The Crisis of Supply
Demand Drivers

The Crisis of Supply

The confusing part about the Indian market is that the issues affecting its health and wealth shift suddenly, and we are often caught unawares. From the beginning of liberalization, consumer demand has been the number 1 problem issue for us. Not enough of it, not for the price – product configurations that the rest of the world buys, truant monsoon dependant rural demand, flighty urban demand because new categories emerged faster than income growths and a premature hype about the middle class leading to exaggerated expectations and over creation of capacity. India Inc. went from era 1 of euphoria in the first half of the 90s with the unleashing of pent up demand to era 2 of despair in the mid to late 90s with demand growth way below expectations and new capacities built with high cost borrowings. Then came era 3 in the late 90s and early 2000s, with […]

October 30, 2006 0 Comments
Indian Consumers And The Market
Demand Drivers

Indian Consumers And The Market

CONSUMER window data on markets is exceedingly useful, since it analyses markets as a collection of people who buy products, and not as a collection of products sold by a set of competitors. Unfortunately, such data is also difficult to come by. So, when such data comes along that is recent, nationally representative, low-priced and high-quality, my advice is to snap it up immediately! The Guide to Indian Markets 2006, by Hansa Research and Media Research Users Council is one such report, based on the Indian Readership Survey (IRS) of 2000 and 2005, an all-India study, with a large and rigorously designed and selected sample of about 1,65,000 households in urban India and about 75,000 in rural India. In each household, the housewife has been interviewed for details of household demographics, FMCG consumption, and ownership of durables, and a randomly selected adult, aged 12 years or above, interviewed for media habits. […]

May 1, 2006 0 Comments
Rural India: Myths and Realities
Demand Drivers

Rural India: Myths and Realities

The recently held CII Conference on Rural India was a wonderful stock taking on where Rural India stands as we speak. There was unanimity of opinion that it was far more advanced on most counts than is the general impression of it, in our minds. Even the development sector folk at the conference agreed that there was a new rural India that had a URAL – urbanized rural mind set (Dileep Ranjekar, Azim Premji Foundation) and was as avid consumer of microfinance for entrepreneurial ventures (Annie Dufflo, Micro Finance Institute). The NRS presentation made the point eloquently with data, that Rural India was not quite the dark continent, and had surprising amounts of consumption and media exposure. A few years ago, at a FICCI Conference, Ashok Das of HRG had made the case, using IRS data, that there was a ‘developed’ rural, not insubstantial in number, which had ‘close to […]

October 1, 2005 0 Comments
The Data Dilemma
Demand Drivers

The Data Dilemma

I have had an epiphany. The other day, we were at lunch – a senior Indian business leader, an erudite foreigner who advises CEOs all over the world on globalization, and yours truly. The debate was about the size of the Indian market. 50 million? 200 million? What income level qualifies people to be consumers? Black money, wrong income reporting, and data denial was on the menu. And that was just the starters. I had a feeling of deja vu. When will we ever break out of getting our knickers in a twist on data about India, and move to acceptance, understanding and insight? Can we accept that the data about India, especially Consumer India, is confusing and inconsistent in what it tells us? And that this is not because we lack a sophisticated understanding of complex data collection or interpretation, or because we can’t discriminate between dodgy data and […]

January 1, 2005 0 Comments
The Story of India: View through the “Stand Alone” Lens
Demand Drivers

The Story of India: View through the “Stand Alone” Lens

Everyone who has been on ‘marketing India’ road shows, especially in the West, cannot but help notice that while ‘India interest’ in the eyes of the world is increasing, India skepticism is not declining. Also familiar is that India gets less than its due, when balancing the good news and the bad news about it; while China gets more. The questions that get asked about India at the end of very well crafted, informative and sensible speeches from captains of industry or opinion leaders are always in the realm of “yes but…” I wonder if it is something to do with “aukaat” – the developed world feels that we should stay within our aukaat, and worry about our caste system, our perceived absence of civil society, our crimes against women etc, rather than stake our claim to the “who’s who’ of the new economic and hence political world order. But […]

