The heterogeneity that characterizes the modern Indian Consumer has created a maze that marketers would like to unravel in order to target their product and services
Packaged consumer goods take up around one-tenth of the total expenses of urban Indian households. The expenditure can be divided into two main categories--processed food and personal care, accounting for 43% and 53%, respectively, with betel leaves, tobacco and intoxicants making up the remaining 4%.
With consumer aspirations merging across India, a large part of these goods have become daily necessities for urban households, and there are various brands catering to the disparate income segments.
Over the past decade, there has been a huge surge in this market, and today there is a wide range of goods and brands in the market, with the high end creating the aspirations for consumers all across the country.
Over the past decade, there has been a huge surge in this market, and today there is a wide range of goods and brands in the market, with the high end creating the aspirations for consumers all across the country. Looking at the income segments, the largest contributor to the personal care and home products market comes from the lowest income groups because of their large population size making up close to three-quarters of the urban population.
The two lowest income segments account for nearly half the total urban market for these products. At the other end of the charts, 6% of the urban population--households earning more than `10 lakh a year--account for close to 20% of the urban market.
The two lowest income segments account for nearly half the total urban market for these products. At the other end of the charts, 6% of the urban population--households earning more than `10 lakh a year--account for close to 20% of the urban market.
So with rising incomes, packaged con- sumer goods take up relatively lower shares of household budgets, yet at the same time the average annual expenditure per household on such products increases, from less than `10,000 for the poorest households to more than `75,000 for the richest households. Discretionary income in the hands of the richer households is spent on high-end products, and this is true for processed food, personal care as well as intoxicants.
There are again some regional variations in how households spend their money.
The northern states spend a larger part of their spend on personal care, instead of on processed food. They have the lowest per-household average expenditure on processed food and the second highest per-household expenditure on personal care.
The southern states have the highest per-household expenditure on both processed food and personal care. Interestingly, Kerala stands out as the state with the highest preference for processed food, followed by Tamil Nadu, while Chhattisgarh and Punjab have the highest preference for personal care products. The largest city markets for such goods are of course Mumbai and Delhi, which together make up a little more than 16% of such urban spending.
While the richest households account for close to 20% of the overall urban Indian spending on packaged consumer goods, in some cities these households contribute more than one-third of the market. Gurgaon, Gandhinagar, Faridabad, Panchkula and Noida are the top five cities here.
Clearly, the kind of goods being sold in these markets would be quite different from the cities where the richest house- holds account for less than 10% of total expenditure--Bikaner, Amravati, Bhopal and Salem, to name a few. In cities such as Bhopal and Salem, the lowest income segment accounts for more than 40% of total spending.
Clearly, the kind of goods being sold in these markets would be quite different from the cities where the richest house- holds account for less than 10% of total expenditure--Bikaner, Amravati, Bhopal and Salem, to name a few. In cities such as Bhopal and Salem, the lowest income segment accounts for more than 40% of total spending.
Given the range of goods and brands that exist in the large market, finer cuts within each income segment and within the various goods that make up the segment are indispensable to marketers. The diversity across the country, however, does go to show that there is a market some- where for everything, a market that is waiting to be tapped.
(Source-: mintlive.com)