Retail Dude

The title of the article has been borrowed from the article found at Knowledge@Wharton, Which helped me answer some of the questions running in my head regarding the complex consumer class in India, The statistics are right about India, its our third consecutive year at the top of GRDI and our consumer goods market is expected to reach $400 Billionby 2010, but we are the same consumer class, who have readily accepted the 100 bucks pop corns at PVR’s but bargain with the auto wallah on our way. We are the same class who have far exceeded any one’s expectation in the mobile market but still have the least mobile Internet penetration, The question is simple: How to capture this complex consumer class?

The article suggests that although the attitude is shifting towards consumerism, being individually poor but collectively rich is what differentiate India from rest of the world, with a large part of the population living below the mark of $1 per day, India still holds a tremendous untapped middle market, and this is what we all will agree to! Its our population which has turned out to be a boon for us, be it the outsourcing mania or now retailing, its the numbers which is making the heads turn towards India!

We can notice the changing trends, as more and more families gain economic independence because of the continued industrialization of the country, the focus of the consumer is shifting from the basic amenities like food and clothing to more advanced consumptions like mobiles and health care, but to capture these markets, retailers need to adopt to strategic mix of pricing and values, as we still are guided by both. A casual surf around landed me at the case of Ram Das Mohan Lal Maheshwari which has strategically crafted this proposition of both price and values, thus firming up the belief. The store, established 60 years back, has over the time offered an optimum mix of price and values, Which so far has skipped out of the hands of the new organized retailers, but this doesn’t necessarily means that the organized retailing is entirely at fault. Rising real estate pricing, and fresh money in the hands of the young consumers have made the numbers go wrong.

Although, Pricing and Values are a sure shot strategy of winning this question, the article suggests that recent researches have shown that the Indian consumer is fast shifting over to the products which are relevant to there experience, As Rajeev Karwal has cited in the article:

“Karwal cited the mobile phone as an example of a product that offers a high degree of functionality at a good price. “It is equipped with features such as a dust-resistant keypad and a built-in flashlight that not only aid truck drivers on India’s poorly lit highways, but also take away the villager’s embarrassment over the lack of electricity. Customized to the Indian market and reflecting the importance of price and value rolled into one, the mobile phone now serves as a great benchmark for market penetration. It is no wonder that the number of mobile phone subscribers far outweighs the number of Internet or credit card users in India”

So, its still a war out there, between pricing and values, and now a different virtue - Experince, Which is although new to a majority of Indian Consumers, but is fast catching up!

India stands as a challenge to all to management theories, I have the numbers, do you have the strategy?

- Sarthak

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