Banks and financial services remain India’s dominant sector. Just about everything else about brands and consumer appreciation of brands has changed in the past 10 years, or is in the throes of rapid change.
Ten years ago consumers shopped primarily for value. Value continues to be important, but people are willing to spend more. Greater wealth and changed attitudes about spending add price elasticity to many categories.
Indian brands have improved and moved toward the quality and offering of international brands. In cars, for example, with the exception of the luxury level, Indian brands compete with the international brands.
The growing urban middle class primarily fueled spending and brand interest 10 years ago. In rural India, income and consumption had fluctuated with the seasons. Today,
as the agrarian economy becomes more diversified, incomes are rising and stabilizing. People are consuming more – even entertainment, often on mobile phones.
The emergence of the millennial generational, which impacts brand building in many parts of the world, is more exaggerated in India, because it touches the tension between tradition and modernity, family and individuality.
The millennials, who have grown up with greater affluence than their parents, spend money more easily. The proliferation of travel sites in India reflects this mindset open to new experiences. The millennials also have an upgrade mentality. In a relaxation of family traditions, they feel freer to question the authority of their parents.
Growth across categories
These changes have impacted most categories. Fashion and apparel have grown as categories in India because of increased wealth, more brand choice and also because the Internet provided a window onto global trends. People follow international fashion blogs. Film is an influence. Wardrobes have expanded, particularly among young people.
The luxury category almost did not exist in India 10 years ago. Consumers had limited disposable income and brands had limited market exposure. The global luxury brands were available only in high-end hotel shops. Now luxury brands are available in malls.
FMCG brands were available, of course, but in the last 10 years the market has expanded at the premium end. Health foods are becoming more popular. In personal care there is much more segmentation across the category.
Fast food didn’t exist as a category in a meaningful way 10 years ago. Eating out was a special occasion. Consumers are more willing to experiment today, and there is more choice. Today most of the major fast- food brands are represented in India.
Impact of mobile
E-commerce has been growing rapidly and expanding the market, driving categories and consumption, in part because of how young people consume and seek fashion online, often on mobile, rather than by shopping in a physical store. E-commerce predominates in certain categories, like mobile phones, especially with the growth of online malls, such as Flipkart.
The financial services sector has been among the most aggressive in taking advantage of mobile. Greater online presence has enabled banks to extend their presence deeper in India, providing credit and other products and services to a rising middle class.
Still, mobile remains a relatively untapped opportunity for introducing and promoting brands. Local brands often enter the market using mobile, and despite the presence of many global brands, India, with 22 regional languages and over 600 dialects, remains a diverse country with many local brands.
Consumers increase quality expectations
Having grown more sophisticated about products and brands, Indian consumers are less tolerant of products that don’t perform well. They expect more and will demand excellence.
As more consumers enter the middle class, people with more purchasing power will want to differentiate themselves with the brands they use. There will be more segmented marketing, as is already happening in personal care.
In this changing brand environment, brand communication across urban and rural India will need to be more uniform so that all groups feel they’re receiving comparable attention from brands.
More towns will emerge where brands can drive penetration, but leading brands need to innovate to meet the needs of these consumers.Simply introducing standard versions of products to regional markets will not be enough, especially as new, more consumer-centric brands appear.
Customization of products to meet the tastes and desires of India’s diverse cultures will be important in certain categories, like food. Customized communication, however, will be necessary across all categories. That will require an understanding of cultural nuances, and more than simply dubbing a standard commercial into local languages.
Shopper marketing in-store communication will increase in categories like food where brands want to improve penetration. Food preferences vary widely by region and culture in India. Food sampling works. Shopper marketing will also play a larger role in new and niche categories.
These other trends and developments will emerge:
“Brand India” will continue to be about services – banking, technology and cinema, for example. It may be that “Brand India,”a service center,will balance“Brand China,” a manufacturing center.