Hello, marketer, this is what the Indian consumer wants
Decoding the Indian consumer with the help of Kantar Consumer Trends Report 2020 and what the marketer needs to do
“The Indian consumer is a bargain hunter – the difference now is that not only does he want a bargain, he also wants value and convenience along with it,” shared Sunil Kataria - CEO, Godrej Consumer Products with AFAQS. He further adds:
“Indian consumers these days have become quite unreasonable. They want everything at a discounted/reasonable price. They want a product of the best quality with differentiated benefits. They want it to be accessible and easy to reach as well – they expect the convenience of delivery at their homes thanks to e-commerce. They also want a guarantee of service and of service quality after the product purchase.”
In my opinion, the Indian consumer is not unreasonable. She is the “Queen” and far more equipped and smarter than the marketer.
Waiting for deals, and economy to recover
“97% of Indian households in 2019 bought at least one CPG (consumer packaged goods) product on promotion, with overall promotion volumes up by 6.4%,” revealed the recently released Kantar Consumer Trends for 2020 report. Additionally, 85% of consumers check at least two data points other than prices and discounts when purchasing.
But is consumer spending? The consumer is waiting for the economy to recover. “85% of consumers check at least two data points other than prices and discounts when purchasing.”
Other than the Indian government, everyone has accepted the grim reality. The slowdown has severely impacted the Indian advertising industry. “The Indian advertising market has been hit badly and now it is in a recovery mode.”
GroupM futures report 'This Year, Next Year' (TYNY) 2020 informed that India will continue to top the list as the fastest-growing major ad market in the world. Digital ad spend will lead the chart but if you look closer digital ad spend got a hit in the 2019f vs 2018 and the 2020f vs 2019 is on a recovery mode. Not just digital, TV has also been hit badly and it is slowly recovering.
In my earlier story about the DAN Digital Advertising Report 2020, I had highlighted that the Indian advertising market is on a recovery mode now. Digital is the medium that is going to witness the strongest growth of 27% in 2019-2020. And hence the medium is the poster boy.
The latest to confirm that the advertising market will have a muted growth is the Pitch Madison Advertising Report 2020 “In arriving at our projected growth figure for the whole year at 10.4% we are guided by the expectation that the economy should bounce back in the second half of 2020 as indicated in the Government’s Economic Survey published on January 31, 2020.”
Will buy environment-friendly products
Why do you think that almost every brand manager is talking about “brand purpose” in every interview? The brand purpose or the ‘Why’ of the Golden Circle is an age-old phenomenon but somewhere in the rush for short term goals the ‘What’ became important. Thanks to the bold and smart consumer, brands have been forced to think about the brand purpose and the environment.
22% of Indians say that plastic waste is the top environmental concern – significantly higher than the global average of 15%. Besides, 53% of Indian consumers will pay more for environment-friendly products.
In 2018 Reliance Industries as part of its commitment to a circular economy has launched R - Elan – Fashion for Earth, a fashion line which is made of 100% PET bottles. For this year’s Lakmé Fashion Week Summer/Resort 20 veteran fashion designers Pankaj and Nidhi Ahuja have come together with R-Elan to present their soon-to-be-showcased collection ArtFluence.
Bisleri has been on the game for the last few years with its ongoing Bottles for Change. The brand has been working to create awareness and educate citizens about the importance of recycling plastic.
The Body Shop is encouraging customers to return empty plastic packaging in strokes for recycling. Zomato will soon launch an online marketplace to procure eco-friendly packaging.
But if brands are thinking that they are doing enough then please read this with a cup of coffee:
“India’s plastic industry recorded an annual revenue worth Rupees 3.5-lakh crore in 2019, according to All India Plastic Manufacturers Association. The predicted polymer consumption growth between 2017-2022 is 12.9%, the study said adding that plastic is one of the fastest-growing industries in India and is connected to almost all kinds of businesses.”
Won’t wait, shy off and will find different ways
Brand loyalty is dead, you can’t do much just swallow the hard pill. While the consumer is helplessly waiting for the broken infrastructure to be better but meanwhile it has found ways to survive. “Consumers have embraced technological solutions such as carpooling and shared bus rides. Cities plagued by congestion and infrastructure troubles, such as Mumbai and Bengaluru, are quick adopters. The shared-transportation market will grow to ₹ 35,000 crores by 2025.”
