Professional Documents
Culture Documents
December 2011
The Nielsen Company December 2011 Ranjeet Laungani Executive Director, Nielsen
Article at a glance
For more than a decade, marketers have focused their energies primarily on the thriving metros and the colossal rural Indian opportunity; but as we weigh the still-to-be-had opportunity with the efficiency of reach over the next 5-10 years, marketers should give Middle India a serious look. While metros will remain a staple for marketers and increasing a rural footprint will be critical for volumes in the long run, there is a growth opportunity that is vastly under-rated by many marketers today, which could emerge as a key growth engine for the next 10 years. Middle India, a region made up of approximately 400 towns each with a population of 1-10 Lac, are home to 100 million Indians and today constitute up to 20 percent of the countrys FMCG consumption. Middle India will grow from an FMCG market worth INR 287 Billion (5.74 Billion USD) today to over INR 4 Trillion (80 Billion USD) in value by 2026 and it is about time marketers took notice.
Fast Facts:
Middle India has outpaced the all-India growth story: Since 2002, the FMCG sector grew 3.5 times in Middle India, compared to 3.2 times in all-India. Middle India per capita FMCG consumption stood at over INR 2,800 (56 USD) in 2010 versus the all India number at just under INR 1,200 (24 USD). The top 10 FMCG players in Middle India have added INR 35.8 Billion (716 Million USD) from these 400 towns in 2 years alone. Forty-nine of 81 FMCG categories tracked by Nielsen in early 2011 saw faster growth rates in Middle India than their allIndia rates. As of May 2011, FMCG per-dealer offtakes increased to 14+ percent for Middle India up 2.7 points from 2010 versus an increase of 1.5 points for metros. The number of FMCG stores in these 400 towns has seen a rapid increase: more than 250 new stores were added per town in the last three years. The purchasing power of the contemporary Middle India consumer and the sheer plethora of goods and services available are unprecedented. This market is expected to continue growing at a healthy rate at least for the next decade, which offers most companies ample lead time to strategize on how to tap into this segment. Marketers who make an aggressive foray into Middle India over the next few years will need to have a good understanding of changing consumer aspirations and be mindful of some of the infrastructural drawbacks if they are to manage this gold rush successfully. By studying the Middle India consumer profile, marketers will be better equipped to cater to this creamy middle layer and define their growth strategies in these smaller towns. The Middle India demand revolution has begun. The Gold Rush is here.
While marketers remain fixated on opportunities at the bottom-of-the-pyramid and in metro regions, not many are aware that only the metros and Middle India (1-10 Lac population towns) have outpaced the all-India growth story in the last 8 years. Even today, Middle India leads the pack across urban and rural segments for FMCG value growth rates. Middle India has been outpacing the all-India FMCG story for many years now
FMCG Value Sales (Rupees Billion)
Growing middle India; approximately 400 towns Fast growing but very spread out (Approximately 7,500 towns) 70% of the population but inefficient reach a challenge for marketers Steady growth; in the spotlight for the last 5+ years Bread & butter for most marketers for many years now; competitive
Strong Value Growth: recently Middle India is growing at 20% (up 3+ points from 2010)
Value Growth %
MAT May All India Metro 1-10 Lac towns Rest of Urban Rural
Source: Nielsen
2011
Delta
The 100-Million-strong population is only one of the reasons why marketers should take note of Middle India. In addition to the large size of the Middle India population, the increase in household incomes and rise in spending power makes it an attractive market for consumer product companies. Many studies in recent years have focused on the rise of the Indian middle class, pegging this group of striversannual household income of at least INR 500,000 (10,000 USD)and seekers annual household income of at least INR 200,000 (4,000 USD)to rise to over 500-Million-strong in 15 years. We believe this rising middle class story will disproportionately advance the expansion of Middle India over the next decade. Middle India: home to 100 million Indians
354 towns
42 towns
68 million
31 million
The expansion of Middle India shows that the demand revolution is percolating to the next tier of cities. Why do these cities matter? These cities are ready to behave like the metros of tomorrow. Of the total INR 1.4 Trillion (28 Billion USD) in FMCG sales in 2010, goods worth about INR 287 Billion (5.74 Billion USD) were consumed by the Middle India population. This number makes up more than 20 percent of the overall FMCG sales, and 30 percent of the urban FMCG sales. Middle India is also home to 30 percent of all urban stores, comprising over 900,000 Million stores today. In addition to this, the annual per capita FMCG consumption of Middle India towns touched INR 2,800 (56 USD), which exceeded the national average by INR 1,600 (32 USD). This is a significant achievement for these smaller towns, considering the fact that the metros breached the INR 2,800 (56 USD) mark as recently as 2009.
