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1FEATURED INSIGHTS | UNDERSTANDING THE NEW INDIAN SHOPPER Copyright © 2014 The Nielsen Company

1

F E AT U R E D I N S I G H T S

U N D E R S TA N D I N G T H E N E W I N D I A N S H O P P E R A CLOSE LOOK AT FACTORS THAT INFLUENCE BUYING IN MA JOR PRODUCT CATEGORIES

BY: ADRIAN TERRON, EXECUTIVE DIRECTOR, NIELSEN INDIA MANOJ KULKARNI, DIRECTOR, NIELSEN INDIA

• SALES WORTH $20 BILLION CAN BE SWAYED EVERY YEAR WITH PROMOTIONS AND OFFERS, FORMIDABLE ONLINE BRAND PRESENCE, AND QUALITY INTERACTIONS

• AROUND 4 IN 5 MOVIE-GOERS CHANGE THEIR MOVIE PLANS TO TAKE ADVANTAGE OF DISCOUNTS AND OFFERS

• 3 OUT OF 10 CONSUMERS AVAIL OF LOANS EARLIER THAN PLANNED BECAUSE OF PROMOTIONAL OFFERINGS

• ONE IN 3 FMCG SHOPPERS GOES ONLINE FIRST AND THEN HEADS TO THE STORES TO BUY

• ALMOST HALF OF ALL AUTOMOBILE CONSUMERS IN THE COUNTRY NOW FOLLOW THE ROPO METHOD: RESEARCH ONLINE, PURCHASE OFFLINE

DELIVERING CONSUMER CLARITY

2 FEATURED INSIGHTS | UNDERSTANDING THE NEW INDIAN SHOPPER

Indian consumers today are spoilt for choice like never before. Thanks

to the energetic growth of the economy in recent decades, they can

pick from a wide range of products across industries that are actively

promoted in the country’s thriving media. And the explosion in the

number of choices has prompted consumers to turn choosy. Now

consumers are less likely to stay loyal to a brand unless it has something

special to offer.

Today, innovative planning and strategy can help companies and

manufacturers shift demand to the tune of $20 billion in key categories.

Our studies have shown that the spending patterns of consumers—

particularly those decision-makers who buy fast-moving consumer

goods (FMCG), movie tickets or automobiles, go travelling, take loans

or build independent homes—can be influenced to a large degree with

great deals, strong brand presence on the Internet, and productive

person-to-person interactions. Today, it’s crucial for companies to

stand out, and leveraging their means to get ahead in these three areas

can make the difference that matters.

• LEVERAGING DIGITAL • MAKING DEALS• QUALITY CONNECTIONS

UN-PLANNING THE PLANNING

FMCG MOVIE LOANS AUTO TRAVEL

80 75

57 57

42

Source: Nielsen

Figs. in %

OPPORTUNITY TO INFLUENCE US $20 BILLION SALESPercent buying different than planned


And as many as 80 percent of the moviegoers responding to questions

during our survey said they made changes to their movie plans to take

advantage of discounts and offers.

Similarly, promotions played a key role in attracting customers to loan

products. In fact, 31 percent of consumers avail of loans earlier than

they planned because of promotional offerings. Comparatively, more

than two out of five (44%) consumers wait for better deals before

taking out a loan.

‘DEALING’ RIGHT

Since promotions influence $10 billion worth of sales every year,

companies need to make the right pitch with intelligent deals that can

beat competition. Smart deals can change the minds of between a fifth

and half of all shoppers across several product categories.

Among people shopping for FMCG, for example, discounts and

promotions cause a large percentage to experiment and buy a different

product than planned. At least 1 in every 4 shoppers buys more due to

promotions offered.

AROUND 1 IN EVERY 3 CONSUMERS TAKE A LOAN EARLIER THAN PLANNED BECAUSE OF PROMOTIONS.

CONSUMER BEHAVIOUR ACROSS FMCG CATEGORIES

Source: Nielsen

% BOUGHT

% BOUGHT MORE THAN PLANNED

FRESH

92%

91%

94%

87%

89%

81%

84%

82%

87%

80%

STAPLESHOMECARE

PERSONAL CARE

PROCESSEDFOOD


We found that for most travellers, the key parameter for choosing

airlines and hotels was value for money and promotions, and not the

lowest cost. Travellers favour instant gratification: they prefer discounts

on current bookings and instant cash-back offers over loyalty points

and special services.

Even while buying building materials for independent homes, people in

Tier II cities prefer certain stores because of their proximity and better

prices. Though regional players have bigger roles in these smaller cities,

the behaviour of such consumers is a clue to what companies can do

to gain an edge.

NETTING CUSTOMERS

Indian consumers are increasingly relying on the Internet for information

prior to making purchases. Between a third and two-third of buyers

hook up to the Information Superhighway as part of their pre-purchase

activities. The volume of online sales may not be that impressive, but

hunting for information on the Web is extremely popular. Importantly,

influential affluent shoppers rely on the Internet for their information,

highlighting the need for companies to build brands online. The

influence of the digital space is estimated to be around $14 billion.

Source: Nielsen

Figs. in %

DISCOUNT ON CURRENT BOOKING

INSTANT CASH BACK

DISCOUNT OF FUTURE BOOKING

CASH BACK FOR BULK BOOKINGS

DISCOUNTS/CASH BACK FOR HOTEL+FLIGHT BOOKED TOGETHER

REWARD POINTS

SPECIAL BENEFITS/SERVICE

71

57

51

41

39

36

35

DEALS THAT MATTER: TRAVEL


The Internet has changed how Indians travel. An emerging trend

highlighted by our survey is self-booking of flights and hotels, many

of them online. In the last six months, 66 percent of Indians say they

booked their own flights compared with just 1 percent saying they never

had.

