Rama Bijapurkar is one of the leading experts on consumer behaviour and market strategy in India.
A regular contributor to the national dailies and a visiting faculty at IIMs, Rama Bijapurkar continues on her quest to demystify the enigmatic Indian market with her new book ‘A Never Before World’.
Her new book tries to demystify the Indian consumer market labyrinth and succeeds at that. In it, she turns the spotlight on the various camouflaged facets of consumer India.
The Indian economy is inching closer to $2 trillion mark in absolute terms, which makes it the 10th largest economy in the world and the 3rd largest in terms of Purchasing Power Parity (PPP). Worldwide, multinational companies (MNCs) are making a beeline to India with their wares, consumed with the idea of partaking in the burgeoning Indian consumer market. So far, so good.
Problems arise when these MNCs try to clone the success templates from the business back home to emerging markets such as India. The copy-paste formula works to a certain extent but it certainly doesn’t help launch the business into the stratosphere.
Bijapurkar advocates ‘Think local, Act local‘ approach to succeed in a dichotomy-ridden country like India.
Global brands such as L’oreal, McDonald’s’, 3M, etc. savored success because they customized their brand portfolio to suit the demands of the Indian consumer.
Another significant aspect for global corporations to consider is that India is a high volume, low margin play. This is a sharp contrast to the developed countries which exhibit moderate volume, high margin trends.
MNCs hankering after moderate volumes, high margins in India run the risk of limiting themselves to a narrow niche.
Take the example of the luxury ice-cream market.
The Indian audience loves the idea of luxury cars but the idea of luxury ice-creams still doesn’t stick!
Thus, unless the uber-premium FMCG brands such as Haagen-Dazs open up to the wider Indian audience by stepping out of luxury malls and by introducing a range of Indianized (marked down) offerings, their chances of striking a bonanza in the Indian market would remain abysmal, at least in the near future.
What worked in global markets won’t work in the emerging economies. Indian market is unique and a non-standard one.
It teems with heterogeneity whichever way one looks.
Indianizing the product portfolio is the key to success for most FMCG & consumer durable companies. A long tail awaits on the periphery of the Indian consumer story – ignored & discounted.
India faces so many conundrums at so many levels. We have a billion plus population and not enough wherewithal to provide basic amenities to all. A whopping population of 600 million is below the age of twenty-five but then a major chunk of it lives in poverty conditions.
Bijapurkar cites a shocking study which reveals the bottom 40% of the Indian households have virtually zero consumer durables. And, only a paltry 0.5% of households possess the highest number of consumer durables and FMCG products.
She also deciphers several fallacies related to Indian consumer market:
The myth of the Indian middle class
Rama demystifies the often-talked-up factoid about the gigantic Indian middle class, estimated to be 250 million in the year 2015 according to McKinsey.
She explains that the segment that drives the Indian consumption story is not the middle class, but the top 20 percent of Indian households by income – the upper class. In a way, India’s upper class is its middle class – the 50 million odd households, the top quintile in the per capita income pyramid.
Urban dwellers have the higher intensity of consumption and sophistication
Author disagrees. Half of rich India lives in rural India.
Rural India shows urban-like consumption behavior. The urban-rural consumer behaviour divide is blurring thanks to the sow yet useful improvements in infrastructure and connectivity.
On the flip side, rural India is also home to the poorest in India. You have the frightening statistic of 90 million households residing in extreme poverty conditions.
Not just that, the wedge between the rich and the poor within urban India is scary. For example, the urban top 10 percent of spenders eclipse the bottom 10 percent of urban India by almost 10:1.
The chimera of Growth
For the uninitiated, it may come as a bit of a shock that it took India over 60 years to reach $1 trillion in GDP but only 7-8 years for the next trillion $ milestone (assuming $2 trillion mark shall be overcome in 2015 as we are $1.87 trillion as of now).
She warns, however, against any unwarranted optimism on the future growth trends. An array of grey areas might make the consumption journey even bumpier in the future.
Wage inflation, increasingly withdrawn subsidies, food & fuel inflation, decreasing rates of growth of discretionary income could all upset the apple cart.
Conclusion
Finally, ‘A Never-Before World’ is a logical extension of Bijapurkar’s previous bestseller ‘We are like that only‘. However, in both its depth and breadth, ‘A Never-Before World’ proves to be a more evolved version of the two.
The author utilizes her consulting and teaching experience to good measure. Her personal anecdotes lend depth to her opinions and her professional experience proves instructive.
The reader gains striking insights into the true Indian consumption story which stands in stark contrast to the ones often bandied around by several media outlets. Nonetheless, amidst all the positives, there is one unfavorable aspect of the book, too.
The amount of data can inundate and drown the reader in utter bamboozlement. Those with the inability to digest data may find the book cumbersome.
In short, it is a book meant for the discerning reader.
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