Indian customers, today, are more informed, aware, and research-driven before making purchases. The pandemic demanded frameworks like assisted e-commerce platforms to keep up with customer beliefs. These platform-based models are gaining clout, leading to changing customer wallets and consumption moments. Digital acceptance and acceleration have been driving forces for the resurgence of New Bharat.
On The Blueprint - Business In the New Normal by CNBC-TV18 and KPMG in India
, Prashant Nair talks to esteemed panellists to find out what are the consumer shifts seen post the pandemic and with the resurgence of new Bharat, Is consumer commerce the new way to tap for the companies, what strategies consumer companies come up with to woo consumers in 2022?
Trends That Revolutionised Industry Movements in 2020
2020 served as a cut-throating environment for businesses to survive. However, industries were welcoming to fresh advancements during this period.
For instance, the agricultural industry was quick to adopt industry-specific technology and automation in manufacturing plants. Additionally, the government's generous support through the point of scale material in the fertiliser industry and a 65 grand grant pumped up the agriculture sector's overall performance. With global firms looking for alternate avenues to diversify risks, India now stands a promising chance to capitalise on the opportunity.
KPMG, in its recent version of “Me, my life, my wallet” survey studied consumer preferences across 20 plus countries and 20000 odd respondents and found some interesting insights. First, the last 8-10 months saw the Indian consumers' inclination to purchase from brands and retailers with social causes linked to them. Second, 75 per cent of Indians are still concerned about the pandemic's effect on their financial stability and have directed their expenses towards utility consumption only. Finally, people are more conscious about data privacy and sharing now and only 30 per cent of the respondents surveyed were happy to share the data for some kind of a loyalty program.
The Digital Disruption
Digital mediums worked as a fantastic glue to loop in different segments of the Indian economy last year. Rural India's rising digital penetration and usage was impressive. Eventually, they surpassed the urban digital coverage, leaving everybody surprised.
People are more health and hygiene conscious today and demand interest to be involved in healthcare. Prashant Tandon, CEO, 1mg believes digital access to healthcare is a safer alternative for people today. He says, "This rising penetration shows the kind of impact digital has on today's consumers and dictates the need for companies to increase their digital spend."
Digital Impact on Profitability and Consumer Reach
Digital operations have significantly improved balance sheets by helping companies shift their mindset, like cutting wastages.
In April/May last year, e-commerce was a necessity to connect with audiences. This spark of convenience and increasing return on value has accelerated the e-commerce adaption in 2021. Online commerce is going to be the mainstream platform to shop from now.
Currently, the Indian e-commerce sales contribution, on average, is 3% of the overall sales. This is going to skyrocket up to 8-9% in the next two years. Harsha Razdan, Partner and Head - Consumer Markets & Internet Business, KPMG India, believes the word "retail" will no longer be a usable terminology. "The word 'retail' would become irrelevant in the next two years and be replaced by something called as consumer commerce", he says.
The Make in India Boom
Rural India is catching up fast with its urban counterpart, which in turn is catching up fast with the western world. A quick look at rural purchasing patterns reveals customer loyalty to brands, which is likely to sprint during sale periods. These rural consumers are 1.5 times more likely than urban consumers to buy indigenous products.
Sameer Goel, MD, Coromandel International, states, "The Government's Make in India and Atmanirbhar Bharat initiatives are pooling in money for better rural infrastructure and blueprints. Companies are increasingly acknowledging consumer tastes, the results of which are backed by statistics."
Rural: The Big Focus for Companies Forward
Harsha V Agarwal, Director, Emami, is confident that the companies will focus on developing the rural and Tier 2 and 3 cities in the near future. "While consumers across all areas are more utility-driven today, overall sentiments hold strong for the rural segment of the economy", he says.
Agarwal referred to AC Nielsen’s latest data, revealing a surprising gap in the urban and rural growth divide. The report calculates a 14% growth in rural India in the October-December quarter of 2020, enjoying a 13% lead in growth observed in Metros and Tier 1 cities.
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This is a partnered post.