Source: Nielsen

Source: Nielsen

Figs. in %

Figs. in %

DIGITAL CAN DEFINE YOUR BRAND’S DESTINY

TRAVEL

MOVIE

AUTO

FMCG

LOANS

73 70

62

48

36

40

75

71

48

45

37

67

48

41

38 MALEFEMALE

BOOKED FLIGHTS ON MY

OWN

BOOKED HOTELS/FLIGHTS ONLINE

BOOKED A FLIGHT+HOTEL PACKAGE DEAL

BOOKED THROUGH A HOLIDAYING

COMPANY/TOUROPERATOR

MADE STAY ARRANGEMENTS

ON MY OWN

6655

38

2617 18

8

21

1 1

NEVERIN THE LAST 6 MONTHS

DIGITAL INFLUENCE OF US $14 BILLIONPercent accessing Internet as pre-purchase process


In addition, most Indian flyers comment on their travel on social media

websites. Around 69 percent of decision-makers interviewed said they

posted details of their travel on social networks using status updates,

photographs or videos. More than half of such travellers talked about

the destinations, while a slightly smaller number mentioned the

airlines. Hotels and airlines can capitalize on travellers’ high level of

online activity displayed to increase engagement with consumers for

brand advocacy.

Increased digitisation and use of social media networks has also

influenced the way Indians watch movies. “Earned” media from viewer

word of mouth and social networking are the most influential sources

of information for Indian consumers based on our study.

In addition, almost half of automobile consumers in the country now

follow the ROPO method: Research Online, Purchase Offline. Nearly half

of those who took part in our study said they searched for information

about automobiles online before consulting any offline sources. The

Internet has influenced word-of-mouth information sources as well,

since many conversations between shoppers and family and friends

have moved online.

“Technical specifications” topped the most-searched information list.

Consumers also compared different cars they were considering and

read expert reviews for their intended purchase. The Internet also plays

an important role when it comes to getting vehicle loans.

On a smaller level, consumers also use the ROPO method for FMCG

products. Our research showed that 1 in every 3 FMCG shoppers goes

online first and then heads to the stores to buy. And male shoppers are

more likely to rely on the Internet for purchase information.

CONSUMERS COMPARE DIFFERENT CARS AND READ EXPERT REVIEWS FOR THEIR INTENDED PURCHASE.


THE HUMAN TOUCH

In a world that is dominated by technology, human interactions have

become highly valued. And the sort of interaction that leads to great

purchase experiences can create a strong bond between the brand and

consumer. Half of those looking for loans and three out of every four

automobile buyers say they will change their preferences based on their

experience with company employees.

Even in the automobile sector, the key factor driving changes in

customer choices is the interaction with the salesperson at the dealer

showroom.

QUALITY CONNECTIONS

THE INFLUENCERS

SALESPERSONINFLUENCE

AUTO LOANSTRAVEL

BETTER OPTIONS/VARIANTS

OFFERS/SCHEMES

FAMILY/FRIENDSINFLUENCE

7360 51

15

Source: Nielsen

Source: Nielsen

Figs. in %

73% 61% 50%Percent claiming difference between plan / purchase due to staff interactions

8 FEATURED INSIGHTS | UNDERSTANDING THE NEW INDIAN SHOPPER Copyright © 2014 The Nielsen Company

Moreover, car buyers can be influenced right up to the last moment

of their purchase. Three out of five consumers said that they had

finalised on the model, brand and fuel type decisions before visiting the

showroom. However, when the time came to make their final purchase, a

considerable number of consumers also said they changed their minds.

And a third of buyers who said they had decided about fuel switched

from the decided type to another after talking to the salesperson, family

and friends.

While consumers decide most details before borrowing a loan, they

don’t decide all aspects. This is exactly where influencers can step in

and make final alterations and recommendations. The salesperson

can sway such last-minute changes by making better loan features,

promotional offers and additional information available.

We found that 45 percent of respondents changed the bank or NBFC

that they had originally planned to take a loan from. Similarly, nearly two

out of five (38%) changed the loan amount they had initially intended.

According to the study, more than half of the decision-makers

planning to build independent homes in Tier-II cities don’t know

which brands they are going to buy before visiting the stores. This

presents an opportunity for companies to influence them before they

make their purchases.

GET SET, GO!

Sales worth billions of dollars can be influenced every year by factors

that are in the control of companies. Based on our study, companies

need to invest in disruptive innovations in the space of promotions and

deals, online brand building and interactive showroom experience to

capitalize on such opportunities. By grabbing the attention of choice-

conscious urban Indian consumers, companies can reap big rewards.

CRITERIA CHANGE

Source: Nielsen

All figs. in %

CHOICE- BANK/DEALER/NBFC

LOANAMOUNT

INTERESTRATE

LOANTENURE

4555

38

62

29

71

26

74

NO CHANGE IN PRE-LOAN CRITERIACHANGE IN PRE-LOAN CRITERIA


ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and

measurement company with leading market positions in marketing

and consumer information, television and other media measurement,

online intelligence and mobile measurement. Nielsen has a presence

in approximately 100 countries, with headquarters in New York, USA

and Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2014 The Nielsen Company. All rights reserved. Nielsen

and the Nielsen logo are trademarks or registered trademarks of

CZT/ACN Trademarks, L.L.C. Other product and service names are

trademarks or registered trademarks of their respective companies.

ADRIAN TERRON

EXECUTIVE DIRECTOR

NIELSEN INDIA

MANOJ KULKARNI

DIRECTOR

NIELSEN INDIA

ABOUT THE AUTHORS

Punit Mittal from the Nielsen Shopper Team contributed to this issue

of Featured Insights.

This article contains excerpts from various thought leadership and

insights published by Nielsen’s experts. To view or download the full

reports, please visit www.nielsen.com/in

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