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india’s emerging consumers

india’s emerging consumers. How do we presently look at Emerging Markets (EMs)?. Emerging markets are where 84% of the world lives. By 2008 they will contain 67% of Internet users and 68% of cell phone users.

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india’s emerging consumers

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  1. india’s emerging consumers

  2. How do we presently look at Emerging Markets (EMs)? Emerging markets are where 84% of the world lives. • By 2008 they will contain 67% of Internet users and 68% of cell phone users. • By 2010, the number of installed PCs in the world will double to 1.3B worldwide.  70% of the new PCs in this statistic will come from what are considered “emerging markets”.   (Forrester Research) • Segmentations • Income classes; annual household income • Low <US$ 2000 - 21M HHS • Middle US$ 2000-6000- 51M HHS • High US$ >6000- 120M HHS • Rural vs. urban • Country • Windows has two personas for EM customers: • Harish Manthana – urban Indian local government employee • Andreia Silva - urban Brazilian public school teacher

  3. What is the best way to segment/ understand India in the context of its booming economy? • Are currently used broad income segments sufficiently accurate predictors of household preferences in EMs? • How does one best categorize the consumption behaviour of Indian households – particularly with respect to technology?

  4. Can we create consumer portraits from a single segment considering… • Multiple personas • Following diversities • Registering varying attitudes

  5. Study sample & methodology • Ethnographic study covering 70 urban households • Income group: Rs.9000 – 22000 per month (~2500-6000 USD per annum) • Joint/ nuclear families with children • All in Mumbai • Diverse ethnic groups • All evidence domestic ITC ownership

  6. Emerging Market Locales

  7. Inside some homes

  8. Consumer Portraits… • Anjali • Creates a particular moral universe about consumption, conservative and puritanical • Pallavi • Consumption posing a dilemma: Attracted and repelled • Subrata • Strong utilitarian notions of consumption • Bhavna • Represents an energetic consumer

  9. Pallavi Consumption posing a dilemma: Attracted and repelled Age: 24, Undergraduate Occupation: Private tuitions Income (p.m.): US$90 HH annual income: US$ 5870 Caste: Scheduled caste, Buddhist Ethnicity: Nashik, Maharashtra Family size: 4 Earning members:3(Subject,father, sister) • Recently got a camera mobile phone for US $100 and loves to flaunt it, though important for her job • Thinks fortunate to be living in times so happening with many new opportunities • Does not like mall/multiplex fashion expenditure. • Fashion is something that is comfortable and not trendy • Saves money to buy ‘useful things’. • Thinks PC is useful

  10. Bhavana The energeticconsumer Age: 41, Home Maker Education: HSC Spouse: Textile merchant HH annual income: US$5300 Ethnicity: Sindhi Baniya Family size: 3 Children: 1 son (12) Earning members: 1 (spouse) • Manages home finance and saves in all forms- shares to fixed deposits • Identified a dream house in a good suburb • Wants fancy furniture, A/C, swank car, clothes, traveling • Happy with a son, not a daughter. Gives her status in her community. Gives pocket money to 10 year old son. • PC culture, not for her generation but for gen next.

  11. 13.5M HHs earn >US$3100 (per yr) 8.4M of these are urban 0.9M of these own businesses

  12. Anjali GanganiCreates a particular universe about consumption, conservative and puritanical Age: 43, Architecture graduate Occupation: Comp training Inst franchisee Spouse: Architect HH annual income: US$8000 Ethnicity: Maharashtrian Brahmin Family size: 4 Children: 2 sons (15, 10) Earning members: 2 (subject, spouse) • Wants sons to be good engineers • Horrified at elder son wanting to be a dancer. Trying to draw him away from MTV culture • Part of a spiritual cult and is initiating her 2 sons • Hates people taking loans to spend • Critical of husband who likes fancy shopping and outdoors. But is proud of being able to ‘afford’.

  13. Subrata DuttaStrong utilitarian notions of consumption Age: 45, Lab Assistant, IIT Education: ITI Diploma Spouse: Small-scale tailoring HH annual income: US$2700 Ethnic status: Assamese Kayastha Family size: 3 Children: 1 son (17) Earning members: 1 (subject) • Detests waste culture. Even computers create junk • Good education is equated with good living. • Wants son to go abroad • Conscious about saving safe • Spend only when having clear use value. Even pretty things have to be affordable.

  14. 14M HHs earn US$2300-3100 (per yr) 7.5M of these are urban 3.8M of these are salaried

  15. Pull factors Good education Rush to learn computing skills Embracing new opportunities Glamour of global spaces Push factors History of a saving ethic opposing consumerism Threatened by open sexuality. Accommodating ambivalent Portraits… Children: Emerge as the driving force and the symbol of this aspirational economy.

  16. Top Cons Durables Owned MS Strategy Color TV Refrigerator Telephone Audio System Two Wheeler Washing m/c Car Traditional Perpetual Licensed Products High Income 21 M HHs Av. annual income $6,000 PC Penetration10% Color/ BW TV Refrigerator Telephone Audio System Two Wheeler Washing m/c Average Yearly HH Income New Business Models - Subscription Pre-pay Medium Income 51 M HHs Annual Income $2-6,000 PC Penetration 2% Low Income 120 M HHs Bicycle Radio Transistor Electric Fans B&W TV Shared Access Urban: Café’ Rural: Kiosks Urban Rural PC Penetration ~ 0% Annex slides… Income-Based Segmentation E.g. Household Income Distribution, Consumer Durable & PC Ownership in India Cons Durable Penetration in Urban HHs PC Vs. Communication Equipment – Installed Base in Some Cities • Low penetration of PCs in HHs • PC installed base much below communication infra in Urban HHs • Affordability of PC an issue for Medium Income group • PC Desirability low – High Income HHs under-penetrated Sources: NCAER, IRS 2003, World Resources Institute (WB) Microsoft internal use only | March 2, 2006

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