OPINION: For New Zealand business to grab this opportunity it needs to understand the Indian consumer.
India, currently the world’s fastest growing consumer market has often fascinated entrepreneurs and business leaders from New Zealand.
However, heterogeneous consumer bases such as India is often considered a challenge rather than opportunity. The good news for exporters is that this heterogeneous and exciting market has evolved in the past three decades. India now constitutes a large, technically skilled middle class population ready to spend money on quality goods and services. The onus is now on us to reach out to them.
For New Zealand business to grab this opportunity it needs to understand the Indian consumer. Indians, like most of us, demand better bang for their buck but are very price sensitive and likely to have a good understanding of the market place.
Further, the Indian consumer may demand a high degree of value orientation. Price elasticity is high, so fixing "inaccurate" prices and marketing positioning is doomed to fail. In this sense, market research of consumer preference and what is offered by competitors is critical to developing a successful business plan in India.
Aside from price, non-monetary considerations such as brand, product quality and design are also likely to play some part in the decision making process. With the internet being used in most places across the country, Indian consumers research before stepping out to buy. Therefore establishing a website specific to India will add value to one’s product or service.
The importance of family is also deeply rooted in the minds of most Indian consumers, leading to a high degree of family counseling in their consumption patterns. Indians like to put aside a relatively large income for their children, especially in preparation for future education.
Also, the views of other members of the family (word-of-mouth advertising) can easily exert a critical influence on the decision of a single purchase. Certainly, marketing and advertising strategies should put more emphasis on elements of the family. For example, offering discounts to buy family packages can attract eyeballs.
In recent years, consumer brand awareness in India is increasing. Driven by the desire to distinguish themselves from the mainstream and build a personal image, Indian consumers are more willing to spend large sums of money to climb the ladder represented by a brand. They often seek the established, well-known trade mark. Indian consumers tend to prefer branded clothing, watches and other fashion accessories such as sunglasses.
For designer clothes or fashion accessories, Indian consumers put more emphasis on the tag design and style. With this preference for the label, an especially outstanding logo on clothing items would probably generate better sales than different elements of fashion design. For other items, unbranded Indian consumers seek luxury, niche and innovative elements, such as electronics or smartphone accessories.
(Click to zoom)
New Zealand companies targeting Indian consumers must be willing to invest time and money to target large middle class and high end consumers. It is only when we invest our time that we better understand the tastes of our consumers.
Investment in all kinds of mediums will also bring rich rewards. One such medium is smartphones. Indians have access to some of the cheapest indigenous made smart phones. They utilise their free time to pursue various activities on smartphones including E-commerce. Companies such as Flipkart in India have become an excellent and competitive online market place offering the Indian more consumer choices.
Kevin McKenna, New Zealand Trade Commissioner in Mumbai, says while India is certainly a growth market for global investors looking at expanding into India, “Kiwi businesses need to think about long term strategy if they are serious about expanding into India. Just finding a distributor is not the end of the story – it’s just the beginning.”
Sunil Kaushal is the director of Kaushal & Associates
If you are travelling by Air New Zealand this week, remember Koru Lounge wi-fi provides you with FREE access to NBR ONLINE premium content.
