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consumer a quar terly repor t by technopak MARCH’ 09 / VOLUME 2 Nine Trends for India 2009 .


the prevailing sentiment amongst the middle class is that of uncertainty and fear.. Similarly. the global economic crisis had its impact with FIIs pulling out money from the stock market.. Later on.with the siege of Bombay being the latest and in many ways the most frightening. If we examine the larger picture. The number of people actually laid off in India is miniscule. with the number of people working in the organised sector at barely 2% of the total workforce. Guwahati. Ahmedabad. salary cutbacks and freezes on hiring. while according to a source at a leading kitchen appliances MNC. India and Indian companies are probably reacting in a sharperthan-required manner. the involvement of Indian consumers with the stock market is less than 5%. Mindscape. Jaipur.based consulting arm. The expected GDP growth is still 7%. with the majority of people still relying on traditional financial instruments like fixed deposits and bonds.Overview 2008 was an eventful year for India in several ways. The daily news about globally iconic companies now begging for government handouts and numerous announcements of layoffs have created an atmosphere of ambiguity. Technopak’s consumer . The FMCG sector is one such. many sectors have shown phenomenal growth. India witnessed many more acts of terrorism across its cities – Delhi. . The bulk of people in India are self-employed. Inflation reared its ugly head early on and prices of commodities. Mumbai. However. not a mean rate of growth for such a large economy. Newspapers reported various incidents of middle class families which had lost money in the stock market and now were facing the prospect of poverty. the durables sector too has shown fast growth. The global meltdown has had its impact on India’s richest: India’s 40 richest people’s net worth has shrunk from $351 billion a year ago to $139 billion. While it is true that the manufacturing sector has slowed down. food items and fuel went soaring up. did some brainstorming and consumer interviews to come up with 9 key behavioural trends for 2009. Several Indian companies announced layoffs. Property prices began to tumble.

money. Subsequent issues will look at specific areas of consumer spending and the trends and opportunities therein. dear 09 . money… 01 TREND 2 Fear Factor… 02 TREND 3 Family Ties 03 TREND 4 Small Wonder 04 TREND 5 What’s In a Name? 05 consumer ©Technopak Advisors Pvt. Consumer Outlook is a quarterly feature from the Mindscape team that explores the changes in the Indian consumer’s mindset and provides insights into the opportunities that the evolving Indian consumer offers.Contents TREND 1 Money. TREND 6 I Have Confidence in Me… 06 TREND 7 Diamonds are Forever 07 TREND 8 Lucky Star… 08 TREND 9 I’d do anything for you. This issue of Consumer Outlook examines the broad trends we foresee for 2009. Ltd.

Discretionary spending is likely to continue falling over the next year if consumers don’t hear some good news on the economic front soon. Many of them may turn away from modern retail to traditional kirana shops which could offer discounts based on knowing their clientele. Thinking twice before spending every penny and tightening the purse strings will be the norm. toys and gifts dropping in the last three months. (Boston Analytics Consumer Sentiment Index) monthly consumer sentiment index. as evident in the BASCI. which hit an 11-month low in November. From an attitude of wanting to boast about how much they spent on the latest Louis Vuitton handbag. People are saving up and paying cash rather than whipping out the credit card. Help consumers feel smart about getting better bargains through innovative schemes and promotions. as even liquor shops and bars are seeing fewer footfalls. Many retail firms including the Future Group are talking about expanding the network of discount stores in their chains. money. Indians have already begun to spend less and save more. money… In the past few years. Rental services like online libraries for books and movies will see a spike. Leisure. kitty party conversations are now about how much they saved on a particular item by being canny. or credit periods which would be a boon to the harried housewife trying to manage a shrinking budget. multiplex tickets and foreign holidays were becoming more common. Malls are already wearing The Opportunity: Up-front the value a brand offers the consumer. and waiting for the annual sales rather than buying on impulse. what’s likely to happen is that consumers will continue to focus on pruning unnecessary expenses and shop with a list. Landmark has seen sales of music. However. Over the next year. BASCI has been declining since June signalling consumers’ pessimism and fear about the current and expected state of economy. a deserted look. is seeing a huge upswing in footfalls. Big Bazaar in fact. entertainment and purchasing activities will decline. Indians had been earning more than ever before and spending equally well. Big entertainment could still tempt punters while smaller marque names won’t see much of a turnout. Desperate consumers are however not drowning their sorrows in drink. While the middle class always valued promotional offers and could be swayed by them. with the economic downturn. Living on EMIs was becoming the norm for young people. restaurants and stores are facing up to 75% drop in clientele. Discount retailers are already talking about an upswing in their footfalls and sales levels. eating out.TREND 1 Money. Enhance the aspirational value of brands so the consumer feels better about spending. as consumers across income classes try to stretch their rupee farther. people will revert to the traditional type of consumption. movies. today even affluent consumers are carefully scrutinising on-pack information to opt for better value deals. Splurges on branded products. 01 . Retailers and brands who can offer better value for money and communicate their added value better should see an increase in footfalls.

