The Indian Consumer is Changing ….

India is undeniably mammoth. A billion people, topped up with the population of Australia each year! And now a sizeable number of these people have money to spend- the Indian rich out-number the population of several developed markets put together. So global brands are taking notice and salivating at the prospect of conquering this behemoth.

As a market, India is a melting pot of cultures, food, languages and religions. Although there are differences, the last decade has seen collective, defining changes in the Indian consumer.  Some significant changes in the consumer that are shaping the market place are –

  1. Rise of the consumer as a force
  2. Easy-on-the-pocket aspirations- seeking value
  3. Women in the workforce
  4. Connectivity and awareness
  5. How she spends her time & money
  6. Changing lifestyle and food habits
  7. Western with Indian flavor- localization is the key
  8. Modern retail driving experiential shopping
  9. Individuality is the new status symbol
  10. Bolder and more expressive

(Illustration – Lo Cole)

We will discuss each of these trends in a series of 4 blog posts including this one.

1. Rise of the middle class consumer as a force – While the middle class is growing in numbers, it is growing disproportionately in its spending capacity too. It is estimated that India’s disposable income will grow by over 50% in 4 years between 2010 and 2014!  The average household income will grow 3 fold, making India the world’s 5th largest consumer economy by 2025, up from 12th currently. HNI households (income Rs 250 mn+ pa) standing at 81,000, and are expected to hit 286,000 by 2016-17. The luxury goods market is expected to grow @ 20% per year between 2010 and 2015.

This new found affluence is making the consumer more positive and optimistic about the future. She is more confident, aspiring to a better lifestyle and willing to go out and get it.

2. Easy-on-the-pocket aspirations – Seeking value – Indians, like consumers in most developing economies, seek value. This is evident across brands that have been noteworthy successes in recent years. Take the mobile phone category. Samsung, HTC and Micromax have offered great features at very competitive prices. The focus of each has been relentless trimming in manufacturing costs, yet offering constant innovation through lower cost home-based R&D. Samsung started at the lower end of the price spectrum, but now plays at the high end, offering superior features at value prices. It beefed up distribution (up from 50,000 dealers in 2010 to 70,000 a year later), used multiple media for targeted messaging and benefited from the multiplier effect of word-of-mouth of happy consumers.

Successful airlines in a very competitive market were those that democratized air travel. They offered no-frills services at affordable prices routing other players from the field.

That he is value-driven does not mean that higher end products do not work with the Indian consumer. They will succeed so long as the consumer perceives value in the offering.

Take for example 2 cases in the car category. The globally celebrated $3000 car, Tata Nano, was launched at a low pricewith world-class features, sleek design, and greatfuel and space efficiency. The company had huge expectations from the brand, positioned to upgrade the 2-wheeler family into cars. This was an idea that could not fail in a market like India.

There were several reasons for the Nano’s poor performance- politics, production issues, bad press etc. However, the consumer rejected the brand for its lack ofpower, stability and space. Low price cannot come at the cost of stability or safety. And a 2-wheeler family upgrading to a car would ideally want more power and boot space, both scarce in the Nano.

In contrast, Mahindra &Mahindra’s XUV 500, an SUV competing with established players like Toyota Fortuner, Chevrolet Captiva, Mitsubishi Endeavour and Outlander; had such high demand that it allotted its vehicles by lottery. This was achieved because it offered best-in-class features and its launch price was most competitive in its segment, offering great value for money. Although price was later rationalized (hiked), demand for the XUV 500 continued to be high.

To be continued…

This blog post has been written by Radha Arakkal, Insight Consulting Partner & Practice Leader – Marketing Science & Data Mining, Brandscapes Worldwide. Radha is an expert at enthusing two things with life and enthusiasm – datasets and our office parties 🙂
Contact Email :-

Pics courtesy –,,,,,,

About Brandscapes Worldwide

Brandscapes specializes in marketing analytics and insight consulting for consumer goods, services and the retail sectors. We leverage the power of advanced data mining tools and the practical marketing and communication planning expertise to distil actionable marketing insights.
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