# of towns 5-10L
Population
1-5L
Source: Nielsen
1-10 Lac Towns contributed INR 287 billion in FMCG sales in 2010
This is 20% + contribution to all India FMCG and 30% + contribution to all urban sales
1-10 Lac Towns are home to more than 910K FMCG stores
This makes up for 11% of all FMCG stores in the country & more than 30% of all Urban stores
Versus a national average of under INR 1200; of note, metros have only breached INR 2800 in 2009
The growth figures for different FMCG categories also reveal a strong and vast market potential for Middle India. Out of the total 81 FMCG categories, 49 product categories across personal care, over-the-counter drugs, household care, and food outgrew the all-India rate. Over 30 categories saw growth rates faster than 1.15 times the all-India rate. The top five fastest growing categories like diapers, scourers, liquid toilet soaps, acne preparations and air fresheners, which fared strongly in the past year, performed even better in 2011, indicating continued possibility of robust growth in the near future. Interestingly, the focus on hygiene, health, personal grooming and convenience seems to be driving the rapid growth in these towns. Middle India is also accepting evolved categories like breakfast cereals, air fresheners, acne preparations, and liquid toilet soaps. The metros took on to many of these categories in a big way just a few years ago and Middle India does not want to be left out. In these 1-10 Lac towns, 49 of the 81 categories outgrew the all-India rate in 2011 vs. 2010
1-10 Lac Towns Value Growth indexed to All-India (MAT May 2011 over 2010)
Source: Nielsen
Marketers have been taking notice of Middle India: in the news in recent times
Van Heusen, Louis Philippe eye smaller towns, cities (June 2011) Quality tea now finding takers in smaller cities (April 2011)
FitnessOne to invest Rs. 30 cr to expand in tier II, III cities (April, 2011)
BPOs offer jobs to school pass outs in smaller cities (April, 2011)
Household Care
Food
Indias Fortis to open 25 lowcost hospitals over 3 years in smaller towns, especially in tier II and Tier III cities / June 2011 Bacardi seeks to spread cheer to smaller cities (July 2011)
1.5X or more
Omaxe to focus on small towns (as inventory is pilling up in tier-1 cities) (June, 2011)
After shave lotions, Nail enamel, Coconut oil, Shaving preparations Antiseptic creams, Antiseptic liquids, Acne preparations, Baby oils/ massage
Chayavanprash
1.25X or more
1.15X or more
Breakfast cereals, Chewing gum, Squash cordials & drinks, Biscuits, Milk foods, Baby foods, Chocolates
Source: Nielsen
Source: Nielsen
These developments augur well for FMCG companies, especially in light of the fact that this market is still in a nascent stage, and is expected to grow substantially in the next five years. The rise in demand for consumer products and relatively lower penetration of FMCG companies in these towns means that competition is not as fierce in these towns as would be in larger metros. A few major players with adequate capital and wide distribution networks are already cashing in on the opportunity. The annual turnover of the top ten FMCG players from the Middle India segment rose more than 42 percent by INR 35.8 Billion (716 Million USD) in just two years between 2009 and 2011. Strong Value Growth: Just the top 10 FMCG players have added 35.8 Billion from Middle India in 2 years
on a variety of products that enhance their standard of living. They are accepting categories that never were part of their consumption basket. This has opened up a window of opportunity for FMCG companies to introduce products that were initially brought to market primarily for the metros. The size of the opportunity will multiply in the next few years as these new categories will see deeper penetration levels across a larger household base.
