PECULARITIES & CHARACTERISTICS OF INDIAN CONSUMER

PRESENTED BY : ANGELA MARY GEORGE

SEMESTER-II, MBA (EVENING) IMK

KARYAVATTOM.

INTRODUCTION• With the growth of India’s middle

class and changes in its lifestyle, the quality and quantity of demand for retail of foodstuffs and daily goods are undergoing significant changes. While traditional Kirana (small shops) hold sway over the industry, accounting for more than 90% of the market, modern distribution stores such as supermarkets and hypermarkets of local conglomerates are also expanding rapidly.

CONSUMER GROWTH IN INDIA

The Indian economy is changing in profound ways by the onward march of its “consumers”.India’s ascendance as an economic power to reckon with has forced the world to unravel the mystery called India.An intriguing element of this mystery is India’s Consumer Market; characterized by diverse languages, regions, religions, and economic and social status.Consumer growth has, of course, always been a central engine of economic growth, but what is significant about the past decade is the acceleration in the pace of change.

Why Should Global Businesses Bother WithConsumer India?

India is a ‘guaranteed to happen’ growth story.

India has a majority of young people and a virgin market.

Low country risk: political and social stability.

Strong institutions: strong judiciary, legislature.

Change confluence: average Indian’s income is growing, India’s economic fundamentals are growing stronger

Why Should Global Businesses Bother With

Consumer India?

Rural India is decreasing its dependence on agriculture, the self employed population is making India a nation of vibrant achievers. China 2005=India 2015. Researchers predicts that India will have the same per capita income that China has in 2005 after 8 years.India is amongst the better destinations globally for investments and business.India is set to grow into the fifth largest consumer market in the world by 2025.

RAPIDLY GROWING SECTORS IN CONSUMER INDIA

INFORMATION TECHNOLOGY & COMMUNICATION INDUSTRYAUTOMOBILE INDUSTRYE-COMMERCE INDUSTRY OR ONLINE SHOPPINGRETAIL INDUSTRYINDUSTRIES UNDER WOMEN EMPOWERMENT.INDIAN FAST MOVING CONSUMER GOODS (FMCG) INDUSTRY

INDIAN CONSUMER MARKET TODAY

It is a market with three segments : The first comprises the top end with the mindset: “I pay more to get more”, where the purchase is driven by the emotional surplus that the consumer experiences. The second is the mid-level which thinks: “I get good value at a reasonable price”.More important, however, is the large block at the bottom which says: “I pay less and I get less” and is totally satisfied with that. This is probably a segment that many marketers tend to overlook since they feel that there is no existing demand there.

INDIAN FAST MOVING CONSUMER GOODS ( FMCG)FMCG’s are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries and grocery items.India’s rising affluence will drive the growth for FMCG firm over the next several years.Demand will grow by a strong 11-12% p.a. Rapid growth in India’s toiletries and cosmetic market will create opportunity for new players. Foreign firms that can add localization in their health and beauty products and leverage international expertise and well known brand names, will continue to have a competitive edge over domestic players.

INDIAN FAST MOVING CONSUMER GOODS (FMCG)

The industry has tripled its size over the past 10 years growing much faster than in recent decades. This has been facilitated by the many changes in the Indian economic and industrial landscape - reduced levels of taxation, easier import of materials and technology, reduced barriers to entry of foreign players, growing organizational maturity of Indian players, growth of media, and, of course, the growing affluence and appetite for consumption of the Indian consumer.

INDIAN FAST MOVING CONSUMER GOODS (FMCG)The market for cosmetics and toiletries and other personal care items is concentrated, with a few well-known brands dominating sales of shampoos, hair conditioners, Make-Up, fragrances and personal hygiene products. Growth in demand for most of these products is expected to be rapid in 2011-15, leaving scope for new companies to make inroads into the current market leaders’ dominance. Men’s grooming products, such as skin lightening creams, deodorants, facial cleaners and so on is an area that is showing steady growth.