July 1, 2004 0 Comments
Pain and Gain of Urban India
Demand Drivers

Pain and Gain of Urban India

There is no dearth of empirically valid, statistically sound and anecdotally familiar sales and survey data on what characteristics different types of markets in the country have, and how they have been behaving in terms of what and how they buy. Contradictions and counter intuitive findings abound, which we cannot explain away as data errors. “Tier two towns hold lots of potential – do you know that in Valparai, we sell more X YZ than in Hyderabad? And by the way Hyderabad is visibly wealthy”. “UP may be poor but we actually sell as much there as in Gujarat “. “Delhi is actually richer than Bombay, but Bombay has a different character”, “Bangalore and Hyderabad are both very happening markets, but frankly, I would place my bets on Hyderabad ; actually maybe on Bangalore; they are different but I can’t place my finger on it”; Bangalore is a better quality […]

May 1, 2004 0 Comments
Batting Blind: The Case of Household Income
Demand Drivers

Batting Blind: The Case of Household Income

It is a relief now to be able to confess that it has been very tough explaining to potential foreign investors how on Rs. 50,000 a year, a family of four can live, eat, educate children, and still buy consumer durables. Or how 60% of those with an income of Rs 10,000 to 12,000 per month have two wheelers and 25% have cars. It is also tough convincing MNC consulting firms that they should not be making forecasts on India applying their empirical data from other countries (e.g. the threshold level of income beyond which consumption “takes off “) to our income statistics. How have we been managing so far? Has the whole marketing community really been batting blind? Not quite blind. There are two popular sources of income data, NCAER’s MISH survey and ORG-MARG’s IRS survey. Both these surveys produce income data which is reliable (if you do it […]

August 24, 2012 0 Comments
A Consumer Centric Analysis of Market Growth
Demand Drivers

A Consumer Centric Analysis of Market Growth

An expanding bottom with a svelte top is obviously not the kind of figure that analysts and economy watchers like to see. And of course the one thing in short supply in most of the analyses and theories about the consumer goods slowdown is consumer level data. Understanding the dynamics of the demand slowdown and taking a point of view on whether it is temporary or long term requires consumer centric analysis of “who is buying (and how many such are there)” and “who has bought and who (and how many) are left to buy”. ‘Grassroots’ level insight will not come from “what is the trend of how much product has been sold in which pop strata” accounting analyses or from macro questions like “will a good monsoon revive consumer demand”. I want to illustrate this with just one example of some very basic consumer centric data taken from ORG […]

May 1, 2001 0 Comments
Prospects for the Consumer Goods Sector
Demand Drivers

Prospects for the Consumer Goods Sector

The FMCG sector slowdown that everyone is talking about needs to be viewed in perspective. Is it really a slowdown caused by a deteriorating economic condition, or is it merely the morning-after, after a particularly good night before? I think it is the latter – what we are seeing is the concluding chapter of phase 1 demand, dying gasp and all. The fundamentals of Consumer India seem fine. In fact, it seems like urban India, at least, is definitely headed for consumption ‘take off’ in the next five years. However there are corrections that are happening now which are tough. As one CEO said recently, there is no doubt that the long term looks good. The short term is the difficult bit. One thing is clear – the golden days of runaway growth are over and slower growth rates are a fact of life. We need to re adjust our […]

October 1, 2000 0 Comments
Is the Future Happening?
Demand Drivers

Is the Future Happening?

Is the Future Happening? The Economic Times – September 2000 The marketing of India as an investment destination is moving into high gear again. ‘Indian market opportunity ‘ has been a traditional pillar of our sales pitch, and over the years, we have moved from hype to hope and now, with eight years of post liberalisation market understanding, it’s time for review and realism. When we first started selling India in the early nineties, statistics about the affluence of the consumer base and the current market size were embarrassing. The sales pitches were perforce about ‘what can happen”, rather than “what it is now”, a picture painted about a huge ‘middle class’ consumer base hungry for products and services that they had been deprived of. The “suppressed demand” theory was soon proved wrong, and the sales pitch moved on to saying that over the years, as incomes grow and consumers […]

September 1, 2000 0 Comments
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