India is one country where all the laws of marketing perhaps fail. The reason is simple – it’s so diverse. If you have just one theory, then it will not take you anywhere. India changes every 200 kilometers. Yes, a few basics remain the same across India, but a lot changes too. For starters, language changes (we have 192 official languages & dialects), culture changes, traditions and festivals change, food habits change. If this is not enough, think about it – even the geography and political views change. Yes, it is vast, but it is not an easy market. Only the hardy marketers will be able to survive and thrive here.
While extreme, this opinion is not without basis! Some research into consumer buying habits also brings out some vital differences across India. For instance, the benchmark J.D. Power Asia Pacific India Escaped Shopper Study talks about how regional patterns affect purchases of vehicles across India. While exterior designing and style dominates in the North, the West looks for acquisition costs as well as total running costs. The South in comparison looks for
utility is extremely sensitive on price and even considers opinions of friends and family before taking a purchase decision.
An eBay India study showed that South Indians were the most active buyers at the site at 41% followed by West at 27%. North seems more skewed towards offline buying. Divisions in the zones also reflect in reading habits. The National Youth Readership Survey reveals that the southern region leads with 24% youth readers, followed by the West and East with 22%, the North with 13%, Central with 12% and North East with 7% readers. Besides, there is a definite distinction in terms of the kind of advertising. Milward Brown studied nearly a thousand advertisements across markets in India and concluded that only one in seven had a pan-Indian appeal.
Even a recent study titled Cross cultural comparison of buying behaviour in India, specifically maps culture to consumer behaviour in India. The study compares regional cultures of India by applying Hofstede’s model of cultural dimensions. The research considered states of Gujarat, Tamil Nadu, West Bengal and Punjab as West, South, East and North India respectively and found some significant differences in consumption patterns. Moreover, when it comes to a country like India “the estimated marginal budget shares, income and price elasticities show marked differences in consumption patterns of rural and urban consumers in the country” (Consumer behaviour in India: An application of the Rotterdam demand system by K. N. Murty). This clearly indicates that multinational looking to successfully capitalize on India’s impressive growth need to understand several driving attributes such as strong and distinct culture, population distribution, and local conditions, and risks that are indeed unique to this country.
Even greater today, when more marketers – both Indian and global – want a generous pie of India’s domestic consumption base of over $830 billion, which translated into 44.8% of the nation’s total GDP of $1.85 trillion at the end of 2012 (even ahead in percentage terms of China’s 32% consumption share out of a total GDP of $7.32 trillion). An exhaustive report by McKinsey also gives some important indications of where India could potentially be in the near future. It projects, with an assumed CAGR of 7.3%, that India would triple its income levels by 2025. That will bring around 291 million people out of poverty and the middle class will rise by 10 times over the period to around 500 million. What’s more, 23 million people would count among the wealthy, which would be more than Australia’s current population (around 22.7 million, Australian Bureau of Statistics). And the most exciting part, of course, is that the country has a combined young and working age population (14-60 years of age) that comprises nearly 54% of the total (UN figures). Another 31.3% are in the wings to enter this group (age 0-14 years). India’s working age population is expected to edge out China by 2028.
A lot of multinationals have come into India but failed – not because their products were not good, but because they failed to understand India’s culture and its consumers. Globalisation has been the new trend, but ‘standardisation’ will not work always. Thus, as a marketer, you need to be sensitive to each culture’s identities and its unique regional preferences and customise your product offerings. Besides, the post-1991 generation, which accounts for over 50% of India, is confronting traditional values as well as getting exposed to modern, global ways of living. However, not much research has been done on what kind of cultural orientations this youth market will display in the coming time and whether the diversity of previous generations will diminish or get stronger.
Thus, I have put in an effort towards understanding the Indian consumer’s (particularly the Indian youth) mindset, figuring out his buying motives and also getting a handle on what he/she is contemplating next and why. The next few pages following this cover lead attempt to collate and communicate some big takeaways on youth attitudes and behaviour from the survey spanning the 4Cs – Cars, Cellphones, Creams, and of course, Consumers.
CARS: TOO FAST, TOO FURIOUS
According to India Brand Equity Foundation (IBEF), “the Indian automotive industry has emerged as a ‘sunrise sector’ in the Indian economy.” With a CAGR of over of 15% during the last 5-7 years, the Indian automotive sector is being deemed as one of the fastest growing passenger car markets in the world. In fact, the contribution of this sector to India’s GDP has risen from 2.77% in 1992-93 to about 6% now, and it provides direct and indirect employment to over 13.1 million people (Government of India data, 2012).
Further, when it comes to the place of cars in contemporary youth culture “it is suggested that car use must be seen in the framework of sociability and networks and that it also critically and suggestively mediates ordinary consumption with imaginative possibilities” (study titled Consuming the car: anticipation, use and meaning in contemporary youth culture, published in The Sociological Review). Moreover, there is evidence (Culture’s Consequences on Consumer Behaviour, a study conducted by National University of Singapore’s researchers) that “the Indian youth primarily shop from a hedonic perspective and cars, particularly sports cars, are considered to be hedonic goods. This certainly makes cars an important product category when it comes to study the buying behaviour of youth across India. So, here are some interesting takeaways for car manufactures and dealers.
