From F&B to real estate to branding, marketing expert Abhishek Sareen discusses his predictions for the future of Indian consumer behavior over the next 5 to 30 years.
India is truly a diverse country, besides having so many different regions that identify themselves with unique languages, cuisines and belief, India has pretty diverse socio-economic classifications. The moment you multiply regions (Indian states) with economic classifications, you have the most diverse set of customer segment at hand. Over the last few years, Indian consumer segments have been homogenizing, primarily due to wide-spread used of media. And this is very evident when you look at politics which is now becoming more of a national subject than local.
While understanding the recent evolution of the Indian consumer, we will keep the socio-economics segmentation in mind.
Reasons for Evolving Indian Consumer Behavior: How has the Internet Changed Consumer Behavior
With the advent of internet-based business models, the Indian customer’s consumption habits have evolved from an appointment-based consumption to demand-based consumption. In recent years, business have gradually been changing consumption and decision making habits of the Indian consumer. Such business include:
- Instant order and delivery of cabs, restaurant food, grocery, etc.
- Early morning fresh and daily delivery
- At-home delivery of services of personal care, maintenance, etc.
- Instant & high quality online content delivery of movies, TV shows, live sports, news, education, etc.
Predictions for the Future of Indian Consumer Behavior in 2020-2050
1. Convenience & Demand-Based Models will Continue to be Relevant
Today, the Indian consumer does not need to step out of the house because of this high level of door step convenience. Today, the only possible thing that may be missing in digital consumer behavior is theatrical releases of new movies. But I’m sure that corporate houses who want to disrupt the movie distribution ecosystem are addressing this need, too. For example, Reliance Industries are working on a new service to provide first day online premier of new movies on their platform Jiofiber. And this new digital consumer behavior has already accelerated with Covid-19 crisis.
2. Commercial Real Estate will have New Formats
Retail stores would soon need to reinvent themselves and create new formats that are instant delivery-centric. There may arise a need for cloud supermarkets that serve bulk of their needs of a city’s population. We can already see this new ecommerce consumer behavior in the USA where companies are converting shopping malls into warehouse for online store. And with the popularity of online food delivery services, such as Swiggy, Dominoes, or Zomato, this is already happening in India, too, in the form of cloud kitchens.
Due to the Coronavirus pandemic, we’ll observe the evolution of Indian consumer behavior in other sectors, too. Commercial real estate will surely see correction when this starts happening more and more in India. Indian retail stores already seem to be struggling to get customer walk-ins. However, India is a country where inefficiency creates a lot of jobs, so it’s going to take some time to optimize the cloud retail model.
Fast forward 30 years we may be living as depicted in the animated movie Wall-e where people are living lives on easy chairs, ordering and consuming using a universal basic income from home. Scary as it may seem for some, but that may be the new normal during the futuristic times.
3. Need for Premium Residential Real Estate
Okay, coming back to present times, the question where are the Indian consumers heading towards will always be debatable. Indian consumers love to be in crowded and chaotic places. But gradually, the Indian upper middle class has started spending a lot of time at their homes in the company of their family members and thus would desire bigger homes in future.
During the Coronavirus pandemic, we are already observing this consumer behavior analysis. While in the beginning of the pandemic, people felt forced to stay at home. Nowadays, they have started to accept and even enjoy their time at home. Demand for premium and spacious residential real estate is likely to go up in the future.
Having been used to demand based consumption, the Indian consumer will become restless if their needs aren’t met instantly. People are spending an increased amount of time inside their homes, they will become more and more conscious of their personal space and they may lose their social skills to engage with other.
4. Decision Making Factors will Evolve
Indian consumer behavior today is very distinct from that of consumers in western (who call themselves developed) countries. Indians don’t believe in wasting food or throwing any unwanted things. They love to reuse plastics and exchange or reuse items like children’s clothes or cribs, furniture or books. Indians generally don’t buy or consume things in large portions. However, soon this will change and we will become more objective in our approach than emotional.
A few years back, most companies would launch a product and try to sell it based on an emotional appeal or price tag. However, this has now evolved where companies now try to sell a range of their product offering with functional specification based approach.
This shopping behavior can most commonly be observed in mobile phones, where technical comparison are most evident. Another example of this development of consumer behavior is motor bikes. Earlier, every model used to have a distinct model name or sub-brand, but now the products are categorized based on their key specs like Pulsar 125, 150, 200, 220, etc. TVS Motors now categorizes their line-up as Apache 160, 150 4V, 180, 200 4V, 200 Fi, etc. Also, product ranges now are being differentiated by year, like a seasonal clothing range. We can observe this across various consumer markets, especially in the bicycle industry in India.
5. Changes in Consumer Behavior due to Digital Marketing: Brand Name vs. Brand Value
How has digital media changed consumer behavior? What we see here is that the Indian consumer is adopting. They are becoming more like the consumers from western (or as some say, developed) countries. Indian consumers are now more technically informed (or at least they want to believe so) in their decision making process. They believe a product’s performance and value can only be judged technically and not be based on emotion or brand. Going forward, it will become difficult for brands to charge a premium based on their brand image.
From the brand’s employee ethics to their political views, from how the product is created to how the brand choose to market, the Indian consumer like to make themselves aware of everything. And they take all these factors into account when making purchase decisions. Brand will need to communicate their value much more objectively than emotionally in times to come.
No points in guessing that the Indian consumer is well informed and has stopped believing in the MRP price tag. The trust on brand image will continue to decline in future. This evolving Indian consumer behavior is truer with younger generations (below 40), but the older generations still believe in brands. However, nowadays it’s the youngsters who the decision makers for their elders.
Post Coronavirus World: Predictions for Business & Society
Abhishek Sareen is a sales & marketing professional with over 16 years of experience. He started his career as a management consultant at Kurt Salmon Associates and has worked in marketing & brand management, international business in sectors like precision steel tubes for automotive industry, consumer goods and retail.
He’s is a passionate cyclist and participated in several endurance competitive events. His interests are in behavioral psychology, economics and chess. He is a graduate in Computer Science and an MBA in Marketing. He completed his executive education from IIM-A in 2016 focusing on business strategy.