Hindi Hinterland: India’s own emerging markets

14 May,2012

 

By Ritu Midha

 

The four key Hindi Hinterland states – Uttar Pradesh, Madhya Pradesh, Bihar and Jharkhand, till less than a decade ago were considered to be sluggish in their outlook. That’s because consumers there were not really top-of-mind for marketers and if at all they became part of a media plan, especially television, it was done so by default, as Hindi television that catered to metros was available in the hinterlands too, and there was not much effort made to engage  consumers there. If one looks at a broader picture, a similar tale rang true for most states across India, perhaps a decade-and-a-half ago.

 

Cut to the present day, where India is the second-fastest growing market in the world, its middle class is the favoured target group of most marketers (both national and multinational), and in most global consumer surveys Indian consumers emerge to be the most gung-ho among the lot. Of the several states showing signs of speedy growth, the four states that are set for a big leap include:

 

  • Bihar, which is the second fastest growing economy in the country
  • Uttar Pradesh, which is the second largest contributor to the country’s GDP and also has the second largest urban populace in the country
  • Madhya Pradesh, which is touted as being an upcoming economic power centre and a major tourist destination
  • Jharkhand, which has always been an industrial hub One often reads of Indians leaving their cushy jobs overseas and returning to their roots to contribute to, and be a part of, the India growth story. In fact, stories of residents of  Hindi Hinterland moving back home from metros too are not uncommon.

 

Evolution of the Hindi Hinterland consumer

Consumers in these states are evolving rapidly and much of the credit for their evolution could be attributed to access to information and awareness boom. Mayank Shah, Group Product Manager, Parle Products reflects on the consumer psyche: “If you look at aspirations, there is no significant difference in Hindi Hinterland and metros. However, the urge to excel is far greater as they come from a modest background and the readiness to put in effort is definitely there. Even in semi-urban and rural areas, aspirations have grown – they are ready to consume CPG (consumer packaged groups), which is similar to their urban counterparts.”

 

The increased awareness and steady GSDP enhancement has made the consumer ‘consumerist’, whereby it’s not only lowticket items that are catching the consumer’s attention, the high-ticket ones are doing it in a big way too.

 

Kamal Nandi, VP – Marketing & Sales, Godrej Appliances asserts: “Hindi hinterland is becoming an important market for consumption of durable goods. Consumer affordability has gone up, leading to a shift in lifestyle and consumers becoming more urban in their approach. Also, their top priorities are convenience and comfort.”

 

Sushil Bajpai, President, Ghari detergent, too, is of the view that it is no longer the market to be targeted sometime in future. For Bajpai, the time is now: “There is excellent scope for marketers. Industries too are finding it attractive now. Consumerism is growing at a fast pace, and urban markets in Hindi heartland are no different from metros. The need right now is to understand the consumer mindset.”

 

While the big cities in the region are getting ready to rub shoulders with metros, the semi-urban and rural areas too are getting out of dark areas. States Krishna Mohan, CEO, Sales, Emami Limited: “The great ruralurban divide in household consumption patterns has reduced drastically. Bharat is indeed keeping pace with India when it comes to spending on most fast-moving consumer goods. Rural sales contribute more than 40-50 per cent of total sales in various categories for Emami. We have increased emphasis on engaging rural consumers. The market is huge with a lot of potential.”

 

Youth – Change drivers

The change, as is expected, is being driven by the youth who are more adaptable and are akin to the youth from the metro – at least in urban areas. Having said that, awareness and information in semi-urban and rural areas is also growing and so are the aspirations.

 

States Somprabh Singh, Head Marketing, Titan: “In attitude, they are not very different. They are independent, very ambitious and well informed. The only difference is that their exposure to many international brands is lower but that’s the function of the retail environment, which will change in sometime.” And, true to his vision, a change is currently underway across these cities.

 

Harish Bijoor, CEO, Harish Bijoor Consults, believes that the booming Hindi Hinterland is the right place for marketers to be, more so for those catering to the youth. He exhorts: “The robust growth numbers in the education sector is proof enough. Add to it the entertainment market, the market for mobile phones, gadgets of every kind, clothes and accessories, cosmetics, shoes, exercise oriented products, and you have a solid market of the future emerging. There is spurring consumption of not only functional products, but products of cosmetic value as well. Products that relate to health, well-being and proactive health care, rather than just reactive care, are being craved for as well.”

 


As per Bijoor, there is a definite opportunity waiting, especially for brands meant for the youth, and the marketers need to make the most of it. He asserts: “The youth in these towns have a far bigger hunger quotient than the privileged youth in the bigger cities. I would segment this territory into urban, rurban and rural. The hunger deepens as you go from urban to rurban to rural. The opportunity for marketers, therefore, deepens as one penetrates down this strata.”

 

Interestingly, while the debate between urban and rural might take some time to die down, it is the semi-urban areas that are attracting a lot of attention. Interestingly, the leap is expected to be bigger there, as they are keen to catch up with their urban counterparts, who themselves are always in a moving state.

