Opinion: Great Indian opportunity reveals itself, again

A report released by an arm of Fitch Ratings in December 2013 says that India’s private consumption expenditure, in the two quarters ending September, grew at its slowest rate in 37 quarters. If there is any consolation, the September quarter saw it rise to 2.2 per cent from 1.6 per cent in the previous three months. With rural India relatively insulated and even expected to drive consumption with better agricultural yield in the coming months, it is not surprising that more than ever before, the focus for marketers has expanded to rural markets. But boosting urban consumption in discretionary categories remains a challenge.

The economic slowdown spared very few sectors in 2013. More questions were asked of marketers on the return on marketing investments. There was pressure to innovate in an era punctuated by inflation and unforeseen forex fluctuations. Lower priced SKUs returned to the shelves. Value was in order - but premium did not slow, as evidenced by sales of brands like Zara.

The positive has been that across the spectrum from automobiles to FMCG products, we saw marketers trying to buck the trend, often with path-breaking innovation. Tangible reassurances to consumers fetched rich dividends, as was evidenced by the world’s largest two-wheeler maker Hero Motocorp.

On the other hand, we saw a cautious approach being advocated by some, on the need to put more money behind the more responsive part of the portfolio during the slowdown. A parallel approach has been in practice, challenging the marketing and sales functions to embrace the diversity points they are confronted with.

The impact on agency partners has been evident. 2013 will go down as the year in which the elephants started their real digital dance after many years of reluctant rehearsals. If media behemoths are seeing more than half their revenue from non-traditional media planning and buying, creative powerhouses are forging digital alliances to join the journey.

On channels, 2013 will be remembered as a year when e-commerce came into its own. This has been driven by several players aggressively growing the category with customisation for the Indian consumer – cash on delivery, try-and-buy, the works. Newer categories like groceries and vegetables are getting online, with localised players offering choice that retailers sometimes cannot. From jewellery to insurance, a segment of buyers is picking up things online not just for value, but for variety and convenience. The journey is still some time away from its destination given infrastructure issues, but Forrester predicts that online retail sales in India will grow from $2 billion in 2013 to $16 billion in 2018.

This, even as brands in the quest for greater share of wallet, expand their physical network to deliver exclusive brand experiences – be it cafes by coffee brands or salons by personal care brands. While on beauty, a company like L’oreal which has been around for 20 years in India, and markets the likes of Garnier, is today talking of expanding its portfolio to reach lower down the pyramid.

While a slowdown in high-visibility categories like cars has created an ambience of gloom, the pressures of delivering in this environment, perhaps, has resulted in some of the best advertising and marketing communication we have seen in India in recent times.

Another facet of advertising and marketing that hasn’t changed - even as the fundamental metrics of television audience measurement is being recalibrated - is the power of storytelling. Only now, the stories are spreading on the internet, or starting from it.

Juxtapose all this against the incremental growth in revenue of premium lifestyle retailer Shoppers Stop with the use of analytics and consumer insights (expected to touch Rs 100 crore this year), and we perhaps have the answer to the 2013 riddle. Marketers will need to target, innovate for specific segments, whether it be on product, packaging and price, distribution or communication.

The same Amazon that’s talking of getting drones to deliver products to consumers in future, is in talks to leverage India Post, the postal services of the Government of India with unparalleled reach. If there is a market where it could use both channels, it would be India. There are consumers for both in India, and will continue to be. That’s the immunity this market provides.

Gokul Krishnamoorthy, editor, Campaign India