ONLINE SHOPPING IN INDIA

On-line shopping is a recent phenomenon in the field of E-Business and is definitely going to be the future of shopping in the world. Most of the companies are running their on-line portals to sell their products / services on-line. Though online shopping is very common outside India, its growth in Indian Market, which is a large and strategic consumer market, is still not in line with the global market. As truly stated “Customer is the King today”, the concept of on-line shopping will not materialize if the customers are not benefited

ONLINE SHOPPING IN INDIAADVANTAGES

Customers can shop from any place and need not physically visit the shops/outlets for shopping purposes. Therefore, even if customer is staying in remote area, he/she can easily shop through internet.If a customer goes to any retail outlet or any other shop, the choice of products is normally very limited. However, here customers can visit any number of sites to reach at final choice. Hence, online shopping provides unlimited choices to the customers in nut shell.The customer can shop any day of the year on any time of the day. This also helps in customers’ time and energy saving. More over due to unlimited choice and less excess time, customers can easily search for the desired things and can easily compare the products/items.

DISADVANTAGESAs customer has unlimited choice, he/she can fall a victim to over choice. Customer may spend a good amount of time without taking any final decision. There is no “touch and feel factor” involved in on-line shopping.It is very much possible that customer purchases from internet by just looking at price, but ultimately may land up paying more due to transaction cost. Thus, these extra costs become very crucial in online shopping. One of the major options to purchase from Internet is through credit cards. However, it is quite possible that customers may fall victim due to security and privacy problems on the Internet.

ONLINE SHOPPING IN INDIA

INDIAN RETAIL INDUSTRY

For many foreign companies, the opportunity to capture a share of India’s rapidly growing retail sector is the most compelling reason to explore options for exporting to and investing in the country. With more than a billion potential consumers, a growing middle class, steadily rising household income, and an organized retail market valued at more than US$30 billion, India’s retail market is among the most underpenetrated and promising in Asia. According to some analyses, increasing income levels combined with moderating savings will cause India’s consumer market to quadruple over the next two decades.

INDIAN RETAIL INDUSTRYDespite the rosy hopes, some facts have to be considered to positively initiate the retail momentum and ensure its sustained growth. The major constraint of the organized retail market in India is the competition from the un-organized sector.

PECULARITIES OF INDIAN CONSUMER INDUSTRY

Burgeoning middle class, its changing values and pent up consumer demand.

 Changing women's roles, their labor participation and the changing structure of the family.

Rising consumer aspirations and expectations across many segments of the population.

 Increased consumer spending on luxury items aided by past savings and the introduction of the credit system.

New types of shopping environments and outlets

Media proliferation, satellite and cable TV, and the thriving film industry

Media proliferation, satellite and cable TV, and the thriving film industry. Media sophistication and familiarity with English language among media people and a wide segment of the population.High degree of consumer awareness and sophistication across different segments.The emergence of traveling Indian consumers immigrants in US and England, overseas workers, tourists, professionals and their exposure to world-wide consumer products.Strong domestic consumer goods manufacturing sectorThe emergence of the rural consumer sector.

PECULARITIES OF INDIAN CONSUMER INDUSTRY

CONSUMPTIONAL & CHARACTERISTIC TRENDS IN

INDIAN CONSUMERS

1. ECONOMIC GROWTH AND RISING DISPOSABLE INCOMES

• India is growing at an average annual rate of 7.6% for the past five years and it is expected to continue growing at an equal if not faster rate. The rapid economic growth is increasing and enhancing employment and business opportunities and in turn increasing disposable incomes Extreme rural poverty has declined from 94% in 1985 to 61% in 2005 and is projected to drop to 26% by 2025.

CONSUMPTIONAL & CHARACTERISTIC TRENDS IN

INDIAN CONSUMERS

2. PRO-GROWTH DEMOGRAPHICS

In India, the proportion of citizens of working age is forecast to fall slowly and the overall labor force will continue to grow. India has a young population, 54% of Indians are under 25 years of age. A young, economically empowered population not only translates into increasing consumer demand but also into a more value-conscious demand. Thus, pro-growth demographics will expand consumer market in India.

• ASPIRATION FOR A BETTER LIFE• As millions of economically deprived

households move into the lower strata of the middle class segment, they will begin to be able to afford and demand products and services beyond food and clothing. Increasing penetration of media and infrastructure facilities will expose the rural India to urbanized lifestyle and fuel the latent desire for improved living standards

CONSUMPTIONAL & CHARACTERISTIC TRENDS IN

INDIAN CONSUMERS

CONCLUSION• The Indian consumption patterns are

slowly converging with global norms. The Indian consumer is now spending more on consumer durables, apparel, entertainment, vacations and lifestyle related activities. Entertainment, clothing and restaurant dining are categories that have been witnessing a maximum rise in consumer spending since 2002.

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