Indian consumers and the market
Business World - May 2006
Thus, 70 per cent of the Siddha class (literally, those who have succeeded in entering the upper classes) of 6 million households owns refrigerators, uses fabric whiteners, and has bank accounts; 50-70 per cent own motorised transport and have a telephone, and 30-50 per cent, surprisingly, eat noodles regularly! Over threefourths of Siddhas live in urban areas, 95 per cent of the housewives are literate and 30 per cent are graduates.
This does fit our mental image of the 'middle class', but for those who are disappointed that they account for just 3 per cent of all households, this is a call to reality. As Thomas Huxley once said, it is the slaying of a beautiful hypothesis (of a large middle class) by an ugly fact.
2. The Hierarchy of Durables: In urban India, the most ubiquitous entry products into households are the television and the pressure cooker- the entertainment and efficiency needs (see 'Hierarchy of Durables'). The pressure cooker, I think, badly needs a successor. Women and kitchens have changed, but the pressure cooker reigns supreme! The refrigerator, the two- wheeler and the telephone are the next lot of durables that urban households acquire. Then comes the washing machine. Here, the question to ponder over is: What would it take to take washing machines up to the refrigerator's level of importance? In rural India, the hierarchy is only slightly different. Rural India is serious about entertainment. The television and audio player are the entry-level durables, in that order, sharing honours with the pressure cooker. Two-wheelers and telephone are next.
In the forthcoming Businessworld Marketing Whitebook, in an article co-authored with Ashok Das of Hansa Research, we discuss the degree of evolution or sophistication of a category, defined as the ratio of high-end products' ownership in a category to the total ownership of it.
Even SEC A, which is topmost in urban India, is a not very sophisticated or evolved market - 61 per cent of the audio equipment is cassette- and not CDbased, 70 per cent of the refrigerators are non frost-free and 61 per cent of washing machines are semi-automatic. Clearly, we are going to see upgradation-driven value growths as soon as someone sets up easy and fair value buy back schemes for the existing durables population. Or reprogrammes the Indian mind to find another way of thinking "paisa vasool"!
3.Consumer demographics: The male-female ratio in the 12+ age group in Delhi is a shocking 55.4 vs 44.6 per cent. Compared to most of north India, the more enlightened south is a relief - The ratio here being exactly 50 - 50 per cent in Tamil Nadu and a pleasant 48-52 per cent in Kerala.
Our child centricity is with good reason too. Fifty per cent of the Indian households have a 5-12-year-old and 30 per cent have a teenager (16-19 years old). Why then do we have such small toys and books markets, and such a nonexistent youth culture except at the top 1 per cent of the market? Also, 40 per cent of households have 55-year-olds and above. Yet, the geriatric healthcare and fitness market is yet to seriously take off, despite a large body of customers having the same pain points (literally!).
Sixty-two per cent of Indian households are nuclear, even in the villages. Further, the stereotype of the modern housewife in our minds and our advertising needs to change. Even in urban India, over two-thirds of housewives have not finished school and only 12 per cent have college education. The rural picture is worse. The challenge is to bring modern ideas and behaviour to a community that is visually literate and exposed via television, very ambitious for its children and, I am willing to bet, ready to learn given the little formal opportunity they have had to do so. Maybe, and I'll bet on this too, the consumer's readiness to adopt new ideas is far ahead of the marketers' stereotype of her.
Now, to address the "working women percentage" guesswork that we all do. Seventyseven per cent of urban housewives and 60 per cent of rural housewives do not work outside the home. However the north-south divide is again very stark, with southern states having about 15 per cent more housewives than the average working outside the home.
4. Company Franchise: Between 2000 and 2005, Hindustan Lever and Colgate-Palmolive increased the number of Indian households they were present in, though their presence decreased in percentage terms. Nirma and Philips lost on both counts. Marico, Dabur, Parle, and surprise, surprise, the Tata group (tea, coffee, salt) increased on both counts. All things considered, there's no beating the scale of Hindustan Lever. It is present in 166 million of the total 207 million Indian homes, with Colgate-Palmolive coming a distant second at 85 million homes.
As a prominent business leader often says: "In God we trust. For the rest, bring data." Amen. |