Infrastructure problems have initiated reverse migration. “Second-tier cities and state capitals emerge as attractive places due to lower land and home prices, cleaner air and availability of quality education.”
However, tighter control in overspending does not mean that consumers are cutting back on experiences. “37% of urban Indians say that they finance experiences by trading down in certain product categories (including jewellery, mobile phones, apparel, and home furnishings.) Some consumers are optimizing their spending by renting kitchen appliances, clothes, and furniture; 25% of consumers would consider renting in the future.”
The renting economy isn’t a fad - “A 2019 report by Allied Market Research says the global online clothing rental market garnered $1.01 billion in 2017 and is expected to reach $1.85 billion by 2023. The market in the Asia-Pacific region is expected to grow at the highest CAGR of 11.5% between 2017 and 2023, led by India and China.”
As per a survey by real estate research organisation JLL Research, 93% of migrant millennials in India’s top seven cities live in rented accommodation and 60% of them said they didn’t have any plan to buy a house in the future or were unsure about it.
The current market size for furniture rentals in India is estimated to be $800 million as per studies. They indicate that around 150 million people aged 18 to 35 years live on rent in Tier -I and Tier -II cities and a majority of these youngsters are inclined towards furniture renting.
And it is not shying away from mitigating with risks of redundancy by reskilling themselves through online courses. “93% of Indian learners are in the 18-39 age bracket.”
Indian online learning has already received $1.17 billion in the last two years, compared to $540 million in the previous three years, according to venture capital data tracker Tracxn. Unacademy in its latest funding round has received $110 million from Facebook and General Atlantic.
Will watch local and play/relax
Today’s consumer wants her entertainment in the regional or local language. “An average Indian spends 6.2 hours consuming online content daily. Going forward, spending per month on digital media content is expected to grow by 2.5 times.”
95% of online video consumption is in Indian languages.
Marketers have no choice but to think local and reach out to the new audience sitting in Tier 2 and 3. Regional play a strong role across mediums from digital to TV to print to cinemas. Today’s consumer is a local Indian(a non-English speaking one) mobile phone user and increasingly willing to pay for content online which creates value for her.
“Earlier, we had to force the consumer to consume information, now he's out there hunting for it. You can give the consumer relevant and targeted information using analytics but you need to have the right content ready. You can't serve up a TVC as a response to a search query,” shared Vivek Sharma, CMO, Pidilite with AFAQS.
“We also see voice and vernacular coming up in a big way since most of the carpenter community may not necessarily be using English to search for their queries online.”
With the massive proliferation of smartphones and cheap data, Indians have found new love with mobile gaming. “76% of the gamers indulge in playing games on their mobile phone more than twice a day; 31% play 4-5 times a day. [70% of gamers spend more than half an hour and 42% spend more than an hour playing mobile games]”
Online gaming(Real Money Games + Mobile/casual games + e-Sports) is estimated to witness a compounded growth rate of 32%(INR250 billion in FY24) over a five year period. Mobile games are driving the share(89%) of revenues in online gaming.
Read: Mobile gaming the driving force of Indian online gaming
TikTok the app that the majority of Indians are in love with including yours truly is preparing a major push into the mobile gaming arena. World’s fastest-growing app is also testing shopping on its platform. “It is reportedly looking to add a new URL field into its profile bios, which would provide a means to drive traffic back to your website directly from the app.”
Indians living in the T2-T3 are finding newer ways to sell on social platforms and TikTok will play a huge role. Social commerce platforms like Meesho, GlowRoad, Dealshare, Mall18 will tap into the next wave of online shoppers [200 million] from smaller cities of India with very different behaviour and needs vs the current group.
The question is are brands ready to understand the different behaviour needs of a consumer who might be sitting in places like Raipur, Durg, Darjeeling or even Leh. Besides the network agencies living in the major metro cities ready to understand the nuances of Bharat. You will have to move out of your cubicle or micro-breweries to understand the 2020 consumer - a desi, powered by a smartphone who is willing to pay anyone who makes his life better.
The consumer is finally making the marketer work hard.