The Rural Growth Tide

“Rural consumption outpaces that in cities” read the recent headline in the Times of India. The National Sample Survey Office (NSSO) data showed that while the growth in spending on goods and services by rural India during the two-year period of 2009 – 10was 19%, it was 17% for the urban areas, a clear indication of how the government’s social programmes are trickling down to rural India.

While the overall figure for rural consumption in the country has always been larger than urban consumption, owing to its sheer size and expanse, the disparity between the growth rates should not go unnoticed.

Marketers’ bullishness for rural markets is strongly driven by census figures that show a rapid rise in purchasing power of the rural citizen of India. Recent trends indicate definite changes in rural lifestyles:

  • Growth in education levels and employment owing to the government’s popular rural employment generation push through National Rural Employment Guarantee Act (NREGA)Rural Coke

  • Growing interaction with urban India, fueled by the construction boom and modern retail outlets for farm produce

  • Increase in overall income levels and rural prosperity

  • Enlarged media reach that penetrates almost all rural households (Close to 60% come in contact with any of the conventional media, like press, TV, satellite, radio or cinema)

The urban economy has always been more dependent on Continue reading

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Functional Literacy and the New Consumer

Socialization, for humans, begins as early as when the brain begins to recognize faces. Consumer socialization soon follows suit; taking cornflakes out of a particular box every morning for breakfast, putting on shoes with three stripes on your toddler’s feet every morning, etc are some of the simple, and often considered trivial, aspects that go a long way in shaping how an individual behaves as a consumer.

Every step that we observe and interpret, serves to make our lives easier. This is mostly done through Heuristics, mental shortcuts based on previous experiences that aid us when presented with a situation. When we look at a chair, we know what it is, we know of its uses, how it’s made, etc only because we have seen and heard of it earlier. This is how the human brain is wired to work and is also the reason why an individual who is blind from birth, will not be able to interpret visuals he receives from new found sight.

Heuristics is what makes the concept of ‘functional literacy’ worth taking a look at. Functional literacy in a typical consumer environment would mean the basic skills required to be able to read product labels that differentiate offerings, the ease with which an individual navigates around in a shop, being able to calculate value of units rather than the pack size, totaling costs of purchased items etc. Having had an education, if effective, Continue reading

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Retailing and the FDI Debate

Retailing is the interface between the producer and the individual consumer buying for personal consumption.

The Indian Retail Industry, which contributes 14% to the national GDP, is largely an unorganized market. Only 4% of the industry is organized, and it employs just 5 lakh of the total 4 crore work force in this sector. One of the reasons behind the explosion of retail and its fragmented nature in India is the fact that retailing is, probably, the primary form of disguised unemployment/underemployment in the country. It is the lack of other economic opportunities that forces people into this form of self-employment, even though much of the profit is marginal.

If we look at retail formats, the first is Single brand retail which is confined to sportswear, luxury goods, apparel, jewelry and handbags. FDI in single brand retailing means allowing single global brands to sell products of their own brand to consumers directly.

The second is Cash and Carry formats which comprise Continue reading

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Bollywood Marketing

The Indian Film Industry is the largest film producing industry in the world. It produces close to 1000 movies a year, compared to Hollywood & Japan which only produce about 500 and 400 movies a year, respectively. With revenues of US $3 billion in 2011, growing at a rate of approx. 10% a year and expected to reach US $4.5 billion by 2016, Bollywood as an industry is a nascent breeding ground for marketers.

In Bollywood today, if the box-office is King, then “Marketing” is the King-maker. Many a film have marketing budgets which either equal or exceed the film’s production budgets, with big bucks flowing into promotional tours, ad campaigns, corporate tie-ups, television appearances, etc. No matter what the content of the film, ultimately, it is how it is marketed that really sets it apart from its peers. (Pic courtesy –

These days, the need for marketing and the marketing budget of a film is directly proportionate to Continue reading

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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 Continue reading
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Online Groceries – Here to stay?

All of you who read the blog – Technology trends in MR – would agree that technology has made the lives of researchers much more interesting and easier. An excited call from a friend last evening pushed me into evaluating yet another outcome of the technology revolution – Online Retail.

While we were in the midst of a discussion of how she got her favorite perfume at a huge discount from the comfort of her home, courtesy an online store, her mother called out to her to run and get some grocery from the nearby store. Her elation quickly turned into whines and excuses of why she did not want to do it and it set my mind ticking.

A quick Google search and a plethora of online grocery stores mushrooming in India showed up – MyGrahak, BigBasket, Atmydoorsteps, ecityindia – to name a few. Further search revealed that the past few months also saw the closure of similar grocery e-tailers like Nammagroceries, Harisabzi, Subzimandi, etc.

So, what is the future of online grocery retail?

According to a news report by Boston Consulting Group (BCG), Online retailing in India is pegged to be worth Continue reading

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Can Videocon move up the price ladder?

Sep 17, 2012, Business Standard – Price upgrades can be hard to get right and brand renovations take a lot of time and money. Above all, it can be difficult to transform customers’ perceptions. However, mass market brand Videocon believes it can climb up the price ladder, given its long association with the Indian consumer. Experts discuss Videocon’s prospects.

Pranesh Misra : Chairman & Managing Director, Brandscapes Worldwide Videocon has been successful as a mass market player offering value for money products. Trying to enter the premium, high technology segment of the consumer electronics market is a strategy fraught with danger. Mass market and premium are two ends of the totem pole. The rules of the game are distinctly different — and moving from one end to the other is not as simple as offering a premium product mix or communication mix. Opting to be a premium player means re-engineering the business systems over a broad spectrum, in areas such as R&D, customer service infrastructure and mindset, distribution coverage, pricing strategy, knowledge and attitude of front-line staff and long-term top management commitment. It means organisational un-learning of the mass-market rules, and replacing these with premium market principles. (Pic courtesy –  Business Today)

Continue reading

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Entrepreneur Decode – The ‘Milk Van’ Library Model

Reading e-books is a fast-growing trend. But for many, the charm of reading a physical copy still remains. In a quest to find a library close to my residence in Mumbai, I stumbled upon a very innovative business idea, Just Books CLC.

I was greeted by a couple of ladies who seemed to be too young to be librarians.This was the cleanest library I’d ever visited. One could easily mistake it for a retail bookstore like Crosswords or Landmark. My curiosity for this new-age library chain forced me to engage into a conversation with the librarians and thus emerged the story of Just Books CLC.

Sundar Rajan, a software engineer from Bangalore started ‘Strata Retail & Technology Services Pvt. Ltd.’ a.k.a.  ‘Just Books CLC’ in May 2008 with a seed capital of Rs. 50 lakhs. In order to expand his business, Rajan considered the franchise model. To learn more about the franchise model, Rajan attended several conferences and discussions on the franchise system. At one such conference he met Continue reading

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Will Kirana Stores survive the onslaught of Modern Retail?

All the discussion about the government allowing the entry of retail giants like Walmart into India, ended up in traditional stores being portrayed as hapless victims. Well, the reality seems to be far from it!

According to IBEF, the size of India’s retail sector is currently estimated at around $450 billion and organized retail accounts for around 5% of the total market. While traditional retail is expected to grow at 5 per cent and reach a size of US$ 650 billion (about 76 per cent), organized retail is expected to grow at 25 per cent and reach a size of US$ 200 billion (24 percent) by 2020. Traditional trade, which includes Kirana stores, small grocers, chemists and paan-beedi shops, has a high penetration even in countries like Philippines, Mexico, Egypt, Morocco and Nigeria, as high as Continue reading

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