Changing Indian consumerism
As generations pass the buying decisions to the next generation, there is always a pretty apparent change in the overall purchasing behavior. However, in India this change has been more drastic. Here are some of the elements of the changing consumer behavior in India and its impacts as well as implications on various industries and opportunities for various players to maximize their potential
a. Saving/ Consumption ratio - As the old saying went in India, Earn 100, Save 75 and Consume 25. With the baton for buying decision being passed to the new generation consumer, the ratio has changed to Earn 100, Save 25 and Consume 75. Combine this with higher earnings and you can see that there is huge amount of disposable income that an Indian consumer now has which he would spend in FMCG, Food, Travel, Consumer goods, Gadgets and Automobiles. Also this means a huge opportunity for credit services as there has been a stronger demand for buying on credit.
b. Shift in buying behavior
With the products demanded shifting from asset creation to consumption, goods which come in either of these 2 spaces need a huge amount of re-adjustment in their proposition to stay relevant to the consumer needs in India. For example- the demand for jewelry is likely to wane whereas demand for more expensive consumer goods and automobiles is likely to get a boost. Even in jewelry space, traditional gold demand is likely to wane and get replaced by fashion accessories. Similar re-adjustment is necessary in most industries and considering the frantic pace of this change, it is necessary for companies to be ready rather than be a laggard to stay relevant. The shift in mobile phone market share from Nokia (Less technology & Low cost) to Samsung/ Apple (Better technology & More innovation).
c. Travel & Tourism
This sector deserved a mention here as it is likely to shift gears rapidly considering the consumer behavior in India. Airline industry will get a boost and passenger transport services as a whole is likely to benefit as a result. Also the amount spent by an Indian tourist has increased manifolds. Besides, tourism and travel does not just include travel services and passenger transport systems but also includes food and recreation as well as oil and energy industry.
d. Technology
Technology has had a huge impact on both the buying process as well as the decision making process. With e-commerce taking on conventional retailers and technology taking over conventional buying, the consumer has been more information savvy and has the ability to compare before making a choice.Also, marketing and sales technology has changed and there has been greater emphasis on using consumer intelligence and data mining rather than direct sales. Also, payments shifting online has been good news for credit card companies.
e. Impulse v/s Planned
Think of a traditional Indian consumer, even the process of buying groceries or a light fitting etc were all been planned purchases. Compare it with today, an urban consumer buys a lot of stuff on the go without thinking much. Impulse purchase has taken over a lot of buying. This emphasizes the importance of point of sales marketing and ability to ensure that the product/ brand occupies the top spot on the mind map of the consumer considering the variety of products available.
f. Losers
Considering that there has been higher spending by consumers, are there any losers which one needs to keep in mind? Here are a few which are likely to face stiff competition and need to innovate to stay relevant. Gems and jewelry, Retail outlets, Greeting cards & Sms services etc.
