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Consumer-led 2012 ahead

The coming year will see more brands chasing more empowered consumers who will demand more on their own terms, in their own time and space, at their own perception of value, even as they aspire for more products and services and consume more of them. Anita Sharan, Rachit Vats & Manu Toms report.

business Updated: Dec 26, 2011 01:47 IST

The recent success of the song "Kolaveri Di" released on YouTube by Sony Music last month, surpassed all other Hindi or Tamil releases, with almost 30 lakh hits on YouTube and over 82 lakh links shared on Facebook in less than a week. This success perhaps best underlines the shifts in consumption behavior in India that is being fuelled by technology and digital evolution. It underlines the growing clout of the internet as a platform of delivery for entertainment, information, products and services.

Importantly, the success of "Kolaveri Di" underlines the reality of Indian consumers coming into their own — the song is a success because the consumer gave it that recognition.

A combination of factors have put the consumer centre-stage powerful ly, propelling brands to behaviours governed strongly by consumer aspiration, desires, choices and buying propensities. So while in urban markets, consumers increasingly looking for deals has sparked off e-commerce businesses based on discounts and deals, urban branded retail market places sport sale signs on shop fronts almost throughout the year now.

At the same time, upper end branded products and services are also doing well. Indian consumers are driven by aspirations at every income level and willing to spend.

This behavior will mark consumerism in 2012, with even rural India expressing its aspirations with higher levels of branded purchases. Nestle registered a 40% growth in rural sales last year.

Brands will find themselves catering to two kinds of consumers with increasingly similar aspirations. While fresh growth will come from first-time consumers in small towns/rural India, keeping the urban consumers spending on the brand will require more advanced innovations. 2012 is likely to see many more brands offering the same propositions at different price points.

For example, L'Oreal India recently launched its Rs 139 Garnier Colour Natural hair colour in a smaller pack at Rs 59. "This has unlocked the small-town market for us. Indian consumers are spending much more on consumer products. They are willing to pay more but they want to see the value they get for that." said Satyaki Ghosh, director – consumer products, L'Oreal India. He said that L'Oreal's top end L'Oreal Youth Code, a Rs 1,000-plus preventive anti-ageing cream meant for younger, 25-28 years consumers, "has been a big success at the top end of the market."

Consumer aspirations will drive consumption of an expanding circle of products and services cutting across what you can eat, wear, look and feel good with, decorate your home with, entertain yourself with, take a break with and connect with.

2012 will see the idea of "on demand" strengthening with the consumer, as the modes of delivery become more varied. For example, the internet is becoming as much a medium for information as a medium for entertainment — music, games, films, networking — and shopping, when the consumer wants them, where he wants them. The growing footprint of broadband and internet on the mobile phone will enhance this "on demand" power of consumers.

Ankur Warikoo, CEO, (Groupon), an online daily deals site, said, "Being able to shop on the internet allows consumers to actually experience what they earlier just thought of, or even never thought of. To that extent, the internet becomes a lifestyle discovery engine."

The government's decision to digitise cable television will fuel the launch of more niche channels and programming. 2012 will see a lot of niche action.

Salil Kapoor, COO of DTH company Dish TV said: "2012 will initiate the generation of niche channels and niche content that, if they are sticky and interesting, will get the viewership ratings to make them attractive to advertisers. Since TV subscription is not a service that can be sold again and again, and there is no content exclusivity, we will see something like a ‘land grab' scenario in the industry."

The fast penetration of the mobile phone in India and the swift expansion of smartphones, are also changing consumption patterns. Music access and buying, for example, as consumer research reveals, has shifted to the mobile platform — more music is bought via mobile downloads that via any other route. With the launch of more music TV channels in Hindi as well as regional languages, access of music is transforming permanently.

Amar Tidke, programming head, 9XM, predicted: "2012 will see many more innovative platforms for the delivery of music. Music has no barriers."

It is not that consumerism in India is totally unaffected by the current economic see-saw. Consumers, for instance, did not rush to buy cars in 2011, which saw a big sales dip of 24% in the second half of 2011 after a soaring 26% growth at the start of the year. Neeraj Garg, board member & director, Volkswagen Passenger Cars, said: "This year has been extremely volatile. It is also difficult to predict for 2012 – we expect a growth of 7-8%."

And yet, 2012 will see the launch of over 75 cars (new models and facelifts). New super luxury players Koenigsegg Agera, Maserati and Aston Martin have also entered India. India's growing consumerism cannot be ignored, despite temporary slowdowns.

The strengthening of the consumers' status in the country is getting reflected in advertising too. Ashish Mishra, chief strategist & head, Water, Mudra's strategic branding and design consultancy, observed: "Brands as a reflection of the society."

Mishra predicted that 2012 and beyond will see advertising reflecting conflict resolutions, opinions, partnerships, communities and heart. So we will see more of the "Har friend zaroori hota hai" from Airtel kind of expression, and the "No reason party" kind of ad messages expressed by Godrej Tyson's Yummiez brand.

Buyer will call the shots

First Published: Dec 25, 2011 21:56 IST