The top 10 FMCG players in these towns clocked INR 86 Billion in value sales in 2009 +42%
The same players had a turnover of INR 121 Billion from these towns in 2011
Per Dealer Offtake Growth % MAT May All India 2010 12.1 14.5 11.7 9.7 15.1 2011 13.0 16.0 14.4 12.8 11.4 Delta 0.9 1.5 2.7 3.1 -3.7
Its not just a story of sheer volumes, Middle India is also capturing marketers attention due to a shift in demand, a direct consequence of peoples rising aspirations for a better lifestyle in these regions. Consequently, there is an increase in the Middle India consumers willingness to spend more
A strong indicator of this trend is the rise in per dealer offtakes which represents the average sales per dealer over time. The per dealer offtake in Middle India saw a rise of 2.7 points in 2011, compared to an increase of 1.5 points in metropolitan cities in the same period. This is a growth of more than 14 percent over the previous year (MAT May 2010). For some FMCG categories like cheese, packaged rice, diapers, etc., the increase in per dealer offtake was quite substantial, at more than 30 percent! Per dealer offtakes for almost a dozen and a half categories in Middle India towns grew at over 20 percent in the last one year alone. The top ten FMCG companies in these Middle India towns saw a spurt in per dealer offtakes, which grew 17% in one year.
Consumption baskets in these towns are evolving categories as varied as breakfast cereals, air fresheners, and glass cleaners which earlier saw little acceptance in these towns are growing much faster in these towns than at the all-India level.
Source: Nielsen
May 2011 926K 80K 1501 Increase of 250+ per town Increase of 31% Increase of 37%
Source: Nielsen
The total number of stores in these towns rose from 823,000 in June 2008 to 926,000 in May 2011, an average addition of over 250 stores per town. The top ten FMCG players in the 1-10 Lac population towns have aggressively expanded in these areas, adding 29,892 stores on average in the last year alone and 55,767 stores on average in the last two years. More number of stores translates into an increased supply infrastructure, which is helping marketers push products to consumers faster. Not surprisingly, the distribution reach of as many as 15 categories in the FMCG sector has grown by over 5 All Commodity Value (ACV) distribution points in the 3-year period from May 2008 to May 2011. Marketers who had recognized the potential and invested in these regions a few years ago are, today, laughing their way to the bank. When we evaluated some of the top national FMCG players on their Middle India performance, two things were clear: 1. Not all national players were optimally leveraging Middle India for growth 2. Smaller national players were giving the heavy weights a fight in these 1-10 lakh towns
2010 Rank
1 2 3 4 5 6 7 8 9 10
A case worth mentioning: it is interesting to note that Cadburys ranks #5 in value sales in 1-10 Lac towns versus a #6 ranking at an all-India level. In the last 3 years, Cadburys has added 30% more stores in these towns (the biggest leap of any top-10 player) and the results are showing! In fact, in the last quarter of 2010, it actually moves to #4 place in 1-10 Lac towns.
Household Care
Glass cleaners, Utensil cleaners, Toilet cleaners, Other Scourers, Batteries,
Food
2X or more
Chayavanprash
1.5X or more
All-India Value
Hindustan Unilever Limited Procter & Gamble Nestle India Parle Products Britannia Inds Cadbury India ITC Colgate-Palmolive Dabur Godrej Consumer Products
1.2X or more
Washing Powder, Home Insecticides, Soap Cakes/Bars Floor Cleaners, Utensil Cleaners
Source: Nielsen
Demonstrate better All India performance vs Middle India Demonstrate better Middle India performance vs All India
The buoyant Middle India story is not restricted to just the larger Middle India towns. In the 350+ 1-5 Lac population towns, the story is equally compelling. Not only are these towns growing at over 20 percent, but 56 of the 81 categories are also outperforming the all-India growth rates. 15 categories are exploding in these 1-5 Lac population towns with over 40 percent value growth in 2011 over 2010. Products as varied as skin creams, coffee, baby oils, fragrances, and chocolates are outpacing the all-India growth story. Even these 1-5 Lac population towns do not want to be left behind. 15 categories are growing at over 40%. The Top 8 categories grew in value at an average rate of 70% in 2011 over 2010 and this was 2 times their all-India growth rates.
