India 2016 |Market Intelligence| Emerging Consumer Trends
More Indian consumers now buy on promotion
Indians are shopping on promotion. This recent development is among several emerging consumer trends identified by Kantar Worldpanel in its monthly tracking of purchasing habits in over 82,000 Indian households across 95 consumer product categories.
Shopping for promotional pricing is a major shift for Indians. Unlike some country markets, such as the US, where consumers wait for merchandise to go on sale in order to get the best price, Indian consumers typically have traded down in order to obtain a lower price. Kantar Worldpanel has discovered that the proportion of products bought on promotion is rising.
The factors driving changes in Indian preferences and shopping habits include: the rise in Indian nationalism and pride in India, increased consumer sophistication, determination to obtain quality products at the best possible price, and the availability of Indian products of improved quality. Along with shopping on promotion, key consumer trends include:
Premiumization Indian consumers are willing to pay more for a product or service when higher quality, more convenience, or another benefit justifies the premium. An ongoing trend for about five years, premiumization recently slowed slightly. This change is probably a temporary correction related to slower sales in FMCG categories.
Local brands Both local and multinational brands are gaining, but local brands are growing faster. Between 2010 and 2015, local brands grew revenue at a compounded annual growth rate (CAGR) of 20.3 percent, compared with a 13.3 percent CAGR for multinationals.
Hyperlocal brands In a related trend that Kantar IMRB and Kantar Worldpanel call “hyperlocal,” some rapidly growing Indian brands are limiting their expansion to only one or two of India’s 29 states. But these brands dominate in the states where they compete.
Herbal products The use of herbal products, historically an Indian preference, is making a comeback across personal care sectors. While the penetration of bar soap, toothpaste, and face wash grew 3 percent between 2014 and 2015, according to Kantar IMRB and Kantar Worldpanel, the herbal segments of those categories grew 9 percent, 12 percent, and 17 percent, respectively. Within this trend, one particular brand, Patanjali has had tremendous impact. Founded by a yoga guru who started with a limited range, the brand now is present in around 30 categories.
Indian flavors Consumer preference in packaged foods is rising for variants with Indian flavors. This trend reverses the previous interest in international flavors that were new and different to most Indians, and shifts back to the flavors familiar to the Indian palate.
Male grooming Sales of products that enhance a man’s appearance are growing rapidly. For example, while the penetration of face wash increased 7 percent last year; the penetration of male face wash increased 29 percent. The rising interest in male grooming, which was not a significant category in India until now, is linked to a connection that more urban Indian men are making between being well groomed and being successful.