the new hr

Businesses need to reset their perception of the Indian consumer to best leverage
opportunities in a fast-changing economy.
Dheeraj Sinha, Grey
speed
learning
Capsule
The India they did
not tell you about
During the last two decades
of the free-market regime
in India, businesses
have followed certain
assumptions about its
consumer market. Yet they
have met with mixed results.
India was seen as a huge market, delivering what
was popularly termed the ‘demographic dividend’.
While the demography is still there, the dividend
has been missing. It was said that while deciding
the cost of a product in India, you need to set a
price that consumers are willing to pay, rather than
the other way round. However, the so-called poor
consumer has rejected the stripped-down models of
cars and mobile phones made especially for them.
There is something amiss in our understanding
of and approach to this market. Or, it could be that
after two decades of free-market experience, we
are wiser about what works here and what does
not. During these two decades, businesses have
struggled, fumbled, learned, and improvised. While
many of them have succeeded turning themselves
into case studies, many have met with failure. There
is a lot to learn from the successes and failures of
the last two decades in the Indian market. This
is also the time to address some of the long-held
beliefs about the Indian consumer, which may not
all be true. India is known as the land of elephants,
and cows are holy animals here. However, it is time
that we addressed the elephant in the business room
and the holy cows of marketing. Here are some
myths we must bust:
The myth of 1.2 billion
India is not a market of 1.2 billion people, and
certainly not a middle class sized 300 million, as has
been touted. In fact, according to the 2011 census,
around 600 million do not have access to toilets and
clean drinking water. This does set up a big task for
the government and its social development agenda.
But it subtracts almost half the population from the
projected consuming class. Furthermore, only 56
million people own four-wheelers and the number
of two-wheeler owners stands at 254 million. This
analysis brings to the fore the overestimation that
has misled most of India’s entry and expansion
strategy for the last two decades. Buoyed by
I NDIAN MANAGEMENT NOVEMBER 2015 51