Food Household Personal
Liquid Toilet Soaps, Hair conditioners, Acne Preparations, Diapers Fragrance, After Shave Lotion , Twin Blades
And consumer confidence is reasonably buoyantOn the Middle India continuum there are several towns like Anantapur that come close to the consumer buoyancy in larger towns
Stories like that of Anantapur are promising when compared to Pune, which has been on the development path for many years now.
Middle India 97
114 Anantapur
Bhatinda 79 Jhansi 96
Nanded 99
Nielsen also evaluated the consumer confidence of these smaller towns. Nielsens research indicates that while the consumer confidence index in the towns with 1-5 Lac population is lower than that of a benchmark mini-metro town like Pune, many smaller towns are performing much better than several developed and developing markets across the world. Anantapur, for instance, has a consumer confidence index of 114, which is fairly close to Punes 127, and scores higher than many other urban areas. Importantly, consumer confidence in Middle India spans a continuum, where towns like Anantapur come surprisingly close to the optimism of the larger mini metros and towns like Bhatinda complete the spectrum at the lower end. These numbers indicate that as marketers decide to be part of the gold rush, they have the liberty of cherry picking towns in the first few years. In addition, a one-size-fits-all approach may not work for all these smaller towns. Factors that influence stronger consumer buoyancy include the level of employment, infrastructure growth (including education infrastructure), and proximity to a metro. Many FMCG giants have leveraged factors like steady flow of capital, wide distribution networks and better understanding of the local markets to establish themselves in these towns. Nielsen found that some companies, which do not rank at the top in terms of all-India FMCG presence, have expanded
Of note, the consumer confidence index for Middle India while lower than Pune is much better compared to many developing and developed markets world wide.
Source: Nielsen
aggressively and gained a stronghold in the towns with 1-5 Lac populations - players like Ruchi Soya and Adani Wilmar are among the top FMCG players in these smaller 1-5 Lac population towns. It is also evident that while certain bigger national players have made these towns their focus, others are still to catch on to the Middle India bandwagon. The high value growth in these 1-5 Lac population towns supports the longerterm Middle India story it is not only the larger of these towns that will sustain this story in the coming decade. The demand revolution has percolated deep into these towns.
The buoyant Middle India story is not restricted to just the larger Middle India towns. In the 350+ 1-5 Lac population towns, the story is equally compelling.
While some FMCG players have been ahead on the Middle India curve, others have opportunity to catch up.
2010 Rank
1 2 3 4 5 6 7 8 9 10
All-India Value
Hindustan Unilever Limited Procter & Gamble Nestle India Parle Products Britannia Inds Cadbury India ITC Colgate-Palmolive Dabur Godrej Consumer Products
Demonstrate better All India performance vs Middle India Demonstrate better Middle India performance vs All India
Source: Nielsen
Although the infrastructure in smaller towns may not be comparable with that in other urban areas, Nielsens findings indicate that these towns have made significant strides in ramping up basic infrastructure like schools, hospitals and public transport. A steady rise in employment rates, income and spending are expected to have a positive impact on the economy of these towns in the next few years. A stronger infrastructure would aid marketers in pushing their products and help achieve economies of scale. However, bugbears like corruption and weak law and order still persist, and these will need to improve fast, so that the Middle India sheen is maintained.
Source: Nielsen
children in English medium schools, as it opens the doors to a brighter career. Nielsens data shows that the Middle India populations desire to join the best institutions like IIMs and IITs, at 47 percent, is nearly at par with that of an educationcentric city like Pune. While post graduation studies in Middle India find favor with only 42 percent of the populationnearly half the figure of Punean impressive 50 percent of this stratum aspires to join professional courses like medical and engineering versus 57 percent in Pune. While the numbers are not at par with the urban regions across the board yet, they indicate a growing awareness about the importance of education.
