News: It’s hard to fool the young Indian buying brigade

(TT 19/08/2006) New Delhi - Young, aware, with greater money and credit power and a yen to acquire the latest and the best — that’s the new Indian consumer.

Born and brought up in a liberalised era with a plethora of national and international brands at one’s beck and call, this young consumer is spoilt for choice.

But marketers believe one has also developed a discerning eye and can't be easily fooled into acquiring products whose quality or label does not match one’s expectations.

Higher levels of income and income expectations based on youthful optimism leads to greater spending, says Sam Balsara, CMD of Madisson Communications.

Balsara said “Demography, education, awareness, easy availability of finance, organised retail boom, media explosion, and the emergence of sunshine sectors have led to the emergence of this new class of spenders.

Fuelled by higher incomes from jobs in the sunshine sectors of infotech, BPOs, KPOs and helped along the way by easier and cheaper credit, the new consumer is all geared up to accumulate the latest car, laptop, mobile or go for a dream vacation to the Swiss Alps.

“Young people who are working for ad agencies and the media mostly go for our weekend breaks. This group is selective and opt for soft adventure travel packages,” says Sachin Bhatia, co-founder of MakeMyTrip.com, an online travel portal. And most seem to believe in living for the present.

“Ninety per cent of payments on our portal are through credit cards,” says Bhatia.

“The price equates to EMI concept has dramatically changed the spending pattern of the new consumer. He now lives by the month and can hence accommodate most fads into his personal budget-making,” said Ajai Chowdhury, chairman and CEO of HCL Infosystems.

Not only is the new consumer spending, he is doing it in a big way. Stephen Roach, Morgan Stanley’s chief economist, has recently estimated that 64 per cent of India's GDP comes from private consumption compared with 42 per cent in China and 55 per cent in Europe.

By 2010, demographers expect 60 per cent of the Indian population to be in the age group of 15 to 54 years. Ten years from then in 2020, the average age of an Indian is likely to be 29 years compared with 37 years in China and the US. And this lower average age of the population is expected to accentuate the trend of YAMY spenders — those who shop till they drop and worry about the bills later in life.

The boom in media is also accelerating the level and extent to which the consumer is able to access information on the latest brand, product or service in the market.

At the click of a mouse, one can get the best and the latest ideas, concepts and products from around the world.

This raises the demand for international quality products and products that meet specific needs. “Here comes the concepts of identifying the consumer, customising and co-creating products to meet specific needs,” says Vinita Bali, managing director and CEO of Britannia Industries.

But selective needs, a desire to live life ‘king size’, and an all-knowing attitude makes it difficult for companies to seduce the new consumer into buying their products. This means firms have to come up with sharper marketing tools and an in-depth understanding of the target audience to capture the new brand of consumers, Bali said.

Ad-men say products like ultra-slim cell-phones, which fit into back pockets of tight jeans is just one example of how products are being re-designed to suit the new-generation consumer.