawn up, is either hotly debated or accepted with a sceptical shrug of the shoulders by some people in the audience. The definition is based on some income band per households per month or year, and this income band neither makes blindingly obvious sense nor is it standardised across data bases. People have their own definition and they qualify this with labels like high / rich / middle / lower middle or labels like […]
A recent trip from Delhi to Rishikesh on the Shatabdi was a “eureka” moment. The Shatabdi is definitely the perfect metaphor for the middle class. Santosh Desai of Future Brands wrote once that the autoricksha is a metaphor for India. It can weave its way in and out of utter confusion, is ugly, noisy and inconvenient, but it serves the purpose quite well, at an incredible low price. Unlike an amusing bumper sticker on a Volkswagen that said “when I grow up, i will become a Mercedes”. the autoricksha will not grow up to become a car. It will – and is – becoming a much better autoricksha. But after seeing the Shatabdi, the thought occurs that the autoricksha may be a metaphor for the lower SEC (Socio economic class) C and D Urban India (roughly the second and third income quartiles of urban India); but the Shatabdi is definitely […]
“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 […]
“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 […]
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 […]
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 […]
Consumer demand is now no longer about undesirable habits of rich folk but about driving GDP growth. Being morally purified, it now attracts a great deal of discussion and analysis, especially as we run up to another budget, a key theme of which is about stimulating consumption. Yet most of the discussion and analyses are totally supply sided and product-centric and obsessed with WHAT is being spent on, rather than on WHO is spending and how they decide to. Consumer demand is about how much people choose to spend, on what their consumption ability, aspiration and priorities are, in turn determined by their world view and life stage and socio cultural group. It is therefore simplistic to think about stimulating consumption in terms of spread sheet projections of past sales trends, suggesting how much excise duty to cut on what product categories or about cutting income tax (given that most […]
