Added Value Edits: Superpower India
16 Jun 2014|jhall
In case you hadn’t noticed, for the past few months we’ve been revisiting the BRIC countries. This month, we wrap up with India. Starting on April 7, over 800 million Indians will be able to cast their vote in a process which takes 40 days. Considered to be the most consequential since 1977, the world’s largest election is expected to trigger accelerated economic growth.
We explore the complex Indian consumer landscape, the nation’s innovative spirit, brands’ marketing efforts, and onions in the world’s second most populous country…
Maharajas to Masses
Fuelled by economic growth, wealthy Indians represent a source of enormous potential for global luxury brands. But India is a marketplace that poses significant challenges. Indian luxury consumers have distinctive characteristics, informed by regional differences, culture, levels of wealth and experience. Read more about what our luxury expert, Mel Puddick has to say.
Top 5 ways to win in India
Ill-prepared examples abound of brands and products that sell big in western countries but flop in India. So how can brands harness the world’s third largest economy and maximize its potential to drive brand growth? We share the top five strategies to entice India.
India – the basics
According to PWC, India has the potential to become the world’s third-largest economy by 2050. Within 15 years, its workforce will be larger than China’s – and it will be younger. Successfully navigating this highly diverse country will be about flexing your value proposition. A recent KPMG report provides a useful shopper segmentation overview, along with local success stories by segment. And in their recently published book “Reimagining India: Unlocking the Potential of Asia’s Next Superpower,” McKinsey speaks to contributors including Eric Schmidt and Bill Gates.
Innovation, innovation, innovation
Nearly a year ago, we dedicated a newsletter to Jugaad Innovation, a frugal form of innovation born in India. Looking at Fast Company’s top 10 most innovative companies in India, the Jugaad sprit has evolved: it’s now innovating healthcare, the internet and charity. And the Silicon Valley mindset is increasingly taking root in India, as American technology entrepreneurs seek untapped opportunities.
Onionomics, as the BBC coined it, has the power to severely disrupt daily life in India. Indians rich and poor demand onions as an essential ingredient of most of the meals they prepare – so when prices skyrocketed, they took to the streets. For Walmart, Carrefour and Tesco, this offered an opportunity to showcase how they would revolutionize shopping. And interestingly, it was Groupon India that scored the biggest marketing win from the onion crisis by delivering cheap onions to thousands of lucky Indians.
Luxury and HENRYs
While India only enjoys 1 to 2% of the global luxury market, the combination of increasing wealth with a young and increasingly educated population means the luxury market future is bright. The burgeoning middle class is becoming more savvy and is beginning to buy into what luxury offers. These High-Earning, Not Rich Yet, or HENRYs, start out buying luxury as an indulgence but quickly consider it indispensable. France’s Louis Vuitton has taken note and is planning to open more larger stores.
Look to Tata
Tata, an Indian multinational conglomerate, is the top brand in India – by a long way. While they are known for so many things, it’s what they’ve been able to do with the Jaguar and Land Rover brand acquisition that has impressed the automobile industry. With Added Value’s help, they’ve been able to turn around a Western brand, something few companies from emerging countries can say they’ve done. And the success looks set to continue with strong performance in China.
Reaching the masses
At the other side of the consumer spectrum are the rural poor. One third of the world’s poor lives in India: a sobering challenge for brands doing business there. Gillette was able to successfully create a more affordable razor with the launch of the Shave India Movement, while Coca-Cola has taken its Open Happiness campaign to small towns by employing big screen Bollywood actors to play small-towners in their most recent execution.
They’re big in India. EY states in their Social Media Marketing: India Trends Study 2013, “Indian organizations use social media much more than the global average and their counterparts in emerging economies.” Indian brands are seeing Facebook as a valuable platform to establish deeper relationships with their customers. And for Facebook, India is set to become their largest market. And foreign brands are getting in on the act: Samsung launched an integrated social media campaign, “The Useless Bid,” to promote its latest tablet, the Tab 2.
It’s been claimed that nearly 70% of Nike India’s marketing budget has been dedicated to conducting activation activities and aiding experiential marketing. Nike has successfully captured the attention of Indian runners and now they are focusing on targeting Indian youth through youth-centered events. And they’re not alone – from Coca-Cola to Maybelline, these top 5 experiential marketing campaigns range from interacting with virtual walls to social clubs.
Get in touch if you’d like to hear how Added Value can help you.
Written by Jonathan Hall, President North America Consulting, Added Value.
Follow Jonathan on Twitter @HallCJonathan
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