Indianomics 2012 for marketers

India continues to be a land of glorious opportunities for marketers. Despite the relatively subdued economic environment in which this year has begun, our nation continues to surprise us with large, new pockets of consumer activity. Many of these emerging areas are fascinating and hold huge potential, yet they are only now slowly leaching into the topsoil of our marketing gardens.

The large growth canvases provided by our metros, by young India, or by Indian women consumers are already well-known, so these are not the subject of discussion here. On the other hand, this article examines big new areas that have not yet captured similar mindshare or urgency amongst the marketing fraternity. Here are four such exciting themes that should be an essential part of every Indianomics 2012 crash-course for marketers.

Middle India

For several years, Indian brands have invested most of their energies on two sets of geographical clusters: the large metros, such as Delhi, Mumbai and Bangalore; and rural India, with its limitless expanse. However, as the Nielsen Company has highlighted in an excellent report published in December 2011, the vastly underrated opportunity of the next few years is neither in the metros nor in rural India, but in what is termed “Middle India”.

Middle India is composed of around 400 towns, each with a population of between 1 lakh and 1 million people. Typical Middle India towns include Nalgonda, Hajipur, Bharuch, Bijapur, Rajapalayam, Jalna, Tonk and Serampore. Many of these names are not on the top of marketers' lists today, but some of Nielsen's well researched facts about Middle India will make them jump up instantly and take notice. Middle India has handsomely outpaced the all-India growth story over the past few years, with the FMCG sector in these towns growing by 3.5 times since 2002. Over 100 million Indians live in Middle India, and Nielsen estimates that by 2026, the FMCG market alone in these towns will be worth a colossal Rs 4 trillion. The per capita consumption of FMCG products in these 400 towns stood at Rs 2,800 versus the all-India number which is just under Rs 1,200, thus demonstrating the unprecedented purchasing power of modern Middle India. In each of these Middle India towns, more than 250 new stores selling FMCG products were added during the last three years, which re-emphasises how rapidly these markets are growing.

Marketers who wish to tap into the Middle India Gold Rush will, therefore, need to understand with urgency the consumer aspirations in these towns, and also develop the best methods of doing business in these areas, notwithstanding some infrastructure bottlenecks.

Digital India

India is fast approaching the digital tipping point. Over 120 million Indians have access to the Internet today, more than twice the number three years ago. Active Internet usage in the country stands at over 65 million people. Over 40 million Indians can browse the Internet through their mobile phones, which provides virtually seamless day-long access. A recent research report (‘India Online Landscape 2011', published by JuxtConsult) points out that over four out of five Indian Internet users “shop” online — either search or buy online — translating into a 50-million-strong online consumer base.

To these exciting statistics, add the millions of Indian fans on Facebook and such sites, who are online for nearly 45 minutes each day. Then, add the thousands of mobile smartphone “apps” which permit brands and retailers to reach out to increasingly large numbers of Indian consumers who own high-end handsets, in multiple, impactful ways. Also, add on the fact that India has a very high online gaming rate: at 54 per cent, just behind China's 55 per cent. Finally, consider that by 2015, India will have nearly 250 million Internet users, with a disproportionate number of them young and willing to experiment. If you are still sceptical, take note that Kolaveri Di reached more than 20 million Indians and became an unbelievable hit within a few days, using the power of online media.

No wonder the Boston Consulting Group, in its report titled The Internet's New Billion , says that the digital revolution in India is now for real. The report goes on to say that the next few years will make apparent which brands have grasped how to leverage online relationships brilliantly to influence a new generation of digital consumers. The digital playing field in India has grown by leaps and bounds, but the pioneering opportunity lies in the fact that it is yet to be fully established. This is indeed the year for brands to make their big digital moves, rather than consider digital media as a “nice-to-do” afterthought to the marketing mainstream.

Green India

Many of us have often thought that ‘Green India', where consumers are motivated by consciousness for the environment, is still many years away. How terribly wrong we are likely to be! The 2011 Green Brands Global Survey, conducted with 9,000 consumers across eight countries, shows that 64 per cent of Indian consumers plan to spend more on green products during the year ahead. Equally significantly, nearly 48 per cent of Indian consumers said they are willing to spend up to 10 per cent more on a product simply because it is green. Fifty-seven per cent of Indian consumers said they would be influenced by TV advertisements to buy green; 28 per cent of Indian consumers in the survey expressed their intent to purchase a green automobile during 2012, compared to 16 per cent who bought automobiles they perceived to be green during the previous year.

These are compelling figures, and even if you allow for some inaccuracy or exaggeration, they should make us sit up and take immediate, serious notice of Green India. With Indian consumers showing such a clear inclination towards green products, what are the efforts being taken by marketers to create green products, and to put in place a marketing strategy that showcases the green in products? Also, consumers seeking environment-friendly products look for proper labelling that indicates the “greenness” of the product, whether it be a wristwatch or a television set or a car, since they are unable to gauge the actual green value themselves.

If Indian marketers do not work on getting their green act right very soon, they will certainly lose the valuable first-mover advantage in their respective product markets, and they may miss the bus altogether thereafter.

Made in India

Over the past few years, Indian brands in many categories have relied on products manufactured in South-East Asian countries, particularly China. That tide is now turning, and ‘Made in India' is a theme that will become very important in the months and years ahead.

The tide is turning for several reasons. China, gigantic and tireless manufacturer to the world, is witnessing several adverse trends. These include wage inflation of 15 to 20 per cent each year, an ageing workforce driven by the one-child policy, energy shortages, the urgent need to stimulate domestic Chinese demand rather than focus on exports, and the steady appreciation of the Chinese currency. Other countries in South-East Asia are also witnessing some of these concerns. Japan and Europe are gripped by deep crises which are likely to have a sharp impact on their manufacturing industries, at least in several zones.

On the other hand, product development and manufacturing in India is surely coming of age. Several ‘Made in India' products are world-class across diverse categories — among them Tata Ace vehicles, VIP bags, Bajaj motorbikes, Titan watches (where I work), Kingfisher beer and Amrut Single Malt. These Indian products are very well engineered and designed, superbly crafted and adhere to excellent standards of quality.

When all these factors are read in conjunction, it is clear that Indian consumer marketing companies will be well advised to begin focusing on ‘Made in India' products. Since the lead-times involved in manufacturing investments are often high, the time to start is now.

Harish Bhat is Chief Operating Officer — Watches and Accessories, Titan Industries Ltd. These are his personal views.

COMMENT NOW