While the maintenance cost matters most to the young consumers in North East India, it’s not much of a concern for a North Indian Car buyer. Interestingly, the car buyers in North India are least bothered even when it comes to the fuel efficiency of the car. For youth in South India, factors such as dealer network and availability of easy finance/loan options are more important than consumers in rest of India when deciding on which car to buy. Factors like resale value and colour are taken into consideration the most by a North East Indian youth, while young consumers in West India pay minimum attention to these details when compared with rest of India. Interestingly, youth in North Central India pays maximum heed to the reviews in auto magazines before deciding which car to buy. This is indeed some big news for car manufacturers who are betting big on India.
CELLPHONES: IT’S ABOUT CONNECTING INDIA!
If numbers are anything to go by, the country’s mobile services industry has been the fastest growing mobile services market in the world, registering a CAGR of more than 50% in terms of subscribers and 15% in terms of gross revenues over the past decade (ICRA, 2012). While India’s total mobile connections are projected to exceed 900 million (to achieve 72% penetration) by 2016, total mobile services revenue in India is likely to cross $30 billion mark in 2016 (Gartner India, 2012). But this alone does not make it a lucrative category when it comes to study the buying behaviour of Indian consumers.
There is evidence (study titled “Mobile Handset Buying Behavior of Different Age and Gender Groups” published in International Journal of Business and Management) that “the mobile telecom services are now being widely consumed by the Indian society. Rather these have become an essential part of their lives. Besides communication, people now seek entertainment and other features that are compatible to their self-image and lifestyle.” So, if an Indian youth wants to buy a mobile handset – rest assured that he’s not totally dependent on that award-winning advertisement that is running on-air.
While youth in North East India are more concerned about the operating system (OS) of the cellphone they are buying than the youth in rest of India, the gaming capacity of a cellphone is of a much bigger concern to youth in North Central India. The brand name is of utmost importance to East Indians. They are more likely to go for a trusted brand than consumers in rest of India. While North Central Indians are more likely to go for a cellphone which has a camera, battery life of a cellphone is a big factor for consumers in East and North East India when it comes to buying one.
Interestingly, the youth in North East India seems to be more tech savvy than its counterparts in other regions across India. North East Indian consumers pay more heed to features like colour, GPS navigation, QWERTY keypad, operating system, social networking applications, and other apps than consumers in other regions across India when it comes to buying a cellphone. Even when it comes to the overall look/design of the cellphone, youth in North East India are far more demanding than their counterparts across rest of India.
Further, while South Indian consumers are more inclined towards dual SIM cellphones than consumers in other regions across India, presence of a service centre near to their place is of utmost importance to consumers in East India when buying a cellphone. Finally it’s the consumers in East India who pay more heed to the price than consumers in any other part of India when it comes to buying a cellphone.
CREAMS: FAIR ISN’T ALWAYS FAIR
India’s proactive FMCG market has seen a significant growth in the cosmetic market in last two decades and fairness cream accounts for a major part of the cosmetic market with an average growth rate of 20% per annum. ASSOCHAM has projected that the market size of cosmetics industry at Rs.200 billion by 2014 due to emergence of a young urban elite population with rising disposable incomes and increase in working women looking for lifestyle-oriented and luxury products. Confederation of Indian Industry (CII) too projects the industry growth between 15-20% per annum going forward. Moreover, there are research that suggest “the Indian cosmetic market and particularly the fairness cream market enjoy a good market growth as the Indians are obsessed to become fair and beautiful” (study titled Fair war: A case study on fairness cream, published in International Journal of Contemporary Business Studies).
No doubt it’s true, but here’s an eye-opener for marketers of creams and lotions. Contrary to the general belief, all Indians are not obsessed with fair skin. While skin lightening is an important ingredient in a cream for youth in North East, South, North and North Central India, for youth in West and East India, it’s just another ingredient in a cream. While the price matters most to North Central Indians when it comes to buying a cream, consumers in South India give more importance to the smell/fragrance when compared to rest of India. When it comes to packaging of a cosmetic product it’s the consumers in North East India who lead the pack. Interestingly, North Indian youth is least bothered when it comes to product availability. Further, while consumers in South India believe that high priced creams are always superior, for youth in West and North Central India this is not the case.
Thus, the writing on the wall is clear. If the big players want to retain their market share they have to increase their understanding of the local market and change their strategies fast. Instead of pushing a bulk of your marketing spends on buying TV spots and getting celebs on board, there is a need to study local cultures within India to keep alive the ever-wandering consumer interest in your brand. No doubt, India is diverse and difficult. But then, it has proven to be an apt training ground for its homegrown brands, to prepare themselves for the future. Those who have succeeded and survived here will be able to survive anywhere. After all, there is no place in the world like India!