as people prefer to flock there rather than to prominent venues like multiplexes. As a result. The Opportunity: Brands and products which empower the consumer to feel safer. as families shy away from shopping at big outlets in malls. as people don’t want to take the risk for something smaller. people are feeling more and more fearful for their own lives and those of their families and taking pre-emptive measures to protect themselves. now they are getting 500 calls daily.TREND 2 Fear Factor… Since September 2002 to November 2008. Standalone cinemas could see a boost in ticket sales. as families ensure that each and every family member is able to stay in touch whenever they are out of the house. consumers will actually become more cooperative when faced with security checks! Many outdoor service industries have felt the pinch after 26/11. The manager of Detech Devices Pvt Ltd claims they used to get around 50 inquiries per day. Enhancement and highlighting of product safety aspects. Many small budget movies which don’t have star value have suffered as a result. as their families want to ensure they are able to be contactable at all times. As a result of the state of fear. Best of all. The penetration of mobile phones is likely to see a surge both among the youth and the elderly. More than 600 people have been killed and hundreds injured in the last six years. malls. companies in the security business are finding a new burst of popularity. India has witnessed 19 terror events. 02 . especially the base-level models. The multiplexes of Mumbai saw less than 30 per cent occupancy during the weeks after 26/11. and employees of the cafe say it’s because people are just not coming out of their homes. Security devices for the home will see a big boost in sales. multiplexes and offices are inquiring about security agencies for their establishments. The Hard Rock Cafe has seen huge cancellations of bookings post 26/11. hospitals. culminating in the 26/11 attack in Mumbai. Parties are more likely to shift to private venues like farmhouses and homes rather than five star hotels. especially on festivals. Consumers also want to buy safety devices for their homes. Clubs too are seeing reduced footfalls as people prefer to stay at home with their families. Traditional kirana stores would again benefit. This is illustrated by the reduced footfalls in public areas. Hotels. What’s likely to happen over the next year is an increase in sales of mobile phones.

board games. movies that families can watch together. the home more than ever becomes the place for people to congregate. RTE versions of exotic cuisine… 03 . to stay close to their loved ones. As it is... parks etc. Marriages could get postponed to a later age as people want to feel secure in their earnings before they get married. The fear of going out to popular and crowded public places further serves to bring the family closer together. Products that enable the family to bond and have fun while staying at home – popcorn tubs. inflation. terror – all of them have created a state of anxiety and uncertainty in which people are naturally drawn to their families for emotional support. DVD rentals and sales of home theatre systems will rise as people want to enjoy the movie experience but at their own pace. The length of the stay is likely to increase further. People will want to cocoon themselves within its four walls. family offers at restaurants. Ordering food in will become more common as families prefer to eat in the safety of their homes. The Opportunity: Target the family as the purchase unit. financial crisis. it’s common in India for youth to stay with their parents even after they have begun working. Given the uncertain world outside. delivery of icecreams and other fun foods. Products targeted at family consumption rather than individual consumption are likely to do better in these times – family packs of snacks and RTEs. with economic uncertainty looming. Create opportunities for people to have fun with their families in safer environs – clubs. Now people will be willing to go the extra mile in making their homes all the more interesting for all family members to hang out in. to insulate themselves from the harsh realities of the outside world. Economical slowdown.TREND 3 Family Ties Difficult times have the ability to bring families closer physically as well as emotionally. This will have an impact on the age at which young people want to move out of the parental home and become independent. becoming more comfortable as well as good looking. Homes have already undergone a change in recent times. rather than the individual.

