Back to school, PC in tow

Aditya Rao, a 14-year-old from Bangalore, entering the 10th standard, is ready to take on all the activity that comes with it: after-school tuitions, special classes on weekends and preparatory courses for the big exam three years later. Apart from the usual spend on stationery, rain-proof jackets, backpacks and school books, his parents, like other parents of children Aditya's age, have yielded to his demand for a mobile phone, two years after he got his desktop at home.

So, the ‘back to school' days are no longer about trudging to the nearest book store or the wholesale market for pens, pencils, erasers or diaries. It's about choosing one large retailer or another to make all school-related purchases. Year on year, not only is the list getting longer, it is also encompassing more tech-driven items. So, while branded backpacks and lunch boxes are still topping shopping lists and form a major chunk of the ‘school opening' shopping bills, several high-cost items such as desktops, laptops and cell phones are making an appearance on that list.

Retailers across the country have caught on that the ‘back to school' period is yet another high spending season and have creatively marketed their products. Ashutosh Chakradeo, Head (Buying, Merchandising and Supply Chain), Hypercity, says the May-June-July season sales at the retail chain are comparable to that of Diwali or Christmas. “Footfalls increase by almost 20 per cent during this season compared to other months,” he points out.

For retailers, hard statistics too look tempting: The Indian middle class, now at about 320 million, is likely to double to about 600 million people by 2025. The middle class is getting richer and investment towards education for oneself and children is only expected to grow significantly. Today, the average monthly expenditure on education would be anything between 10 and 12 per cent of the monthly household income.

Raghu Vishwanath, Managing Director of brand advisory firm Vertebrand, says, “This is one sector Indians do not shy away from spending on.” The growth rate is quite optimistic at about 20 per cent per annum with the market being pegged at over Rs 2 lakh crore. When the education sector is growing at over 20 per cent, all the affiliates attached to this are bound to increase at a similar pace or higher,” he argues.

The school stationery market alone contributes Rs 6,500 crore to this and is growing at a healthy 30 per cent per annum. Against this backdrop, a marketer dare not tell a child, ‘Sorry, we don't have it here,' quips Vishwanath. Zahir Abbas, Associate Director (Retail) of management consulting firm, Technopak, agrees: “Children are the future consumers and key influencers.” And when it comes to shopping for school or college, everything about it is official.

In this highly aspiration-driven market, school kids are more aware of new products too. “For them upward movement to big-ticket items is natural. There is big peer pressure too, to own such products and brands,” explains Abbas. The ‘mine is better' attitude is driving children to buy hi-tech products.

Dipak Marwah, Vice-President and Business Head, Reliance TimeOut & Head (Marketing & Customer Experience), Hamleys and Office Depot, says parents and children are buying a wider range, and more expensive products including those based on characters.

Although children do manage to use their pester power for brands in these categories, there is a subtle concurrence from parents too. “We find that even parents are enjoying the change from their back-to-school days. Shopping for school has moved from what used to be a chore to a fun-filled activity now,” says Sharad Dalmia, Co-founder and Co-CEO, Staples Future. Today's back-to-school shopping is a far cry from past scenes of mothers chugging to wholesale shops with large bags for bargain deals on pencil boxes and school bags. “It's important for brand managers to be clued in to the latest fads and trends and be creative all the time. Being seen at the right time and right place is very critical,” says Vertebrand's Vishwanath.

Therefore, spends on lunch boxes, water bottles, backpacks with familiar cartoon and TV characters are unquestioned. Apart from these, marketers are seeing a spurt in spending on entry-level desktops and mobile phones. “We find that eight-year-old kids are initiated into the usage of PCs or laptops at home and parents are willing to spend up to Rs 15,000 on these systems,” says Dalmia.

Abbas points out that that anything to do with digital, Internet and electronics is a big hit and a lot of gadgets are being sold nowadays. “Parents associate technology with smartness and status,” he says.

For a PC maker such as Dell, the student market is an important one in India, says P. Krishnakumar, Executive Director - Marketing, Consumer and SMB, Dell India. “In a country like India where about 40 per cent of the population is part of GenY or the school-going segment, there is tremendous scope for growth.”

Dell has a ‘Back2School' campaign that is geared towards encouraging schoolchildren to adopt technology and utilise its potential to explore and widen their scope of learning. The company's Inspiron line of desktops and notebooks, especially, has been designed keeping in mind GenY segments' preference for cool and fun products but are kept within the value bracket, with price points ranging from Rs 21,000 and Rs 41,000. The Back2School campaign was designed by Dell to appeal to a younger target audience and make going back to school fun and rewarding.

Chakradeo of Hypercity says that in the last two years, the retail chain is seeing a spurt in demand for tech-driven products such as laptops and mobile phones. He says there is about 15-20 per cent more demand for technology-driven products such as laptops, desktops and mobile phones in the 2-3 weeks during this season compared to other days. “The back-to-school market is targeted not just at school kids but at teenagers stepping into colleges campuses for the first time. Hence the demand for technology-focused products goes up during the season.”

Interestingly, parents do not see the desktop as a high-end product but as a central access point for connectivity for the whole family. “It also gives children the benefits of technology and parents peace of mind so that they can feel more secure and aware of their children's activity online,” says Krishnakumar. School shopping is going to see more changes in the years to come.

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