 

States Lloyd Mathias, the marketing honcho with experience around industries: “Youth in the urban areas of these states are quite close to metros in their awareness and aspirations, more so in case of bigger cities like Indore, Lucknow, Bhopal, Patna and Ranchi. Though the semi-urban youth might be a little behind, they are catching up, what with the inroads being made by social media. Moreover, the influencers are the same, which are rapidly dissolving the differences.”

 

Consumption pattern

While rising aspirations is one part of the story, these regions are seeing an increase in activity by discerning marketers who are becoming more conscious of the finer nuances of the region, and are staying away from the one-size-fits-all approach.

 

Explaining the phenomenon, Nandi says: “While we have seen growth in double door refrigerator model in urban markets, in semi-urban markets it is the single door model that works.” However, it has not stopped Godrej from providing the entry-level consumer best value for money. He adds: “Even an entry-level consumer looks for high-end product features. A few years back, toughened glass shelves were there only in high-end model, today they are there in entry-level models as well. Brands have to seek to fulfil aspirations.” The company has also developed a refrigerator with a ‘Stay cool’ feature – powering cooling at the same temperature for 24 hours even after a power-cut.

 

Coming back to the India analogy, the Indian consumer is perhaps one of the most price-conscious in the world. For him, value for money seems to be the mantra, but the consumers’ buying capacity is no longer questioned – the global marketers are tailoring India specific strategies, and the same is true of Hindi Heartland as well. Affirms Mayank Shah: “Instances and opportunities of buying premium products might still be less but they buy if the right quality is delivered at the right price. For example, premium biscuits like Hide and Seek cookies were rare in Hindi heartland, apart from cities like Lucknow, Bhopal and Allahabad. However, now it has changed; we made it available in smaller packs, which has definitely led to sales enhancement.”

 

The growth is not being noticed in purchase of a few specific product categories but across the board – a clear indication that the consumer is not seeking to fill just the need gaps, but is also looking for comfort, convenience and a bit of pampering.

 

States Lloyd Mathias: “There is dramatic growth in categories like wireless broadband, consumer soft goods, mobiles and more; the consumption pattern is similar to other parts of the country. It is the sheer numbers that make it more lucrative.” He adds: “There is a homogeneity in these markets – the same is not true of any other part of the country, be it South, West or East.”

 

Krishna Mohan suggests that marketers look at a closer interaction with the consumer to understand him, and also to make him understand the brand. He asserts: “The way forward is to help consumers, especially in the rural areas, to make the switch from loose to branded or aid new consumption habits, either with novel products or new formats. For us, the categories of cool oil, cool talcs and fairness creams are doing extremely well with double-digit growth.”

 

At this juncture, the Ghari Detergent success story can be an inspiration for many. With its origins in Kanpur, it is the largest selling detergent brand in the country today. And a major focus on Hindi Hinterland has definitely propelled growth for the brand. Sushil Bajpai states: “Hindi hinterland is the biggest market for us; the brand name on our packs is prominently written in Hindi, and then in regional language. RoI in Hindi Hinterland is not lesser than other parts of the country; the key is to convey the right message accurately.”

 

Key challenges

Having assessed the scope that these markets present, one can safely assert that Hindi Hinterlands have come of age. And the marketers, of course, are in no mood to miss the bus. Thus, as per Somprabh Singh, it is important to “Act fast and act now, else be left behind. This is in terms of creating exciting products and new channels that will help reach them.” As per Nandi, it is not just about being there; the key is to be relevant and to belong. He says: “You have a winning story in hand if you are able to provide relevant technology and play a role in them (consumers) fulfilling their aspirations.” Bijoor agrees that relevance and marketspecific approach is mandatory to be successful in these markets: “Marketers need to tailor-make themselves to the market, rather than take their tailor-made solutions to the market. Bottom-up marketing is the mantra to adopt.”

 

Emerging markets indeed

So while there exists an array of roducts that are being tailored to these markets, there is keen interest in interacting with the consumer there and understanding him and there definitely is an increase in the consumer spends. Are these markets ready for all the attention they are getting or would it be a case of yet another opportunity going bust?

 

Laughing off the suggestion, Bijoor states: “Hindi heartland is the new market that is just about emerging. What was derogatorily called the “cow belt” and the”Bimaru states” in the past, is a market that is coming to roost in the future. These states have become very progressive in their development indices. They boast of a GDP growth rate that is, at times, even more robust than the national numbers. This clearly means that these markets will see faster consumer growth in terms of demand and in terms of volumes, value and innovation.”

 

Interestingly, the consumers staying in these markets are a very large demography, accounting for 20 per cent of the country’s population. And there has been a dramatic improvement in the standard of living in these states too. As these markets poise for the next big leap, it’s time the true potential of these markets is understood, and the consumer is serviced to the optimum.

 

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