04 . and therefore. coined the term ‘lipstick indicator’ which is what happened when the economy gets tough .lipstick sales go up. RTE food. India has always had a thriving trade in second-hand goods. Vacations may either be downsized to long weekend trips to nearby destinations or trips to visit relatives. whether they need to do so or not. And only brands which make a conscious effort to help them do so will continue to rack up sales in the next few years. no one wants to become an ascetic. Chocolate sales and those of other inexpensive treats will rise – microwave popcorn. Leonard Lauder. fashion and other categories considered as ‘frippery’ but continue to spend on small items like lipstick and nail polish. Walks will become more popular than visits to the gym. People would go shopping in their friends’ closets rather than to stores. DVD. Have small-sized packs of indulgence products. as will brown goods. a la Craig’s list. the chairman of Estee Lauder. or have an organised buy-back/ exchange program. and get a massage from the ‘maalish waali’ rather than going to spas. There is a tradition of passing down everything from clothing to utensils to needy members of the family. we prophecy that the next couple of years will see a rise in small indulgences. Consumers cut down on their spends on expensive creams. as they cost much less and yet feel like an indulgence.TREND 4 Small Wonder In times of economic slowdown people are no longer able to afford all the luxuries they have been used to. Downsizing will be in the form of having coffee at a Café Coffee Day rather than expensive meals at restaurants. Music CDs and movie CDs or DVDs may find a market. Create forums for exchange of used products. Women will colour their own hair rather than getting it done at a parlour hand market. However. Children will be indulged with more candy but less expensive toys. watching the latest movie on cable or DVD. be it face cream or expensive chocolates. Consumers will feel the need to demonstrate their own sense of control over the purse. The Opportunity: Combine enticement and affordability in the brand – communicate the enticement and demonstrate affordability. This is going to become much more of a need and consumers will be more accepting of second-hand goods in more categories – white goods sales may rise in the second People will look for cheaper entertainment options and cheaper ways of pampering themselves and their loved ones.

I would have gone to a Reebok or Adidas and swiped the credit card for some 3-4000 rupees. I promptly went and bought them. on the way. Brands and retailers working together to create special branded store-brands which offer the same brand value but at the store price. a former senior professional in advertising. and similar growth rates are The Opportunity: Continue investing in brand building so that when the good times come back. Says Jayshree Sundar. but evaluating where brands are not indispensable. As the shift from branded products back to the market is a bit harsh for many customers. 300. People are not shifting away from brands per se. Earlier. “My daughter needed floaters for her school camp. From needing the emotional payoff of lifestyle or lifevalue similarities. Then. Brands will need to offer more real value than ever to ensure that consumers stay with them. consumers are turning to valuing the rational payoff of a better deal. 05 . we spotted a small street market which had unbranded floaters for Rs. Focus on ensuring that brands move towards MOC / MOUs that are brand-indispensable.” being noticed by other retailers too. consumers are more concerned about getting good value for their money and will eagerly turn to unbranded products that offer similar functionality in many product categories. private label brands may find a huge opportunity. and I’m proud of myself. But this time.TREND 5 What’s In a Name? People were slowly turning to more and more branded products. Private labels with the twin offer of quality at a fair price. there is a substantial ‘aspiration bank’ from repressed consumers. I told her we’re only going to Bata. But at a time when they are trying to economise. as much for their badge value as for the purported quality that brands promised. For example sales of private labels in Vishal Megamart jumped from 5-6% of total turnover to 1718% in the last 3-4 months.

