The Hindu Business Line : Quo vadis, consumerism?

India has a reputation for being traditionbound,but it has really become a noveltydriven,deal-seeking society, likely to go theway of the extreme consumerism in the West,culminating in grim consequences.

TRAVELLING abroad in the so-called advanced economies one can pick up the weak signals of consumer behaviour before they are magnified, if only one's antennae are tuned carefully, and use them as warnings of problems and dilemmas that we too would soon have to contend with. To take but one example, the Indian housewife is now reputedly blessed with far greater choices of all the good things and comforts of life, which, thanks to freely available consumer credit, are within reach of even the middle- and lower middle-classes.

The problem in the West, however, is too much choice. It is far too easy to bring out the plastic and go shopping. For some, retail therapy is an almost addictive way of filling the inner emptiness of a dreary and lonely metropolitan life. For example, the British are spending more with their credit cards than the rest of Europe put together, an amazing statistic reported in an article in the Intelligent Life section of The Economist Web site. With 64 million pieces of plastic in circulation, more than one for every man, woman and child, the British alone spent more than £120 billion ($215 billion) last year on credit card purchases. The increase across Europe has been 76 per cent since 1998, while real economic growth numbers have been barely in positive territory.

When it comes to acquisitive tendencies, clearly the Indian consumer is moving in the same direction as her American or European counterpart. Despite all the talk of our being a highly tradition-bound society, every marketing professional has had to discover the opposite: that we are also an experimenting, novelty-driven, deal-seeking society - especially if it is linked with what is technologically the latest, modern and fits in with an "I-me-mine" orientation.

All we need to do is to look at the rate of spread of computer literacy, the use of e-mail, blue jeans, inane TV programming - fashion and chat shows, quiz programmes and song and dance across all channels, growth of mobile phones, motorcycles, packaged food, soft drinks, in short, every branded artefact of the Great American Dream. New brands are being tried out as they appear and dropped just as readily.

Until some six years ago, this was not true of anything that meant an investment of, say, over Rs 5,000. Today, two more important developments have enabled the consumer to adopt almost the same attitude to the durables as to soft goods: one, consumer credit on instalment purchases, enabling one to see an investment of Rs 40,000 as Rs 1,500 a month; and two, the easy access to a second-hand market for trade-ins as well as sale through a broker trade. Therefore, the real costs of owning a car today to a person with a steady income are basically the difference between the purchase price and the resale price, which in turn is expressed as a monthly instalment! The only issue is whether he can afford to spare the EMI from his income.

It is no wonder that the manufacturers themselves are finding it an essential part of their business strategy to encourage trading in, often as a sales promotion device, in order to obtain new consumers from competition as well as to retain their own old consumers. What better way to do this than to support and deal directly in what used to be looked down upon in the old days as the "second-hand market"?

The gap between two successive launches in any household durable category has narrowed from several years to a few months. Since the mid-Nineties, the number of new products and models launched has grown every year. The proportion of the sales of the new models in the total sales by the industry has also grown and there is no let-up in the trend.

What is even more disturbing is that in their keenness to establish their brands for a longish life, every marketer is trying to woo and lure the young. More and more models in TV ads are kindergarten kids, or pre-teens. Get them hooked on a brand while in school - so runs the argument - and you have them as converts and ambassadors for far longer, so that the lifetime costs of marketing to the consumer is bound to go down. Instead, if you concentrated on say, the over-30 age group, you would have to plan to switch to a younger age group sooner or later, unless you want the brand itself to age along with its core users.

India's baby-boomers born as midnight's children, who were at the heart of the consumer product boom till around the Nineties, when they were economically and socially the most active, will soon start fading out, however reluctantly. They would give way to the much larger numbers of the generation who grew up (so to speak) with Indira Gandhi as much a history book figure as Mahatma Gandhi! Seeing this trend, the clever marketers will keep trying to aim their brands at younger and younger consumers, as an insurance against the aging of their businesses. "So what's the problem with that?" I hear some readers ask. It all seems fun and games just now to a recently liberated population.

The party, alas, is over all too soon. In India, credit cards and mobile phones have grown at breakneck speed in the past five years; and credit for two-wheelers and cars, housing and higher education has become fairly easy by our own past standards, although the actual interest rates paid are often deceptive and hidden. The borrower wakes up only too late to the fact that the actual cost is considerably more than what a cursory reading of the advertisements would have you believe. At times, in the Western world, things are ordered off a catalogue because they seem like a good deal at the time and not because of any real need. Conspicuous consumption, in other words, is almost always accompanied by hidden waste, in garages and lofts of suburban homes.

Unfortunately, in India the burden of the excesses will fall on the parents almost exclusively because the notion of the 18-year-old being financially independent is far from the norm here. The risks are not just of over-commitment of one's future income-flows, taking needless risks, but also of bankruptcies, crime and worse among the young. All these have been seen in the affluent societies already where teenage girls spend unearned (and even stolen) money on expensive hairdos and make-up just because of peer pressure and young men splurge on weekends as if there's no tomorrow.

What is more, reckless and excessive consumption seems to have given an added fillip to the fashionable disease of the affluent, which is depression, a name given to a number of symptoms that basically make a person feel lethargic, unhappy and unmotivated. At its extreme, of course, it can lead to anti-social withdrawal and even suicidal tendencies.

As the author of the article cited above has warned, a new term has been coined to describe the effects associated with buying. He says "we have to beware that whether we're buying the newest techno gizmo, the latest designer fashion or even the trendiest lawn mower for our country cottage, we don't suffer from PPD (post-purchase depression)." In other words, once we have gone past that delicious high of the shopping, choice and acquisition, we are likely to face the anti-climax, a downer of unpacking and adding to the numerous possessions in our homes, starting with not knowing where to fit the latest music system or lawn mower or digital camera where it is both safe and accessible, quite apart from making sense of the pages of small print that tell you in several languages what you should do with the gadget to make it perform all its functions.

And then there are the social costs of the waste disposal, shifting the junk from the packaging to where it could be carted away, reused or recycled - all of which demands a far greater level of community responsibility than we seem to have. The prospects of increasing consumerism therefore are indeed grim.

(The writer has been an observer of markets, students and organisations for over 35 years.)

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