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Indian Consumer – Really Hard Nut to Crack?

October 1st, 2008 by Amit Singh

“The Indian consumer is a damn tough customer”, said a senior manager a large retailer in India.

But is it really so?

  • Let’s understand that the Indian consumer is “value conscious” and not “cost conscious”: She’ll buy extra kgs of rice for a discount but not atta (the quality of properly stored rice enhances with time; atta deteriorates …… she knows it). The discount offered should definitely be higher than her “return on capital” involved in buying the inventory (however miniscule the capital involved may be).
  • The Consumer is Smart: If we try to sell him a branded pressure cooker at 15% discount on printed price and he does not buy it, let’s understand that he has done his homework very well; he knows that 25% discount on printed price is available in every local “kitchen shop” that he goes to.
  • Localization is King: Let’s draw some inferences from an old Indian adage “Kos Kos par paani badle chaar kos par baani” (which means, in India “the quality of water changes after every mile and the dialect changes every four miles”). In such a diverse country everyone can’t be served the same way, with the same products – localization holds the key. When you sell Dudhi in Mumbai and Ghiya in Delhi, you are selling the same bottle gourd but the nomenclature is important. Does inventory of srikhand in Delhi and paneer in southern India give any distinctive edge to your retail offer, or should you focus on something that is consumer more locally?

Are we trying to open a simple combination lock (the Indian consumer’s mind) with a complex cryptographic fingerprinting algorithm?

Retailers need to invest in understanding, gauging and benchmarking the local preferences.  They need to be able to react to those preferences in a highly local manner.  And they need to acknowledge that the consumer is an intelligent value-conscious buyer, not a cost-focussed idiot.

That is the magic 3-number combination to the riches of the Indian consuming market.

Posted in Consumer, Food & Grocery, India, Retail, Uncategorized | 1 Comment »

One Response

  1. Muk Says:

    Lets see the mobile market. There seems to be one more factor that affects the Indian customer. It is that they would not really mind giving away a large investment but think thrice before committing to a high recurring charge. (I am mostly referring to the sales comparison between the iphone and the nokia series). Even in cars, we want cars to look good and also to give a lot of mileage.

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