The Indian consumer and her purchasing behaviour is perhaps the most fundamental building block of the Indian economy. At a time when pundits and punters are interrogating the potential of the economy, it helps to look at some of the trends that have emerged clearly over the last year and will likely determine the way marketing moves forward.
Consumer sentiment has improved in the last quarter of 2013 with India moving to the second spot globally, trailing Indonesia, according to Nielsen Global Consumer Confidence Index, which is better than the year before. Towns with a population of less than 100,000 people have shown clear signs of revival. Though, growth was led by price hikes, reduction in unit pack sizes, discounts and premiumisation, there is always a silver lining. There was growth in:-
The growth of modern trade was driven by events. Event weeks centred around national holidays, by enterprising retailers are bringing in consumers to modern trade outlets, and turning out to be week-long shopping excursions. (Click for charts)
Private labels are also projected to touch $500 million mark by 2015. Consumers' ability to interact directly with retailers will expand private labels further.
Delighting consumers with a good experience can turn a plan into a purchase. Looking at affluent urban shoppers across sectors, it was found that on an average one in two shoppers change their mind from the time they decide to buy till the purchase. Knowing which factors motivate shoppers to action will ensure that brands stand out. In FMCG, 80 per cent of shoppers will buy a different item than originally planned. This could influence $20 billion of sales in a year. Positive staff interactions in the automotive sector, for example, prompted three-quarters (73 per cent) of shoppers to change their initial purchase decision.
Consumer sentiment has improved in the last quarter of 2013 with India moving to the second spot globally, trailing Indonesia, according to Nielsen Global Consumer Confidence Index, which is better than the year before. Towns with a population of less than 100,000 people have shown clear signs of revival. Though, growth was led by price hikes, reduction in unit pack sizes, discounts and premiumisation, there is always a silver lining. There was growth in:-
- Categories: Foods grew faster than overall FMCG (9 per cent) at 12 per cent.
- Pop-strata: Rural recorded the highest growth in 2013 at 12 per cent versus a year ago as opposed to the low 6 per cent witnessed in metros. Towns with a population of less than 100,000 people have seen 14 per cent growth in the fourth quarter of 2013, year on year.
- Channels: Chemists have emerged as an important channel for FMCG, growing at 13 per cent over 2012.
The growth of modern trade was driven by events. Event weeks centred around national holidays, by enterprising retailers are bringing in consumers to modern trade outlets, and turning out to be week-long shopping excursions. (Click for charts)
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Using analytics from Nielsen Scantrack, it was found that major festivals and events like Diwali and Republic Day display remarkable success in terms of sales. At an overall level, events contribute to 12 per cent of sales within these five markets and for these chains as a group. Delhi NCR and Mumbai contribute 13 per cent followed by Pune, Hyderabad and Bangalore. These work because brand awareness and proclivity to experiment increase.
Private labels are also projected to touch $500 million mark by 2015. Consumers' ability to interact directly with retailers will expand private labels further.
Delighting consumers with a good experience can turn a plan into a purchase. Looking at affluent urban shoppers across sectors, it was found that on an average one in two shoppers change their mind from the time they decide to buy till the purchase. Knowing which factors motivate shoppers to action will ensure that brands stand out. In FMCG, 80 per cent of shoppers will buy a different item than originally planned. This could influence $20 billion of sales in a year. Positive staff interactions in the automotive sector, for example, prompted three-quarters (73 per cent) of shoppers to change their initial purchase decision.