India: Diligent shoppers offer opportunity to manufacturers
By Amy Kazmin in New Delhi
Published: September 13 2010 17:21 | Last updated: September 13 2010 17:21
For decades after India’s independence from British colonial rule, Indian consumers were starved of choice.
During the socialist-era “licence raj”, nearly everything – automobiles, home appliances, phone connections, airline seats – was in short supply because of New Delhi’s restrictions on private sector activities, import controls and the inability of lazy state monopolies to meet demand.
Consumers, therefore, took whatever they could get, often after a long wait, and were generally grateful. Not any more.
Today, after two decades of liberalisation, Indians are among the world’s most demanding consumers, as they navigate a fiercely competitive market.
“People say that Indians want things cheap, cheap, cheap,” says Whitney Foard Small, Asia Pacific and Africa communications director for Ford Motor Co, which conducted extensive research on Indian consumers before launching its small car, the Figo, this year. “No. They want things that represent a good purchase for their hard-earned money,” she says. “It’s about value for money.”
Bindu Sethi, chief Asia Pacific strategy officer for Grey, the advertising agency, says: “Today’s customers are much more discerning.”
Before purchasing any big-ticket item, whether a vehicle or a phone, many Indians go on the internet to research specifications and manufacturers’ prices.
And then they will look for the lowest price. “They are diligent about shopping – careful buyers, who really do the research,” said Ford’s Ms Small.
Indians are also big fans of websites such as Mouthshut.com. Its 4m visitors a month check out consumer reviews for products and services ranging from electronics to banking and restaurants to holidays.
“Reviews are becoming an important determining factor,” says Faisal Farooqi, Mouthshut’s founder.
Consumers also challenge companies to respond quickly to complaints.
“A majority of brands in India have failed to give perfect after-sales service,” said Mr Farooqi. “Indians are very vocal. They will make a big deal about it.”
When it comes to non-durables, though, Indians are still more traditional. Grey’s Ms Sethi says: “They tend to make a list before they go to the store, or send the list to the store.”
That is changing, though. “Today, the retail outlet is no longer just a store, it’s a school where they go to learn about new products,” says Ms Sethi. “It will be a huge opportunity for consumer goods companies.
“When Indian consumers go to a hypermarket, they do what the rest of Asia is doing: they want to make the choice in the store.”
