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The Indian consumer has always been extremely value-conscious. When I started my career in 1984, I was posted in Kanpur, an extremely price-sensitive market in Uttar Pradesh. I was marketing Onida televisions, then among the most expensive televisions available in the market. However, just 8-9 months after launch the brand had become the most sought after TV set in the Kanpur market, particularly during marriages. Most dowry lists had Hero Motorcycles and Onida TVs on the top of the list.
Now, three decades later, the Indian consumer has perhaps moved to the opposite pole. There is a lot of irrelevant buying that we saw from consumers during this Diwali. Probably driven by great deals on offer, one heard of consumers who had no plan to shop for a single mobile phone ending up with as many as six phones – because they got them at a great price. There was another set of consumers who replaced their television sets, microwaves and mixers instead of looking at buying newer categories of durables.
The difference between the past and now is that earlier even price-sensitive consumers bought expensive durables so that they could last for a lifetime. Now they want to buy even 50-inch TVs at the cheapest price possible. That’s because they want to get rid of it over the next three years as technological changes are happening faster. Another reason is that customer service in India is very bad. So no customer wants to be trapped with a durable that is ageing.
The other trend that is taking place is that exclusivity is gone. Now even designer wear is available through the online marketplace in sites such as Snapdeal. Of course, consumers will lap it up.
However, online retailers who are addicted to the lowest price game must realise that it’s like drug abuse. You cannot sustain the high forever and it will destroy the systems internally. Even investors must realise that it will result in value destruction over a period of time. A case in point is the tablet computing business. The industry has suffered damage because of the price perception game and is unable to come out of it. The low-price-everyday cannot be sustained and manufacturers and brand owners will suffer irreparable damage in the long run.
As told to Prasad Sangameshwaran
(Rajeev Karwal is Founder and CEO, Milagrow Robots)
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