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Marketing And Strategy

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Marketing and Strategy

May, 2011

Indian markets are touted to become the best-rewarding markets for both-domestic and international investors. With market liberalisation, increasing consumerism and the entry of more foreign players, Indian markets are exhibiting exemplary progress. The Indian consumer is rapidly evolving and the market is exposing the consumer to a host of new choices by international brands selling their products at competitive prices.

The total consumption in India is likely to quadruple making India the fifth largest consumer market by 2025, according to a McKinsey Global Institute (MGI) study titled 'Bird of Gold': The Rise of India's Consumer Market. Urban India will account for nearly 68 per cent of consumption growth while rural consumption will grow by 32 per cent by 2025.

India ranks first in the Nielsen Global Consumer Confidence survey released in January 2011. “India is one of the fastest growing markets in the world and the current consumer belief that recession would soon be a thing of the past has filled Indians with confidence,” said PiyushMathur, Managing Director, South Asia, The Nielsen Co. With 131 index points, India ranked number one in the recent round of the survey, followed by Philippines (120) and Norway (119).

Rural Market: The Next Big Opportunity

FMCG and retail giants are making good use of technology to reach out to rural India. From low-cost handsets to tablet PC’s, the Indian FMCG and retail sector is latching on to technology and applications to reach out to rural India. For instance, Marico is using mobile technology innovatively to arm its field representatives in their procurement process. The company procures large quantities of safflower (kardi) seeds for its flagship product sunflower oil.

Mega retail chains are looking to build a high-quality supply chain-retailers such as Bharti-Wal-Mart, Carrefour and Reliance are working to strengthen their supply chain formula by roping in farmers as stakeholders. Despite being the biggest names in the trade, these retailers are ploughing rural areas to teach innovative farming methods and find the best suppliers among them.

Hindustan Unilever (HUL) has launched a multi-brand rural engagement module- Khushiyonki Doli- that provides various personal care and home care brands such as Wheel, Surf Excel, Fair & Lovely, Sunsilk, Vim, Lifebuoy and Close Up. Launched in August 2010 in Uttar Pradesh, Andhra Pradesh and Maharashtra, the main objective of the campaign is to reach out to media dark villages with HUL brand messages to inculcate good personal hygiene habits.

India’s rural consumer durable market will witness an annual growth of 45 per cent in FY2012 owing to the change in lifestyle and higher disposable income of rural India which has fascinated the consumer durable market according to a study “Rise of Consumer Durables in Rural India” by an industry body.

With the focus on enterprise development activities and to make the rural masses self-sustainable, the Commonwealth Secretariat, London, has partnered with public sector banks Corporation Bank and Central Bank of India to provide credit to young people, women and differently-abled youth living in rural areas of India.

Education services start-up firm Edutor Technologies is looking to raise a first round of venture capital of US$ 3 million to expand its customer base in rural markets and launch new content such as test preparation for intermediate students. The company plans to tie up with government schools to tap the rural market and is also looking at the possibility of offering content in local language.

Hyundai Motor Co, India’s second biggest automaker, may build a network of as many as 1,000 rural outlets and introduce a cheaper small car.

In a survey conducted by IMRB for the Internet and Mobile Association of India (IAMAI), the total number of active internet users in rural area will rise by 98 per cent to touch 24 million by the end of 2011 from 12.1 million in December 2010. The survey said that the claimed internet user category is also set to grow by 96 per cent to reach 29.9 million by December 2011 from 15.2 million in December 2010.