“What consumerism really is, at its worst is getting people to buy things that don't actually improve their lives.” It is ironic that this quote is attributed to Jeff Bezos, CEO of Amazon.
As the largest exercise in democracy and the longest election in all of Indian history came to an end last week, much might be said about the political agendas that were on the table.
This article asks the question whether among the scores of political parties, there is but one person who has the vision to ask how and if we will be able to strategically manage the evolution of the maturing Indian market space to India’s advantage.
With the world’s largest voting population and the consistently favourable growth rate, the opportunity that is to be found in India is indisputable. For companies trying to sell all manner of products in a diverse variety of market segments, opportunity is everywhere and just waiting to be found.
The traditional Indian consumer was extremely value-conscious, save-for-a-rainy-day variety. However, trends are changing, and several reasons can be put forward to explain the change in attitudes in recent times.
Today, there is an increasing urbanisation of the population, with many hundreds of small towns evolving into small and not-so-small cities. According to the Boston Consulting Group, about 40 percent of India’s population will be living in urban areas by 2025, and these city dwellers will account for more than 60 percent of consumption.
Urbanisation is also at least partly responsible for the changes in family demographics. The same BCG report states that “the proportion of nuclear households, which has been on the rise during the past two decades, has reached 70 percent and is projected to increase to 74 percent by 2025. This ongoing shift is significant to marketers because nuclear families spend 20 percent to 30 percent more per capita than joint families.”
Another reason that might explain the changes is that the maturing Indian consumer is no longer only concerned with fulfilling needs. Instead, wants are replacing the need segment, which in turn gives rise to the ‘keeping pace’ mentality. Traditionally the markers of success for the Indian consumer were the ability to buy a house and a car.
This change from the needs-to-wants customer is observable in the auto industry with a rise in demand for SUVs. With its C5, Citroën’s gears up for entry into the India market and CEO Linda Jackson’s statement confirms how the company will be taking the 2020 Indian customer into account, “We are going in with an image builder followed by a suite of vehicles, which will be updated as we go along. And as we said, it’s a new launch every year. And we will be refreshing those vehicles because I have learned we need to have regular animation, life cycle management of those products...we are not going into India to come back out again.”
In observing how the Indian market works and determining that regular adaptation is needed to succeed in the current framework, Linda Jackson is simply playing to market demand, as would any smart company. However, what if those rules could be changed to better serve the Indian public while at the same time offering market opportunity?
Despite our culturally ascetic roots, as the market matures, and consumers become more demanding, instant gratification becomes the number one criteria just as it did in the West during the boom years and continues until today. Graham Hill, in his Ted talk, speaks of the $22 billion, personal storage industry in the USA, that is a direct result of this buying frenzy.
While this may be a natural evolution of the capitalist market system, the sheer volume of the Indian population makes this a scary proposition. Should India start consuming goods at the same rate as in the West, the world’s largest democratic market will also become the world’s biggest ecological crisis. We need to think of this potential crisis as an opportunity to skip ahead by a few decades. To by-pass the frenzied ‘consumerism for the sake of consumerism’ and maybe choose instead to be precursors of the wave of minimalism that is actually a part of traditional Indian thought.
As a movement, minimalism is just starting to make some noise in the more mature markets of the western world. However, it cannot and should not be defined by any lack of purchasing power of its participants. It is a question of educated choice and not of unavailable financial resources. It is a call to an intentionally simpler, more respectful way of life. It may be the millennial-inspired, Uberized consumerism of tomorrow, where the number of material goods amassed is less important than the overall quality of life and experiences lived. It is having less and doing more.
A critical element to be kept in mind is the fact that by 2025, 40 percent of consumption in India will come from the elite and affluent categories. Generally speaking, value for money and longevity of product life still holds some sway in India. If socio-political trends could be put into motion in order to encourage the production and sales of high quality, long life cycle goods and if this were to be made a condition for companies to be able to sell to the Indian market, we might just be able to balance our consumerist instincts and our massive population. It could at least be part of the solution. We need to make what is essentially a traditional way of life, repackage it so that it is appealing to the youth, the thought leaders and trendsetters of India. Instead of being colluders in the conspiracy of consumerism, would it not be really cool to make informed choices for quality over quantity. As the market that every company wants a piece of, the cards are stacked in India’s favour, but will the next batch of political leaders have the foresight to play them right?
“If we think long term, we can accomplish things that we wouldn’t otherwise accomplish. Time horizons matter. They matter a lot.” This too is a Jeff Bezos quote!
Nandita Sood Perret is a communications consultant and leadership coach at CTD Cultural Insights, where she helps people and companies break through old patterns, to develop new perspectives and innovative solutions for collaboration and growth.
Read Nandita Sood Perret's columns here
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First Published: IST