The Hindu Business Line : Get set for a bounty

As 2007 arrives, it is accompanied by its share of expectations for change and opportunities. And there is a fair bit of change in store for the Indian consumer this year. With India's consumer market steadily riding the country's economic boom, it is not surprising that the Indian consumer has been crowned king among the growing plethora of domestic and foreign brands vying for his attention.

Here is a look at the top few `consumer trends' which are likely to make a mark in the current year and attempt to garner a significant portion of your mindspace.

VROOMING AHEAD

Deciding which car to buy will be a more difficult task with a range of new cars set to hit the asphalt this year. And unlike the past year, most of these cars are going to be in the relatively affordable compact or mid-size segment. According to estimates, at least 20 new cars are set for launch in 2007.

The mid-size Mahindra Renault Logan is likely to enter the market in April-May. Its launch is much awaited, as, with a price tag of less than Rs 5 lakh, the car's launch is likely to affect sales of models in the mid-size and the premium compact segment.

There will be a flurry of small cars adding excitement to the market as well. General Motors is launching the Chevrolet Spark, the new avatar of the Daewoo Matiz of yesteryear. Hyundai Motor India will roll out a compact car positioned between the Santro and the Getz.

Maruti is launching the diesel variant of the premium compact car Swift. The company is also working on a compact car that will be exported as well as sold in the domestic market.

General Motors is also looking at rolling out a diesel variant of the Optra this year. "We are moving as per plans on the Chevrolet Spark which will be launched in the second quarter of 2007. We will also roll out the Optra diesel in the year. And the Captiva, a sports utility vehicles, could be launched around the third quarter of the year," says Rajeev Chaba, Managing Director, General Motors India.

There will also be a range of new cars racing in the premium segment. Volkswagen will begin assembling the sedan Passat (expected to be priced between Rs 25 lakh and Rs 30 lakh) and launch it around the middle of the current year.

BMW too will start selling its range of luxury cars assembled at its upcoming assembly unit in Tamil Nadu. The company will sell the 3 series, 5 series and the 7 series.

Fiat has also said that the first cars produced under its joint venture with Tata Motors will roll out in early 2007. Trial runs have already begun on the Palio and Adventure models and Fiat will also introduce the Grande Punto in the compact range and the Linea for the mid-size range. Not to be left behind, the increasingly competitive two-wheeler category will also see a fair bit of action. As many as 60 new bike models are lined up for launch in the next calendar year by new and existing players alike as they seek to consolidate their position in the fast growing domestic motorcycle market. A flurry of electric bikes will also be launched this year. New players including Ultra Motor, Electrotherm, Avon Cycles, KEV India, Kaiser Auto Moto and Standard Group will get aggressive with product launches in the year.

RETAIL BOOM

If choosing which car to buy seems an uphill task, you will be spoilt for choice when it comes to your routine shopping as well. While Bharti-Wal-Mart is still fine-tuning its retail foray, almost every domestic retail chain is set to aggressively expand its presence in the coming year.

Analysts say that Reliance Retail, which has plans to roll out 5,000 stores across the country, will go into aggressive mode this year and take advantage of its one-year head start over Bharti-Wal-Mart. The company is believed to be targeting 67 cities by June 2007. This is through various formats including hypermarkets, and convenience stores. Its first hypermarket is likely to be opened in February.

Another home-grown player, Subhiksha, plans expanding its network to 1,000 stores. The company is following a regional strategy which entails rapid localised expansion. For instance, it will be opening 100 stores in Mumbai alone in January.

Pantaloon targets setting up 100 Big Bazaars by December 2007. The RPG group has plans to open about 40 stores in the next two months. And this is just an indication of things to come as retailers gear up to face competition from Bharti-Wal-Mart.

New players will come into the market as well. These include heavyweights such as the Aditya Birla Group, which is likely to embark on its retail foray by the third quarter of the current year.

LUXURY MARKETING COMING OF AGE

The past year saw a number of luxury players enter the Indian market. But it seems the trickle is likely to become a flood soon with a rapid rise in the number of high-end shopping malls where these brands can be retailed. In a recent interview, Jean-Christophe Babin, President & CEO of Tag Heuer (which is part of the world's largest luxury group, LVMH), said that the lack of a "luxury retail environment" was seen as a deterrent by luxury brands interested in India.

However, this is no longer being seen as a constraint with several luxury malls coming up in the next year. In fact, seeing the interest of the large number of luxury brands in the Indian market, newer players are set to develop this space. Shoppers' Stop is planning to enter the luxury retail segment with large format properties and is believed to have firmed up space for the same in three metros.

A significant number of luxury brands have charted out an Indian entry in 2007.

The S. Kumars Group is planning to set up outlets for two new brands - Escada and Dunhill - in the next couple of months. The number of outlets will be subsequently scaled up. The Murjani group is set to bring in Gucci by mid-2007. The group will also bring in well-known shoe brand Jimmy Choo this year, starting with an outlet in Mumbai, followed by another one in Delhi.

Industry watchers say other high-end brands set to enter the Indian market this year include Calvin Klein, FCUK, Tumi, Jean Paul Gaultier and Escada.

And the attraction? According to a Technopak study, there are 16 lakh homes in India with an annual income of over Rs 45 lakh, and this is expected to grow at 14 per cent. These homes spend at least Rs 4 lakh on premium and luxury products and services per annum.

CHINESE BRANDS. FINALLY?

Chinese brands finally seem to be all set to leap into the Indian market in 2007. In the two-wheeler segment, the Guangzhou Motor Company recently signed a technology partnership pact with Kolkata-based Xenitis Group to launch its bikes in India early this year.

Another Chinese motorcycle manufacturer Zongshen Motorcycle Company has tied up with the Salim Group for its two-wheeler project in West Bengal, with the bikes set for launch in 2007.Two Chinese firms - Lifan and Loncin - have been scouting for an Indian partner to set up their operations here.

Chinese consumer electronics firm TCL is also set to up the ante in the current year by increasing visibility and launching more products. The company will also set up two units in India in the year.

It now remains to be seen, though, whether the Chinese gambit works this time around!

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Get set for a bounty