Indian economy and localisation
Economy
India’s modern economic history starts with its independence in 1947. During British Raj, India became an industry for England which impacted India’s social-economic growth as under colonization’s India’s share in the world’s economy shrank to 24.4% in the 1700s to a mere 4% in the 1950s.
India has opened up many of its sectors, but what attracts the investor is the demographics and a market with a population of over a billion. Currently India’s demographic consists of a huge population of youth who are highly-skilled, hard-working, English-speaking, and relatively inexpensive. India is also great for its stable barometer during inflation, deficit, or growth.
The political environment is also stable and India is showing continuous growth on a global scale. India’s rising middle class ensures a growing consumer base, making it a potential market for manufactured and consumer goods. The low value of rupee to the dollar means low development cost and can export at a higher profit rate. Growth was increased in the industry sector in 2018–19, Manufacturing accounted for 16.4% in the industry sector, The GVA of 2018–19 was distributed between Agriculture, forestry & and fishing was at 16.1%, Industry at 29.6, and Services sector triumphed with 54.3% share.
Conclusion: From the past few decades, the patterns of Indian consumers and their money spending habits have changed drastically with the increased penetration of internet and social media; Urbanisation has been seeped into the Indian markets, influencing the lifestyle changes of Indian consumers. It becomes very easy for foreign brands to enter within the Indian market as the consumer base understands English (which has become one of the many universal languages) so localisation strategies, their products and schemes can be altered with convenience. However, the most challenging area for foreign brands when localizing their product is the diversified culture and taste preferences of consumers within the country.
While localising in India, some emerging trends must be taken into consideration that has been altering and reshaping consumer behaviour in India.
Consumer Behaviour and the localising strategies that can be used by brands for their success.
- Shopping and latest trends
A desire to be in sync and updated with all the latest trends is increasingly driving purchase among Indian consumers. People purchase products because it is trendy and not necessarily because they need a replacement. Millennials within the country are more inclined toward the popularity of the market which is marketed through social media influencers, celebrities and other rising artists within our country.
2. Time-saving mode: ON
About 57% of urban Indian consumers claim that in the recent past, they have paid for a product or service that saved their time. Though this trend can be seen everywhere, it is most prevalent among affluent consumers and in metropolitan cities.
However, this trend can be a little disadvantageous for brands as Indians heavily rely on makeshift home methods, many become reluctant against spending money on products that they themselves can design and customise at home. So, apart from just launching a product, brands need to give out offers that are unique to them and cannot be attained through make shifting methods to gain the other half of the population base that they are missing on. These offers need to be in sync to the kind of offers Indian consumers prefer and not the same as what would work in Europe or America as most of the consumer base wouldn’t be able to understand or want to understand the logic behind such offers.
3. Embrace of Health & and Wellness
Health consciousness has gained popularity into the national conversation in recent years. This trend towards health and fitness is now affecting health-related industries in unpredictable ways. For instance, people prefer to walk to a destination instead of taking a cab and cut down on their screen time to create more space and time for physical activities.
Although, for a majority of the Indians who spend on fitness activities, their motivation is less to feel healthy than to look healthy. Yet brands like Kellogg’s who launched products for these health-conscious consumers such as Special K for women who incline more towards dietary products, the brand gained huge sales and success.
Localising advertisements with celebrities is a constant trend within the Indian community, so if companies are able to launch localised advertisements then they can benefit from the consumer behaviour of Indians.
4. Preference for Indian brands over international ones
In Indian retail stores, locally produced products have prominent shelf positions, 50% of Indian consumers will bypass international brands in favour of an Indian brand at least in one category. This trend is most definite in food, including staples and beverages, where the preference for Indian brands are 47% and 37% respectively. Personal, home care and cosmetics are other areas where this trend is visible.
The preference for Indian brands is expressed to about the same degree in apparels as well. Within the wake of 2020, the propaganda of “Vocal for Local” has been heavily popularized and implemented, so, it can be a little challenging for foreign brands to penetrate the Indian markets now. However, even if Indians prefer local products over anything, one thing that draws them is the inculcation of their culture within their products. The best example can be seen in the food industry where brands such as KFC, McDonald’s and Domino’s inculcated Indian recipes, spices and Indian names for their products within their menu. If a brand is able to heavily restructure their products then it can succeed in the Indian markets.
Also, if brands vocally support smaller business brands while promoting their products to the Indian audiences not only will they gain a reputation of trust and support amongst the Indian consumer base but will also be able to breach the markets seamlessly without any trouble.
5. Renting over buying
Having the option to rent is a more prominent trend in India than buying products. Among lower-income groups, the primary motivation to rent is affordability; whereas people in higher-income segments rent for various reasons such as flexibility and variety that renting, enables.
Most of the high-end brands have a huge success in metropolitan cities, however, the middle or lower class income population makes about 46% of the population which brands don’t target. This further means that brands are letting go of the population that can get them huge consumer bases, revenue and success. So, if the companies can find a way to involve the other half of the population more but localising their content city wise (since almost every corner has diversified culture) or if they can come up with a wholesome approach for several cities at once, the amount of profit they can make within a country of the second largest population would be insane!
By Geetanjali Mehta
Team Loc-N-Apps
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