Changing face of the Indian middle class
Published in www.indiainc.com (2011)
The diversity that characterises the Indian consumer has never failed to amaze global brands wanting to gain a share of their pockets. Selling to India’s new middle class will need to be innovative to square the difference between the rising aspirations of consumers, mindsets and their still-modest pocketbooks.
The past prevails
The modern middle class constantly finds itself caught between values and aspirations. Aptly described by Santosh Desai “ Balancing responsibility with indulgence, the need for external display and internal comfort, the family and self, desires and duties, self-respect and pragmatism…”
Paisa Vasool – Worth its price!
The Indian consumer seeks value and looks for that extra bit. He has learnt it from his mother. She would ensure that she got her dhania and mirchi (coriander & green chillies) free, from the vegetable vendor.
The definition of value will be different for different products. For instance, they will seek the lowest price for products that serve basic needs, whereas in others the determinants will range from aspiration to convenience to brand name.
Changing inside out
There will be increasing fear of being ordinary. Consumers would want to be extraordinary though still within current social norms.
Consumers will get more conscious about their health and well being.
They will begin getting concerned with the surrounding environment?including nature, society, politics and public policy.
Think India – go back to the drawing board
Success now requires the ability not only to understand regional and local tastes and preferences but also to design products to suit local culture and lifestyles
South Korea’s LG Electronics struggled when it came to India in the 1990s until a change in foreign-investment rules enabled the company to invest in local design and manufacturing facilities. Noting, for example, that many Indians use their TVs to listen to music, LG introduced new models with better speakers and, to keep prices competitive, less costly displays. The company marketed many other original products, including appliances with programming menus in local languages, refrigerators with brighter colours and smaller freezers, large washing machines for India’s big families, and microwaves with one-touch “Indian menu” functions. Those innovations were possible because LG invested heavily in local R&D and staffed its operations with thousands of top-notch Indian designers and engineers. LG’s product innovation center in Bangalore is the company’s largest outside South Korea.
Give them the means / Financing their way to happiness
Financing can play a role too. Levi Strauss recently announced that it would let customers in India pay in three monthly instalments for jeans costing more than $33. A pilot version of the program, in Bangalore, showed the company that consumers who took advantage of this option spent an average of 50 percent more. Introducing it enabled Levi Strauss to preserve the status of its jeans as an upmarket, aspirational product, while bringing them within reach of millions of less affluent young consumers.
The Indian middle-class will be an essential ingredient in the 21st century brand’s growth story.
Neishaa Gharat, Catalyst – Chalo India, over the last 15 years has worked on developing design and communication strategy for global brand like Johnson and Johnson, Diageo, Otis, Symantec, Sodexho, Wella, Sandoz, Time Out, AC Nielsen, SKF, Tupperware, Akzo Nobel, who entered India. She works as an India market specialist with brand consultancies.