Source: Nielsen
The number of schools, colleges and educational institutions that have sprung up in these small towns has kept pace with the growth in the education sector in India. The rate at which these institutions have proliferated has outshone the rate of growth in other infrastructure facilities like roads, security, water supply, etc. For instance, Nielsens figures indicate that Jhansi, a small Mid-India town, has outgrown Punes development in the education sector in terms of consumer perception over the last few years. Moreover, education opportunities in these towns are not only compelling people to stay back, but also drawing people from even smaller towns. One area where development is still needed is in the higher education (post-graduate) sector.
Source: Nielsen
3. Personal Grooming
Personal grooming has become increasingly important to Middle India personal care categories dominate the list of Middle India categories outpacing all-India value growth. Affordability, access, and awareness have contributed to the rapid rise of the personal care segment.
Source: Nielsen
Affordability, access, and awareness have contributed to the rapid rise of the personal care segment.
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2010 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Categories After Shave Lotions Batteries Other Scourers Cleaners - Glass Chyavanprash Soap Cakes/Bars Nail Enamel Coconut Oil Pktyp Shaving Preparations Antiseptic Creams Confectionery - Cough Lozenge All Air Freshners Antiseptic Liquids Acne Preparations Packaged Tea Cleaners - Utensil Baby Oils / Massage Glucose Powders Liquid Toilet Soaps Breakfast Cereals Confectionery - Total Gum Sqsh Crdls & Sft Drn Biscuits Milk Foods Shoe Polishes
Middle India Value Growth Rate 10% 5% 71% 22% 28% 9% 23% 15% 14% 27% 29% 48% 37% 49% 16% 10% 26% 17% 57% 40% 27% 22% 28% 21% 13%
Growth Index Over All-India Rate 971% 291% 194% 188% 184% 180% 168% 163% 150% 146% 142% 136% 136% 135% 133% 131% 130% 128% 125% 123% 122% 121% 120% 119% 119%
Source: Nielsen
Middle India is keen on expanding their consumption basket with newer categories
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Middle India
Middle India
Source: Nielsen
Source: Nielsen
It is encouraging to see that a majority of the population in Middle India believe in providing equal opportunities for boys and girls, with 75 percent people in smaller towns like Bhatinda voting for the idea, compared to 90 percent in Pune. Though women empowerment initiatives have been taken, a lot more needs to be done before the impact of these programs is truly felt in society. Many women aim for tertiary education and making a contribution to the household income. However, certain inhibitions prevent them from achieving their goals. Nielsen research found that lack of safety, corruption of moral values and an inferiority complex were major roadblocks for the progress of women in Middle India. Over the next decade, the role women play in shaping the Middle India story should only move North given the upside.
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Source: Nielsen
Source: Nielsen
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mobile phone
for personal or office use.
Source: Nielsen
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9. Cable TV dominance
Cable TV is king in Middle India and serves up as the main source of entertainment across age groups, providing marketers with a captive audience like no other.
Source: Nielsen
Source: Nielsen
Source: Nielsen
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Source: Nielsen
Source: Nielsen
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Consumer Snapshot
Middle India has a distinct personality. In some cases, there is a stark difference in the values and beliefs of the population in Middle India compared with that in the larger metros, understandably so, given the disparity in education standards, surroundings, upbringing, and other societal factors. Adopting a one-size-fits-all strategy, hence, may not help marketers achieve the desired results in Middle India. Knowing the pulse of various consumer classes would hold the key to success. While some Middle India cities will probably behave more like a mini metro others might come very close to being a neo-urban area etched with rural consumer thinking. Nielsen identified a few broad themes that could help marketers in decoding the Middle India consumer. While this is not an all-inclusive profile, it should help marketers appreciate the difference in consumer needs and aspirations vis--vis some of the larger cities and also recognize the need for consumer deep dives before a foray is made into these towns. Some attributes that can be associated with a Middle India youth, housewife and a working male professional are highlighted below.
