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As India shops like never before…

Vinay Kamath | Updated on January 10, 2014

LF10CONSUMERA

Rama Bijapurkar, market strategist and consumer economist - P.V. Sivakumar

“Who has got a mega-business right out of an opportunity; after HUL’s Fair & Lovely, no one.” Rama Bijapurkar, author of A Never-Before World

Neither multinationals nor Indian entrepreneurs are spotting the real business opportunities out there.



So, we are in the middle of the great Indian consumer boom, right? Where rapacious consumers are gobbling up all manner of gizmos and services thrown at them? Malls are overflowing and food courts are spilling over with the pizza-guzzling and pasta-slurping middle class. Among the largest markets for two-wheelers and mobile phones, or TVs and shampoos, India is well on its way to being the big brand economy, never mind that its urban agglomerations woefully lack all manner of public services.

Or, as author, sought-after market strategist and thought leader Rama Bijapurkar says in her new book, A Never-Before World (Portfolio/ Penguin), “With market sizes tripling over the next five years and armies of new so-called middle class consumers stoking the consumption engine, the forecasts for the future are enticing and dazzling. Emerging markets are tipped to elbow out the old order and catapult themselves into the list of ‘top ten’ or ‘top five’ markets in the world … it’s the kind of heady oxygen that struggling-for-growth, developed market companies are gasping for.”

That also means that all manner of multinational corporations are hotfooting it to get a slice of the action in the Indian market, with products and strategies to retrofit the Indian consumer into their ideal of a developed world consumer. The implicit assumption, she says, is that there is some “final end state of modernity in terms of how people live, what their priorities are and how they choose to fulfil their needs; and that this has already been established, perhaps in America, and eventually all emerging markets in the world will get there.”

But, hang on, she says in a conversation with Weekend Life. Sure, MNCs are coming in droves, and competing with some smart Indian companies as well, for a share of the Indian consumer’s wallet. “But, the consumption journey in some sense is yet to begin. The dharma of business is to cater to the needs of consumers to improve their lives and create value for them and extract value from them.”

Neither the MNCs nor Indian entrepreneurs are spotting the real business opportunities out there that will make life easier for Indian consumers and build up the business. The Indian consumer is a complex beast and the evolving market even more so. Which brings us to the leitmotif of her book — purveyors of goods and services are operating in a ‘never-before’ world “…. never before have we seen so many consumers, mostly with modest incomes, mostly young, subjected to so much tech in the after-Internet, after-cell phones era, living in an age of optimism that comes from having had their real incomes consistently growing, sometimes fourfold in just one generation …” And, one would be making a big mistake by applying a uniform yardstick to Indian society, which is seeing creeping change, Rama points out.

Why don’t companies look at developing products that solve ‘real’ Indian problems rather than force-fit those developed by a ‘global’ R&D programme, she asks. Here are a few suggestions she makes in her book for potential blockbuster products, laughing heartily to the suggestion that MNCs pay her royalty for them:

Televisions with inverters built into them, which will allow viewers to watch their favourite programmes even during a power cut;

Disinfectant doormats which can disinfect shoe soles, given our dirty roads;

Cheap, biodegradable, deodorising, disintegrating diapers;

Battery-operated kitchen mixies; “housewives know all too well about the stress when the power goes off before the masala is ground”.

Deodorants for clothes (not bodies) that do not spray perfume, but remove odour and do not harm the fabric; “most employers will probably gladly pay for these, given the lethal combination of closed, air-con offices with open plan seating and summer sweat”!

Low-priced refrigerator-size cooling boxes for storing vegetables;

…the list goes on.

So marketers are celebrating consumption in terms of how many two-wheelers and cars we are selling. But take the situation last year of rising tomato and onion prices. “With food inflation, consumers are not saying they are wedded to fresh produce; and if it’s not great quality at such high prices for onions and tomatoes, they’ll seek better value. You would imagine that someone would have spotted this opportunity, and created a vibrant market for packaged, processed food. In America, there is a packaged solution for every little thing imaginable,” she explains. Food inflation, she avers, is here to stay, so it’s a permanent opportunity.



The point she makes emphatically is that MNCs cannot serve up same old products with some tinkering for what they think is a new market. She cites the example of 3M, one of the world’s most innovative companies. It launched the Scotch-Brite floor cloth, which it said was made of cotton, had a strong weave and lasted longer. “It is disappointing that 3M did not say to itself that Indians need a host of cleaning solutions that have to be innovated; incomes are rising, women are getting less ‘sat upon’; the better floor cloth doesn’t solve the basic problem for women — hired help or housewife, both are evolving — that in the 21st century, women are still scrubbing floors on their hands and knees. Is this the best they could have done to lead the market? Given the need for regular dusting and how hateful women find it, couldn’t they have innovated something in that area?” she asks in her book.

Indian companies, too, are not coming up with ‘real’ solutions. The smaller entrepreneurs are doing better, she tells us. “On the pavement or on the trains, you can see interesting stuff for everyday use, but no scale. There is a lot of vibrant innovation pieces, but who has got a mega-business right out of an opportunity; after HUL’s Fair & Lovely, no one. The small sweetmeat stalls are doing a lot of innovations — giving me sugar-free gulab jamuns, but who is really offering sugar-free chocolates? How many big brands are offering them? I haven’t seen much consumer insight coming out of the big companies.”

To Rama, the ‘holy trinity’ of brands that came up with exclusive ‘made for India’ products are Nirma, Nano and Nokia. “Okay, two have retired hurt, but will come back; they have managed to get the price and performance points right. Nokia proved that for a low price you can have a language keyboard, a slim and good-looking phone, and you can have a lot more features,” she explains.

So what has changed about the Indian consumer and what has remained static, I ask her. What has changed significantly is that the ‘monster’ consumer “has become more monstrous than ever before. They’ve seen the prices of everything come down while quality has gone up. Think about airlines, cell phones, clothes, things available on pavements to laptops, prices of which have all come down. So, they are expecting more now. This is all going to come back and bite us. Consumers are now grumbling and saying, ‘I expect all this and I expect it cheap and how can you not give it to me?’ Suppliers have also cut prices and bet on volumes, they’re betting on the future.”

What hasn’t changed is doing old things in new ways. Like watching a puja long-distance on the Web. “All that will continue in a timeless sort of way,” she says. Clearly, in Rama’s book, the Indian consumer is evolving in his own, unique way and those who can figure out this complex beast stand to make the most gains.

Pictures: The Hindu Photos

Published on January 09, 2014

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