New year, new consumer
The Indian consumer has been on the radar for brands across the world. With the country still showing healthy growth rates amongst a sea of gloom, brands from categories ranging from budget to premium have been looking to the Indian consumer for growth.
The Indian consumer hasn’t disappointed them. From mega metros, to large cities and right down to tier 1 and 2 towns, the Indian consumer has displayed a voracious appetite for innovations, quality and value. This cornucopia of choices has fed the escalating appetite of the liberated Indian consumer whose needs and wants have merged into an incessant thirst for more.
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The key question on every leader and marketer’s mind now would be, “How will the Indian consumer behave in 2017?", considering the “cashless" thrust of the government and an overall positivism emanating from the idea of “elimination of corruption". Will the current slump from demonetisation be met by a fierce return to consumerism with remonetisation?
A friend I was talking to, who heads marketing for a large durables category, shared with me their internal belief that the consumer is actually going to come back with a vengeance. They believe this deprivation from demonetisation will be shattered by a return to active consumerism and the average Indian will actually spend more than they normally would to actively celebrate the return to normalcy. They are even planning some high-powered launches in the first quarter next year to be ahead of the curve and in fact be the lubricant to this much anticipated slide into extravagant consumerism.
While for the sake of our economy and for the health of our clients, I hope the situation is that simple but I believe a fundamental change is afoot that may get our consumers to behave like they have never ever.
Unlike our catchphrase-loving politicians, who copy the popular without thinking, demonetisation was not a “surgical strike". A “surgical strike" is geographically focused and carried out with precision to exact clearly defined quantifiable results.
Notebandi was not surgical in nature at all — it was more chemotherapy. It affected every exposed area and struck everyone equally in the hope of killing corruption. And as every doctor who administers chemotherapy says, only time will tell if the consumer will recover.
In effect, our young consumers have experienced something they never did before: deprivation and scarcity. It took 40 years for the Indian consumer to move from a need-based buying behaviour to a want-based behaviour. It took 40 years for the consumer to finally cry out, “Yeh dil maange more!" That opened the floodgates for every category in India. People didn’t only want new things; they wanted them in every colour, style, size, season and then they wanted it even better, improved. “More" moved to upgrade and innovate. Brands across categories revelled in this desire to possess, own, experience and consume the elixir of freedom and choice — unlike their grandfather’s generation, brought up in scarcity and deprivation where saving was a virtue and “wanting" was seen as depravity.
This sudden and forced introduction to deprivation and scarcity, especially with fiscal capability, can result in unpredictable behaviour. The fountain of consumerism had been the easy availability of money. With the fountain drying off suddenly the consumer is not experiencing any change in lifestyle. This coupled with the fact that readily available cash is no guarantee in life may lead to introspection and the consumer may begin to distinguish between needs and wants and whose wants may begin drying off. The upgrade-now behaviour may give way to a maybe later culture.
I may simply be shooting the breeze here, but as I said earlier, only time will tell and I genuinely hope my friend’s estimate comes true and we encounter spending with a vengeance in the coming year. The author is CEO, India, Publicis Capital