Also. Help the consumer be in control of their access to products and services. 06 . they need the brands and the companies they buy from to be accountable and to show accountability. The state elections which took place immediately after 26/11 also saw amongst the highest-ever voter turnouts in Indian history. The mobile phone has suddenly given Indians everywhere. People want to take control of their own lives to a much larger extent. have had an impact on people’s perception of their own power. Media too has jumped on the bandwagon. a voice and information at their fingertips. Individuals are feeling a sense of entitlement to their rights as well as more secure in their power to be the change that they want to see. brands and products which help the consumer gain a sense of control over their lives are likely to see an upsurge. In recent weeks. announcing the arrival of an era wherein citizens are eagerly exercising their rights. The Angry Young Man of yore has given way to the determined young man or woman who has managed to fight the system and get his way. India too has been seeing a slow rise in social consciousness over the past few years. both from government and from business. small villages to large metros. The Opportunity: Empower consumers to participate through feedback and dialogue in the process of product enhancement and correction.TREND 6 I Have Confidence in Me… As people become more economically secure. as the recent example of the Hindustan Times’ series on the lack of infrastructure in Gurgaon demonstrated. Incidences like the Supreme-Court-granted-power to fly the Indian flag. Particularly at a time when consumers are finding their purses under threat. one has seen much more of this kind of activism. as consumers ask for increased transparency from India’s corporates. for example. This will have a rub-off on companies and brands as well. due to a legal battle by one person. be it in terms of security or finances. they start demanding much more accountability and transparency. Moreover. people have slowly seen a rise in the power of individuals to make a difference. As a result. The RTI legislation too has been important in giving the average citizen a sense of much-needed control and the ability to ask the government machinery to be transparent in its decision-making. they become much more confident in themselves and at the same time have an increased awareness of their rights. espousing causes and getting the government machinery to act. Many brands including Idea and Tata tea have already started capitalizing on this new spirit through their communication. be it the various citizen’s groups which sprang up after 26/11 the demonstrations in the big cities which were unique for having many middle and upper middle class participating voluntarily rather than the paid rent-a-crowds of political parties. This is likely to increase substantially in the future.

Just recently. art or commodities. when nothing else seems to be stable. Have promotional offers involving gold and silver coins with other products. all of a sudden almost all asset classes seem to be in a freefall.TREND 7 Diamonds are Forever In the last few years. As long as gold prices remain at a viable level.3 million. At times like this. These are also seen as assets which never depreciate and which can then be exchanged or sold off in case of dire need. silver utensils and even gold biscuits. the jewellery sector might expect a boost of even 25-40 percent! Ordinary consumers are rushing out to invest in gold and diamond jewellery. 07 . Assets that are real and tangible and that the consumer can keep under his strict gaze. be it stocks. there were few asset classes which were not rising. However. Christie’s sold a 36-carat diamond for the highest ever price of $24. one expects the upsurge in gold and jewellery sales to continue. real estate. claiming at the same time that the first half of 2008 ending with jewellery sales of $226 million was “the best jewelry season ever seen at auction. and these categories of products are likely to see a real boost in the next few years. and the only ones holding their heads up are Gold and silver. traditional investments like gold and jewellery seem extra attractive. The Opportunity: Highlight the investment nature of gold and jewellery products to make it easier for consumers to rationalise their purchase.” As per the Retailers Association of India.

they are going to turn to spirituality or superstition. New-age spiritual beliefs as well as superstitions are going to become stronger. to ask for a bail-out. Since people don’t know what rational means they can personally use to bring more stability into their lives.TREND 8 Lucky Star… When companies face turbulent times. The number of people going to ‘futuretellers’ like tarot readers. ways of bringing in good luck and repelling bad luck have been becoming popular. religion. Be it Feng Shui or Vaastu. palmists. When consumers face uncertain times. Newspapers and magazines are showing more ads for things like healing crystals or good-luck rings all meant to boost career and money. they turn to the Supreme Power. horoscope readers or Naadi readers is also going to rise. and give them a webcast of the same. religion is poised to get a huge boost in terms of adherents. Integrated puja services or online services which would perform the right pujas at the right time for interested consumers. The Opportunity: Vaastu or Feng Shui compliant properties. Sites like astrologyzone and other ‘divine intervention’ websites are suddenly seeing a lot more traffic. they turn to the government. Now that bad times seem not only certain but what seems even more uncertain is when those bad times will be over or how bad they are likely to get. and this is only going to increase in the next few years. 08 .

