C-Class Markets Emerge As New Hot Spots For India Inc
LITTLE-KNOWN SMALL TOWNS KEEP THE METER TICKING FOR FMCG, DURABLES, JEWELLERY COS ……….Kala Vijayraghavan & Maulik Vyas
LITTLE-KNOWN SMALL TOWNS KEEP THE METER TICKING FOR FMCG, DURABLES, JEWELLERY COS ……….Kala Vijayraghavan & Maulik Vyas
MARKETING, according to Jagdeep Kapoor, is like cricket. The swashbuckling boundaries are scored in affluent neighbourhoods. But the singles that are crucial to winning matches are accumulated in places such as Dharavi, the sprawling slum in the middle of Indias financial capital, says the chairman and MD of Samsika Marketing Consultants.
Here, Cadbury sells its chocolates, Nestle its Maggi noodles and Bisleri its bottled water to customers like Savita Singh, who works at a grocery store in Dharavi.
Scattered across the country and transcending the India versus Bharat divide are markets like Dharavi in Mumbai, Karad and Patan in Gujarat, Khidki Gaon and Kotla in Delhi and Metiabruz in Kolkata. Marketers describe consumers in such markets as belonging to the C segment of socio-economic classification. Kishore Biyani, CEO of the countrys largest retailer Future Group, prefers the term India 2.
Its not quite the bottom of the pyramid, but theres still a vast fortune to be made here.
These are price-sensitive markets, but are brand conscious. Consumers in shantytowns are large markets for consumer products. And marketers who arent seeing consumers by using their imagination are clearly the losers, says Ramesh Chauhan, chairman of the packaged water maker, Bisleri International.
Among those whose imagination sees teeming hordes of consumers even in slums is Ghanshyam Dolakia, a partner at Kisna Diamond & Jewellery that has 13 stores in Dharavi alone and a network of 2,350 franchisee outlets across the country.
Pravin Jain, who is a Kisna franchise owner in Dharavi, says most of his clients are lured by advertisements on television, and buy jewellery worth up to Rs 10,000 each.
Big brands latest entrants to C segment
THE pathfinders into the lower layers of the consumption pyramid are not glamorous brands, but they are important nonetheless.
SAJ Food Products, which makes Bisk Farm biscuits, Priyagold biscuits from Surya Food & Agro and Sapat Tea are among those playing to their strengths and giving more storied brands a run for their money, says Sunil K Alagh, chairman of SKA Advisors and a former CEO of Britannia Industries.
The personal equation between the smaller companies and the wholesalers and the retailers is great. The trade is also more receptive to companies personally in touch with them, he adds.
With affluent markets reaching saturation, large marketers are beginning to pay more attention to bite-sized consumers. Industry estimates put the size of the C segment of the market at Rs 6 lakh crore ($130 billion) a year and growing at over 50% per annum.
Mr Biyani, who runs the Big Bazaar, Food Bazaar and Central chain of retail stores, is among those plotting to win consumers in India 2. The point is to create a structure and offer products that cater to consumers who would otherwise not typically walk into a Big Bazaar, he says.
For now, the skilled workers and craftsmen who may not want to enter a jazzy showroom, but want to own luxury products go to stores like those run by Manoj Mandal in Dharavi.
South Korean electronics maker LG is there, too, through large distributors with widespread reach. We realise that there is a huge opportunity for early adoption of our products by consumers. We are seeing demand coming in even for LCDs from such markets, says V Ramachandran, director of sales and marketing at the countrys largest consumer durables firm.
Shashikant Dhar is not someone who typically walks into Big Bazaar, but was looking to buy a television set. So, he walked into a store owned by Mr Mandal with a high-end LCD television on his mind.
His reasoning was simple: unbranded goods cost almost the same as branded ones. And an LCD television occupies less space, freeing up precious real estate occupied by a large TV showcase.
It is not the locality but the mentality that makes consumption, remarks Samsikas Mr Kapoor.
* UNITED COLOURS OF INDIA: When small towns aspirations rake in the big bucks.