A changing India

MARKETMIND

Some interesting developments have been taking place in our country in recent times. A 79 year-old leader is being projected as a 'youth icon' in the forthcoming general elections.

Students and industry leaders are highly vociferous in expressing their (adverse) reaction to the recent moves by the HRD ministry to reduce fees at the IIMs.

Role models for the new India include Preity Zinta, Shahrukh Khan, Sachin Tendulkar, Arun Jaitley, and Narayana Murthy. Relatively conservative magazines like The Week carry special issues on the subject of 'love'!

In 2004, estimated value of cell-phone ring tone downloads is likely to be Rs 400 crore while the 'Valentine's Day' business is likely to cross Rs 1,500 crore.

Preferred career options now include some really interesting ones such as Vj-ing/Rj-ing/media related professions/biotechnology/sports and sport management/image management/fashion stylists/environmentalists/fitness and yoga instructors etc.

What has changed? If it can be explained by any single phenomenon, it would be the dramatic change in the demographic profile of India. Almost unknown to many of us, India has become the youngest nation in the world in terms of the age of its population.

There are over 500 million Indians below 21 years of age leading to a median age of the country at an astonishing 24 years! By contrast, the median age in the USA is 36, 30 in China, 37 in Russia, and 38 in the UK. Even in 2025, India's median age would be just 31 years while the rest of these countries would have moved up to 39 "" 44 years.

Such a young population, with a significantly enhanced access to education as compared to their parents, significantly enhanced exposure to the world outside India due to the very high penetration of electronic and print media, and a visibly increasing level of self-confidence on account of emerging successes of India in IT and other sectors, is behaving very differently to what most 'experienced' professionals would have imagined or known.

The changes in demographics can, simply put, explain almost everything that is happening around us in India these days including the very sudden emphasis of the ruling political alliance on 'development' issues rather than the traditional ones, and a sudden increase in the prominence of its younger leaders.

The young India is redefining value perceptions "" almost concurrently upgrading its aspirations and spending levels on product categories such as consumer durables, telecommunications, home, education, personal transportation, and leisure while downgrading (in terms of spending levels) on food and grocery, clothing, and jewellery. The young India is redefining its relationship with brands "" adopting new ones while discarding traditional ones.

The young India is redefining the shopping high street, giving resounding acceptance to new generation formats such as malls having integrated shopping/entertainment/eating, as and where such options make their presence.

With over 600 new shopping malls likely to make their debut in the next five to six years, the entire consumer shopping behaviour across the country would undergo a very dramatic change. By the way, these changes are not only confined to metros or a select few large cities.

At a recently concluded retail summit in Delhi, the CEO of one of India's largest (and highly successful) consumer product companies mentioned that his company has found little difference in the response to their products and core value proposition between customers in Rourkela and Delhi.

How should Indian companies engaged in the business of offering consumer products and services react? The starting point has to be an acknowledgement of the fact that India is changing and therefore they must change with India.

Likewise, it would help Indian companies to accept that the Indian consumer is changing, and hence they have to change with the consumers. This would, in many cases, imply going back to having a new look at the very basics of their businesses and then in some cases, creation of new products/services for these new consumers.

Once these new products/services have been created (with the appropriate value proposition), in many instances the distribution and retail channel strategy (and the communication strategy) may have to be redefined.

The leadership of all businesses must make a conscious effort to 'think young' and encourage 'young'. The new India offers incredible opportunities, and this itself should be motivation enough for established businesses to change!

Arvind@ksa-technopak.com