Nanded: Contrary to the youth in Bhatinda, the youngsters from Nanded prefer to settle in their hometown, preferably after pursuing education in larger cities. Nielsen research shows that internet penetration in the city too is lesser than that in Bhatinda. This segment prefers affordable mobile phones with basic functions like games, camera, FM radio, etc. Youth from this town frequent Chinese and fast food joints, and the young males pay special attention to their health by staying fit. Jhansi: Compared to other cities, the youth from Jhansi are not very ambitious. Internet penetration is quite low, and youngsters are open to experimenting with cuisines, relishing Chinese food as often as possible. In gadgets, they prefer mobile handsets with features like FM radio, torch and games, which they consider essential. They are less brand conscious, and follow a simpler lifestyle compared to their counterparts in some of the other Middle India cities. Anantapur: Youngsters from Anantapur are ready to explore other cities for better education and employment opportunities. As a result of relatively high internet penetration, the youth here are tech savvy and like indulging in computer games. This may be the reason why they prefer internet access on their mobile phones, besides common features like camera, games and FM. Due to their exposure to a slice of life in Hyderabad, which is located close by, they have experienced the culture of hanging out at Pizza and Burger joints.
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too much attention to his style of dressing, the Middle-Indian working man scores low on the fashion quotient. However, a keen interest in healthy living and personal grooming has been noticed in his profile lately.
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Employment opportunities
Job opportunities across Middle India are not adequate yet to sustain its growth path. Research from Nielsen shows that only 38 percent of the Middle India youth is willing to stay back in their hometowns as compared to 62 percent in Pune. Although the tough job market today has forced students to settle away from their homes and families, they show a willingness to stay back if the employment scenario improves. Lack of employment has also led to a rise in crimes and even drug abuse in certain towns like Bhatinda. With many companies and retailers making sizeable investments in these towns, it is expected that the virtuous cycle will improve the job market overall. That said, huge private and public investments will be needed over the next few years to ensure that ample employment opportunities exist in the medium-to-long term. Job creation will be one of the largest determinants of growth in Middle India over the next decade.
Women empowerment
Although the status of women in Middle India is improving, the fairer sex lacks adequate opportunities for employment and education. Moreover, certain inhibitions and perceptions are impeding their progress. For instance, parents are apprehensive about their daughters safety when they step out to work or pursue higher education. Teaching is considered a safe profession as it does not entail late working hours or traveling. Similarly, many believe that if a girl is well-qualified, it may be difficult to find a suitable groom for her. This, coupled with the age-old custom of dowry, is a major issue in Middle India towns like Jhansi. Interestingly, the amount of dowry expected tends to increase if the girl is highly educated, especially in smaller towns like Nanded. While women empowerment is happening in small doses, a lot needs to be done quickly if women are to play an equal role in the growth of Middle India.
Neighbourhood moneylenders
Banks
Pune
Cooperatives Friends/relatives
Middle India towns
Source: Nielsen
Simplified Banking
In this age of internet banking, many Middle India denizens still rely on local moneylenders for their credit requirements. Almost 26 percent of the population still borrows from neighborhood moneylenders, whereas in a developed city like Pune, this number is a miniscule 3 percent. Such high dependence on moneylenders may be due to the populations difficulty in transacting with the advanced banking system. This is apparent when only 45 percent of the Middle India population approaches banks to avail loans as compared to 69 percent in Pune. Reserve Bank of India data over the past 3 decades suggests that scheduled commercial banks deposit accounts in semi-urban and urban India have not grown as fast as accounts in rural and metropolitan areas implying that there is a lot of opportunity to improve penetration of basic banking. Considering the propensity of consumers in these towns to save & invest in gold, property and fixed deposits, there is a huge opportunity for banks and other financial institutions to promote their products. However, to exploit this market, financial processes need be simplified to a large extent.
Job creation will be one of the largest determinants of growth in Middle India over the next decade.
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Market Sizing
The FMCG market in Middle India is expected to grow manifold in the next decade and a half. This predicted growth for the coming 15 years will be unprecedented, and will have huge implications for consumer product companies.
Source: Nielsen
The Middle India market size of the FMCG sector, which is currently about INR 287 Billion (6 Billion USD), is expected to cross the INR 1 trillion (20+ Billion USD) mark by 2018 and INR 4 trillion (80+ Billion USD) by 2026. This signifies a remarkable opportunity for the next decade and a half.
