India 2015: OVERVIEW | Cross Category Trends
Needs of the growing middle class, and the national agenda drive trends
Expanding middle class seeks broader choice
Brands are adding new products to serve more narrowly targeted audiences, as consumers in India’s expanding middle class desire – and can afford – products that fill particular needs or wants. Premiumization is the clearest example of this trend. The personal care brand Lakme? markets specialized skin care products that command a higher price point, for example. Segmenting the market by gender, the two-wheeler maker Hero designed and markets a motorcycle model specifically for woman. To meet the need for time saving convenience as more women enter the workforce, FMCG brands are introducing more ready-mix foods. Some of these products provide traditional Indian dishes without the time consuming preparations. That benefit fills an even more specific need – helping people live in the new India while satisfying their taste for the old India.
Online purchasing boom is brand building chance
Like consumers in most markets, Indians are increasingly purchasing online to find wide product range, convenience and transparent pricing. In India, the online range goes well beyond basic apparel and electronics, and includes just about any category available at bricks and mortar locations – even luxury products like jewelry. And Indians have many online marketplaces to choose from, including Flipkart, Snapdeal and Jabong. Along with other Indian-based marketplaces, Amazon has been present in India for about three years and Alibaba arrived during the summer of 2015. Online is booming but it’s just starting. Online is an efficient way to build a brand in a country as large as India.
Innovative Communications reaches large audience
Mobile is another instance where India is similar to other markets, but also different. In India, mobile is not just a device for personal communication, it’s part of the national agenda to link the nation and provide more equal access to health care, education and government services. Mobile is particularly suited for reaching the roughly 70 percent of India’s population that lives in rural areas and is not always easily reached with traditional media. In an innovative marketing development, Hindustan Unilever launched its own radio station available through the mobile phone. People can listen to the station free of charge by giving a missed call to a number. Unilever gains customer contact details and can target ads. Banks use mobile to reach the unbanked as well as the new generation customers with apps that combine financial transactions and social messaging.
CORPORATE SOCIAL RESPONSIBILITY
CSR is a requirement, not an elective option
In many western markets Corporate Social Responsibility (CSR) remains the philanthropic giving that appears in the annual report, sometimes as bolted on initiatives disconnected from corporate purpose and strategy. In India, CSR is much more connected to the corporate mission. In the individualistic western tradition, CSR and higher purpose usually are embraced when they serve the primary corporate goal of enhancing shareholder value. In India, with more of a balance between individual and communal welfare, companies are expected to serve not only the interests of their shareholders, but also of the nation. CSR spending isn’t an elective option. The Indian government mandates it. Ultimately, building the nation helps grow shareholder value by creating the wealthier, better educated population necessary for a consumer society.
Consumers hospitable to new ideas, brands
It’s not that India hasn’t been known for its entrepreneurs. It’s just that they’ve often lived in Silicon Valley. That’s beginning to change for several reasons. First, what’s more appealing to an entrepreneur than a fast growing market? And no major market currently is growing faster than India. Second, India has always made room for entrepreneurs. More than half of the BrandZTM India Top 50 brands are privately held, and entrepreneurs launched many of them. About a quarter of the BrandZTM India Top 50 brands are owned by entrepreneurial Indian family conglomerates with names like Aditya Birla, Bajaj, Bharti, Mahindra, Reliance and Tata.
Brands are expected to be agents of social improvement in India
Creating a more inclusive society is a key aspect of India’s national agenda. It primarily means extending greater opportunity to those who have been historically excluded because of poverty, low social status or geographic inaccessibility. But other formerly disenfranchised groups are being embraced, such as the differently-abled. This Indian term itself signals a mentality that’s more progressive in its emphasis on different abilities rather than disabilities. Brands are expected to be agents of social change in India. In this case, progressive advocacy expressed in product offer and communication, can also strengthen customer bonds.