WE ALL LOVE BRANDS
Indian consumers have never had it so good. They have more money, more malls and more brands to choose from. With scores of foreign brands entering India and many others knocking on its doors to tap its 300 million middle class consumers, Sugato Bose, an expert in the retail industry and currently head of home division at DLF Brands, warns only those brands will succeed that will offer value in India. He figures why brands are succeeding or failing in India and what it means for MoneyQuin followers.
By Sugato Bose
The urge to splurge comes partly from the possibility of being able to use one’s new possession to elevate oneself in the eyes of those one has known and many others unknown. And in this pursuit of recognition, brands become our quickest ally. We chase other’s envy, we chase brands, almost always outpacing our wallet’s strength. We have seen that in the richer countries: higher income, higher spending, emergence of brands.
We are seeing that happen in India as well. I was around this International brand showroom in Mumbai the other day. It was 9pm and the shop had closed. There were 3 people waiting outside saying please “let me in. I have seen a bag. I want to buy.” These three people will run up a bill of 60,000 rupees. This brand is a success as I see from its numbers. A pair of jeans costs upwards of Rs 10,000 here.
India, growing at 8 percent - the second fastest after China, is one of the best markets to get in for a brand. Scores of international brands have already set up their shop. Today, I don’t think there’s a brand which is not looking at India seriously. And if some are yet to enter, it’s not because of the market, but because of logistics or foreign investment restrictions.
And there will be far too many brands than we are able to count in the next few years. But will it end up just confusing consumers? Not really. In India, people have and will look for value. The value being offered by Big Bazaar is different from Gucci.
And India has takers for Gucci as well as big Bazaar. Gucci offers value to that top layer of social pyramid, while Big Bazaar is for very populous India’s middle class.
I have about 24 years of retail experience and I’ve seen that it’s always value that you offer is important. So, I don’t think foreign or Indian makes any difference. It’s just value. Yes but what tends to happen is that if it’s a foreign brand our expectations tend to be little bit higher.
Somebody who comes in with a unique proposition will succeed. I can give you an example of Puma. The sports shoe market was very simply a Nike, Adidas, Reebok market. Suddenly this brand comes in, introduces new fashion, opens up a new category, and succeeds pretty quickly in a very competitive market. And what’s new with Puma are their designs. If I put 20 feet away from you a Nike, Adidas and a Reebok and I don’t show you the logo, you won’t be able to differentiate. But if I put a Puma 20 feet away you’ll immediately recognise it for its unique design.
So now there is already much more choice. It’s important to have choices but it’s also important to have people who are ready to exercise that choice. That’s happening. Ten years back there were not too many people especially women who would get together on their own and go for a holiday. But these days even married women are planning outings on their own. At times without family.
TV, movies, advertising are playing an important role in developing brand consciousness and loyalties.
Brand-consciousness is surely not evenly spread across social and economic spectrum. The woman at the upper end of the pyramid is obviously much more brand conscious. The wife of an industrialist or a single woman who’s well-placed is obviously very particular about brands.
I have a friend who’s the global HR head of a leading advertising company. She’s single and earning well so she splurges and is quite brand conscious. At the bottom of the pyramid there’ll be a 22-24 year old woman who’s just started working and has a lot of disposable income. She will also be brand conscious but will go for lower end brands like Levi’s, Lee etc.
Lower
end but brands all the same.
The new India shops in malls, too many of which have already sprung up where there were barely any just a decade ago. And enter any mall in metros, you will be greeted with myriad brands – many of them foreign - of all product categories and segments. Now we have luxury malls also coming in such as the one by DLF in New Delhi that houses the luxuri’est’ of the brands in the world in most categories.
A Louis Vitton or a Gucci or a Chanel were known to be housed only in five star hotels, which is where they found right customers, but are now coming to these malls casting their net wide for customers.
A growing economy has put more money in the hands of people, armed them with credit cards, given more job opportunities to young single women and men who can now decide for themselves without much interference from family.
This has resulted in a dramatic change of attitude towards spending. And it’s not limited to buying clothes or bags. There are more people putting in money to buy an apartment. In my time it used to be 40 plus when you bought your first apartment. Today it’s come down to 30 plus. They are ready to take risk. They want to live well.
I used to be the country head of Lacoste at one time and that time Lacoste was small because it didn’t have too many brands. Also, it used to be like 1300 rupees for a t-shirt. The theory at that time was it’s an international brand and you pay. You pay that’s it. And we tried to push Lacoste’s communication all across. It’s not possible anymore. One needs to understand that South India is a very different market. Bombay is a very different market.
You need to decide to what level you need to customise. It’s important. Otherwise it’ll become like “Kites”. A Bihar distributor was saying on a news channel that they had been cheated. They were told it’s a Hindi movie but it was all English and Spanish! That is why I’m saying communication becomes very important.