Entertainment options
When it comes to entertainment, there is a dearth of options. Families and students are usually hooked on to cable television or frequent shopping malls, restaurants and parks in their vicinity for leisure. A moviegoing culture is yet to catch on among this section, as most cinema halls are considered inappropriate for women and families. Middle India wants to be entertained, and this industry has a lot of potential for growth in the coming decade.
Source: Nielsen
The population in this region boasts of per capita FMCG consumption of over INR 2,800 (56+ USD) more than 2.3 times the figure for all-India. This number is estimated to reach INR 31,000 (620+ USD) by 2026, which will be more than double of what an average Indian will consume then. These numbers should be music to the ears of marketers and retailers who are planning to expand aggressively in the coming few decades. It is about time marketers started calibrating strategies to fulfill the needs of this segment.
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Marketers will need to cultivate their brands with Middle India and build loyalty now while habits are changing, so that they can flourish when spending increases manifold in the coming decade.
Smaller packs and customization of small-sized packages, homes, cars, etc. would address the specific requirements of smaller families.
Media evolution
While there has been some improvement in infrastructure in 1-10 Lac population towns, the penetration of internet is still negligible. Most consumers rely on cable TV for their information and entertainment requirements. This medium caters to a vast group of consumersfrom youngsters, children, working men to housewivesand is expected to maintain its stronghold for the coming few years. Cable TV can hence become an ideal medium for marketers to promote their products among all age groups. A very small percentage of the Middle India population, which mainly consists of youth in select areas, has access to the internet. This gap in the market can be tapped by internet service providers. Those who do have internet access are engaged in social media activities like their counterparts in bigger cities. Companies that offer youth-centric products can hence leverage social media marketing (along with a relevent TV campaign) to popularize their offerings, especially gadgets, personal care products, and cell phones.
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Celebrations
The Middle India population celebrates festivals with great enthusiasm, which is reflected in their readiness to spend more time and money on them. Nielsen data highlights that this segment is heavily influenced by Western culture, especially when it comes to celebrating festivals, and is slowly shifting from traditional gifts to celebration packs and ready-made gift options. Besides, there is a rising importance of celebrations like Valentines Day, Mothers Day, Teachers Day, etc. in the 1-10 Lac population towns. Considering that the trend is expected to attract even more consumers in the coming years, companies dealing in festive offerings like flowers, gifts, greeting cards, chocolates, etc. can expect a strong growth in revenues. FMCG companies can leverage this trend by focusing on seasonal, festive, and gift packs.
they purchase, including food items. In addition to this, women are increasingly participating in big ticket household purchases like consumer durables and electronics. White goods companies should take note of these trends to design in-store consumer experiences and form promotional strategies to grab the attention of decision makers for their products. When it comes to opportunities for women, Middle India is making slow but steady progress. However, longstanding problems like inadequate security and dowry still persist. Companies setting up shop in these regions that want to play a role in ensure women participation in the work force need to ensure the safety of their female staff through facilities such as pick up and drop, flexible work timings, etc.
Mobile telephony
Mobile phones have a stronghold in Middle India. More than 94 percent of the population claims to own a phone for personal or office use. Factors like affordability of handsets and cheap call rates are driving the growth of mobiles phones in these regions. Consumers, especially youth, are more open to experimenting with handsets, and are excited about newer technologies. If service providers offer better mobile internet services in small towns at affordable rates, it is likely that a wave of consumers will skip the computer-led internet access phase and unlock the power of the web through mobile devices. However, this is possible only if telecom companies make internet usage appealing, affordable, and relevant to the Middle India population.
Mobility
More than one half of the Middle India households own a bicycle, about one-third own a 2, 3 or 4 wheeler and much less than one in twenty households own a car. With income levels in 1-10 Lac population towns on the rise and a steady increase in both the vehicle options and financing, consumers will gradually upgrade their vehicles from bicycles to two wheelers and from two wheelers to automobiles. Considering the size of population in the region, such upgrades will open up a huge market for automobile companies. Companies dealing in infrastructure development will see a growth too, as the Government will strive to provide better transportation facilities to match Middle India aspirations.
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About Nielsen
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, please visit www.nielsen.com.
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Copyright 2011 The Nielsen Company. Copyright 2011 The Nielsen Company.