where conservatism was the order of the day. dear As brands and corporate see consumers becoming increasing watchful of their spending. Consumers seem to have gotten off the greed bandwagon that characterised consumption in recent years and want to get back to a time when the act of consumption was more considered and rational. The frequency of mailers and communication from the brand to the consumer has gone up already and promises to increase. More brands will be on the lookout for such tieups which help manage the cost of the outreach programs. What will be interesting is to observe whether the heightened levels of attention and service remain constant once the economic crisis subsides! The Opportunity: Build a closer relationship with the consumer which can continue long after the slowdown is just a memory. A lot more time and money will be spent below the line on strengthening CRM programs and getting more consumers into their net. Many brands are trying to tie-up with like-minded and positioned brands to provide more package benefits to consumers. This has already begun in various service industries. they will go out of their way to bind the consumer closer through consumer relationship management programs. with brands from Jet Airways to Kingfisher making more strenuous efforts than before to woo travellers. and more ready to switch brands or service providers for financial reasons. as brands try and retain their goodwill bank.TREND 9 I’d do anything for you. 09 . To Sum Up: Overall there seems to be a move in values and lifestyles to those of the 70s. Brands that speak to those conservative values or that help the consumer continue to ‘live the good life’ while enabling him to spend like the old days should do well. Use the closer relationship to build differentiation. provide access to more consumers and help build in more loyalty.

com . Indian and global markets.com Parameswaran Venkataraman param@technopak.reddy@technopak. Mindscape was set up to cater to the growing business need for foresight into how consumers and shoppers are likely to evolve. please contact: Preeti Reddy preeti. Mindscape’s mission: To catalyse business growth through consumer insight. what they will want tomorrow and how best to translate this ‘buyer desire’ into business wins.balasubramaniam@technopak.com Vandana Maithani vandana.com Sushmita Balasubramaniam sushmita.narendra@technopak.maithani@technopak.com Priyadarshini Narendra priyadarshini. Drawing from Technopak’s unmatched understanding of industry. Mindscape offers a bouquet of innovative services: • Enhancing space productivity in partnership with Envirosell • Innovation and design research and product design in partnership with Foley Designs • Industry reports through our in-house intelligence wing. Mindscape is uniquely placed to integrate present and future business strategy with best practices in consumer insights.Mindscape Mindscape is the strategic consumer insights division of Technopak Advisors. retail environments. The Knowledge Company • Branding and communication strategy In order to learn more about Mindscape and how we can add value to your business.

we worked with 90 Clients across 127 projects. Fashion (Textiles & Apparel). Food and Agriculture. we are strategic advisors to our clients during the ideation phase. we have offered services to have far reaching impact on client businesses.About Technopak A leading Management Consulting firm offering strategic advice. special customized teams for each project depending upon the client’s requirements. competition mapping. consumer insights and capital advisory. International benchmarking and clients capabilities • Corporate Strategy • Organic Growth Strategy • Growth through Partnerships and JVs • Value Based Management Consumer Insights Holistic consumer understanding applied to offer implementable business solutions • Shopper Insights • Trend Insights • Innovation and Design Insights Start-Up Assistance Leveraging operations & industry expertise to ‘commission’ the ‘concept’ on a turnkey basis • Design and Build Start-up Organisation • Assist in Installing Business Infrastructure • Develop and Implement Business Processes Performance Enhancement Operations. industry & MOC expertise to enhance the performance and value of client businesses • Organisation Effectiveness • Productivity Enhancement • Supply Chain Improvement • Cost and Capital Efficiency • Sourcing base Effectiveness Capital Advisory Supporting business strategy and execution with comprehensive capital advisory in our industries of focus • M&A • Due Diligence – commercial & financial • Fund Raising • Corporate Finance . Our team currently comprises of 200+ skilled professionals from leading International and Indian engineering and management institutes. implementation guides through the start-up stage. Most of our consultants have hands-on industry experience in their fields of specialization and represent a wide variety of functional backgrounds. in 20 countries besides India. Healthcare. across 5 continents. Over 70% of our projects come from repeat clients. Hospitality. Consumer Products. performance enhancement impetus. start up assistance. to leading Indian and International companies. Entertainment and Real Estate sectors Since our inception in 1991 as a Management Consulting firm across diverse industries. and trusted advisor overall. In 2007. Founded on the principle of “concept to commissioning”. Education. operating in Retail. we consult with clients across the world. From offices in Gurgaon (National Capital Territory of Delhi). by offering end-to-end solutions that are unique due to our rich experience. strong industry relationships and a global footprint. This enormous knowledge and talent pool enables Technopak to create. With a team of established domain experts at work. Technopak builds and enhances business capabilities for leading Indian and international companies. Services We Offer Business Strategy Assistance in developing value creating strategies based on consumer insights. Thane (Mumbai) and Bangalore.

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