The Indian ‘Consumer’ Market: Deprived to Democratic?
This case study enables a discussion on how the Indian consumer market has changed since the time of attaining independence. The primary reason for these changes is the country’s economic development since independence, which is evident from a rise in the country’s gross domestic product. Another key driver of these changes is the increasing urbanisation of the country. The rise in the urban population and the increase in the number of cities with population of over 1 million stand testimony to this phenomenon. The increase in the incomes of individuals has resulted in the increased demand for and consumption of branded products and a rise in discretionary expenditure.
India’s growth story is also marked by a rise in the economically active age group of 15-64 years, which increases the income available for consumption. This is besides an increase in the country’s middle class population, which today is a key driver of consumption in the economy.
The consumption patterns of Indians have also been undergoing a metamorphosis due to the growing digital influence in their daily lives – the number of internet users in the country increased from 1,006 (approximately) in 1992 to 189 million in 2013. The phenomenon of accessing the Internet on mobile phones is registering a speedy growth. An important consumption-related effect of increasing internet penetration is the explosive growth being registered by e-tailing in the country. E-tailing also owes its popularity to the innovative business models being employed by e-commerce companies, the hassle-free shopping experience and the convenient payment options being provided by them. Apart from this online purchase of goods, an increasing number of Indians are employing the Internet to research both the quality and prices of products.
Apart from e-tailing, the entire organised retail segment in the country is witnessing considerable expansion. The entire shopping experience, including the ambience, has become important for consumers and they no longer hold the notion that Indian products, are by default, inferior to foreignmade products. The restaurant and multiplex businesses have been booming primarily on account of the patronage from the growing number of affluent households. However, can companies sustain their efforts to build businesses by catering to the requirements of the new Indian consumer and which are marked by customer-centricity?
Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion
This case study introduces the students of the Consumer Behavior subject to the evolution of the Indian consumer. The participants were asked to read the following articles to better appreciate this evolution:
- • Subbu Narayanswamy and Adil Zainulbhai, “India’s consumption evolution”, http://www.business-standard.com/article/opinion/india-s-consumption-evolution-107050501032_1.html, May 5th 2007
- • “Tapping into the Indian Consumer Market”, McKinsey Global Institute, June 28th 2007
Expected Learning Outcomes
- • How has the Indian consumer market evolved and what are the forces that have contributed to the evolution?
- • What are the defining characteristics of the new age or millennial Indian consumer?
- • How can companies consistently derive business from and grow profitably with the new age Indian consumer?
This case study can be used in the following course/module:
- • Consumer Behavior Course (as outlined under PCU) –To understand the different nuances of the new Indian consumer market and to act as a background for appreciating the practical implications of various concepts constituting the course.
- I. From the case facts, what is your analysis of the Indian consumer market and the Indian consumers?
- II. If you are one of the following (or representing one of the following), how would you interpret the case facts:
The classroom discussion and analysis for this case study could be summarized through the Board Plan [Exhibit (TN)-I]. The classroom discussion comprised two exercises spread over 120 minutes. The first exercise involved an exhaustive analysis of the changes that the Indian consumer market has undergone and the linking of the case with some of the consumer behaviour and marketing concepts. This exercise lasted for 60 minutes. The second exercise involved a discussion of the assignment questions.................