India: Understanding the Process of Change

The Economic Times - October, 1999

Corporate India has been acutely aware that they must keep a close watch on their marketplace, since change is in the air. Yet, despite constantly being on the look out, many companies have been caught unawares by the changes that actually happen in their market place. Every time they looked, it seemed like it was business as usual, and suddenly, one day, it became a totally different world, with dramatic shifts in market structure and definite changes in consumer behaviour, causing them to suddenly scramble and gear up, post facto. "When did we blink", is the question often asked, and the answer is never obvious.

Now, galvanised by millennium fever, there is redoubled effort to understand the nature and the distance of the journey Consumer India has made in the past decade, and to 'see' what the road ahead could look like. Most participants in such exercises have confessed that at the end of the exercise, they are teetering between confusion and frustration. And having been in this unhappy state often enough, I have been grappling with the nature of this "changing India" beast. And here's what I have come up with so far:

Many of us are looking for evidence of moulting change, where the old plumage is shed, often overnight, and the new one, all ready to wear, has replaced it. And when we examine markets and consumers with the "moulting" lenses, we end up being buffeted by the winds of "mixed verdict" and "continuity with change".

Mixed verdicts seem to be one hallmark of everything Indian, be it elections, markets and consumers, human development, nation pride and optimism or anything else that you choose to name. It is really hard to come to an unambiguous judgement on whether the news that we have is good or bad. Example: we have a coalition with a majority, and a winning single largest party with a decrease in vote share. Question: are we getting mature as a democracy or going the banana republic way? Do we have a parliament reflective of the people's mandate or the genius of someone's understanding of electoral arithmetic? Example: between 1996 and 2006, we will have the highest continuous growth in national income ever, yet less than 20% of Indian households will have enough spending power to qualify as mainstream consumers of normally priced consumer goods. However there are sharp reductions in poverty levels, bringing large numbers into the consuming fold for the first time, with limited consumption of low priced goods. Question: do we qualify in the world FDI sweepstakes of "attractive markets of the new millennium"? If we don't, have we missed the bus? Or is this the not so level playing field that Indian companies should rejoice about, where a special "made for India" business model can spin money if you know how to do it?

And if confused verdicts leading to difficult judgements are one hallmark of everything Indian, continuity with change, to use that hackneyed but fitting phrase, seems to be the other. Example: we are seeing the changed Indian polity of coalitions and regional parties. Yet, there is also the disturbing if not disgusting continuity of Gandhi dynasty worship by the electorate, both North and South. Example: Even in the top 8 metro cities in India, we see that ownership of cars is only 25%, and air conditioners 10% among the top most socio - economic class (SEC A). Yet in the top 23 urban centres, one out of two of the lowest SEC (SEC E) households has a television, one in three an audio system, and one in five has cooking gas and satellite TV access.

The truth is that the nature of change that is happening is one of morphing - slow but definite transformation from within. And that's how this creeping change, missed by the 'moulting' lenses, transforms markets without being noticed, despite being watched all the time. With 'morphing' lenses on, mixed verdicts and continuity with change are less bewildering, because the verdict is that the change process has begun and we need to morph our strategies and organisations along with it.

The kind of changes we should be looking for in markets and consumers are of the kind that one manager I know describes as, signs of a "tight fist loosening", and another desribes as the "critical mass generated by a large body of people changing a little bit". If force is mass multiplied by acceleration, what we should be looking for is changes in a lot of mass with a little bit of acceleration. When doing a millennium trends exercise, we should not be looking for the mega trends but for the creeping trends. The creeping rise in income is one clear trend. The creation, over time, of many oases and deserts of consumption as a result of sharp differences at the state level in philosophies, policies and performance is another. The rise of womanism (not the more overt aggressive feminism) is yet another. The slow morphing from a predominantly farmers and government servant consumer base to one with a large chunk of self employeds especially in service businesses dominate is happening. The blurring of boundaries between India and Bharat is yet another morphing change. The increase in literacy in every subsequent generation is one more. And so, here's one more lesson about the nature of the "changing India" beast. What is happening is a little bit of change on several dimensions, all occurring simultaneously, which collectively, over the medium term, changes the market and consumer landscape.

At an intuitive level, evidence that India is morphing is there in every facet of our lives - we are not eschewing faith in astrology altogether yet, but moving to computerised horoscope casting first. Women are not moving en masse to western apparel, but the salwar kameez is giving the sari a run for its money. And as the TV pundits say, the BJP is slowly getting "congressized"!