THE INDIAN CONSUMER

 950 million people-166 million households

 18 million added each year

 28% urban & 72% rural

 STRUCTURE OF THE MARKET

THE VERY RICH

I Mn HH
(6 Mn people)

CONSUMING CLASS 30 Mn HH
(150 Mn people)

THE CLIMBERS 50 Mn HH
(275 Mn people)

THE ASPIRANTS 50 Mn HH
(275 Mn people)

35 Mn HH
THE DESTITUTE (210 Mn people)
 THE MECHANICS OF THE MARKET
 Consumption, not income, differentiates consumer
segments
 A six-million-strong super-rich class has emerged at
the top
 The middle class comprises three different segments
 Consumer durables are purchased by upto 30 million
households
 THE MECHANICS OF THE MARKET

 Non-durables are being bought by upto 90 million

households

 Watches, cycles and cassette recorders rank high in

terms of priorities.
 RANKING OF DURABLES IN TERMS
OF DEMAND
1994-95 2006-07 (ESTT.)

Wrist Watch 1 1
Bicycle 2 3
Cassette Recorder 3 2
Transistor 4 7
B+W TV 5 6
Pressure cooker 6 5
Two wheeler 7 4
Mixer grinder 8 10
Refrigerator 9 9
Colour TV 10 8
 A YOUNG CONSUMER MARKET

(% in the age group)

Age Group India USA

0-25 years 58 30
25-45 years 25 18
45-65 years 13 40
> 65 years 4 12
 THE URBAN RURAL DIVIDE IN THE
WATCH MARKET
(No. of watches per ‘000 households)
Type of watch Rural Urban

Mech. Watch 732 1016

Quartz Watch 194 560

 THE MARKETING IMPLICATIONS

 There is no single customer profile even in the middle

class.
 There are three categories in this class withdifferent
levels of needs and wants.
 All three categories demand functionality (value) in
preference to brand image.

 Which means - a basic rethink of marketing strategy

 THE MARKETING IMPLICATIONS

 With the mass market sliced into three segments, the

majority of Indian consumers are ruled by
functionality more than image
ESTIMATED WATCH OWNERSHIP
IN INDIA
(per ‘000 households)
Income Class Ownership Ownership Average
(000 estt. 2001- estt. 2006- annual
Rs/year) 02 07 demand
< 22.5 Low 712 715
22.5-45 Low Middle 1480 1520
45-70 Middle 1939 2041
70-96 Upper 2288 2312
Middle
> 96 High 2651 2656
TOTAL 1478 1772 9.4 m
 ON TOP OF ALL THIS THERE IS
CHANGE

 Socio- economic change

 Technological change

 Government induced change(as against Jaya

induced change of government)
 WITH IMPLICATIONS FOR:

 Manufacturers and brand owners

 Retailers
 Distributors
 After sales service providers
 SCENARIO IN 2001

 Info tech will be the most potent change agent

 Access to info and entertainment will be of a different
magnitude
 Needs and aspirations are going to be better defined
 Smaller cities are going to increase in significance
 Lots of products/ services
 THE MARKET IN 2001

 Many more brands fighting for “mind-space”

 More prominent segments
 Your shelf-space will gain enormous premium
 Value “deliverance” will be as important as value
addition
 Greater opportunities to address and reach the
consumer
 IN SHORT - A PROBLEM OF “MORE”

 MORE VARIETY
 MORE VALUE
 MORE BRAND
 MORE CONVENIENCE
 MORE SERVICE
 “MORE” OPPORTUNITY

 More consumers
 Who are more willing to spend
 And who will have more money

BUT ON WHAT?
AND WHERE?
WHAT IMPLICATIONS FOR YOU?

MORE WATCH SHOPS

 EUROPE

SALE 75M WATCHES/YEAR

NO. OF OUTLETS 54000
SALE PER OUTLET 1400 WATCHES/ YEAR
NO. OF OUTLETS
PER M POP. 144
INDIA

NO. OF OUTLETS 12000

OUTLETS PER M. POP 13
 HOW MANY OUTLETS FOR
WATCHES?
 SALE IN EUROPE IS 3.5 TIMES INDIA

 OUTLETS PER MILLION IN EUROPE IS 10 TIMES

INDIA

 AT 50 PER MILLION POPULATION WE WILL NEED

ABOUT 50000 OUTLETS
CHANGING FACE OF DISTRIBUTION
SEGMENTATION
AS SEGMENTS EMERGE WATCH RETAILING
WILL ALSO NEED TO SEGMENT
CHANGING FACE OF DISTRIBUTION
NON WATCH SHOPS

As watches become more lifestyle oriented

other retailers will emerge
CHANGING FACE OF DISTRIBUTION

Co-operation of like minded retailers to

service like minded consumers
CHANGING FACE OF DISTRIBUTION
TECHNOLOGICAL IMPACT

 Direct marketing
 Catalogue selling
 Home shopping
 Cyber shopping
CHANGING FACE OF DISTRIBUTION
THE URBAN-RURAL DIVIDE

Distribution to play a key role in closing the

gap.
 IS THERE PROFIT ?

 Turnovers will increase

 Service levels will improve
 Stock will be better managed
 Margins will improve (and so will
undercutting)
 SO WHAT IS TO BE DONE ?

 THINK LONG TERM

 THINK QUALITY
 THINK VALUE
 THINK CUSTOMER
 CONCLUSION
 Customer......

 Dealer.......

 Government.......

 Lekin Titan......
 HUM SAB EK HAIN!!

Saathi haath badhana.......

The journey is long and the road bumpy but

together WE CAN MAKE IT HAPPEN
Thank You