Managingthe Middle India   Gold Rush  December 2011
Managing the Middle                                                                            The Nielsen Company        ...
Middle India on top                                                               While marketers remain fixated on opport...
The growth figures for different FMCG categories also reveal     Why does Middle India matter?                            ...
Source: NielsenThese developments augur well for FMCG companies, especially          on a variety of products that enhance...
“A strong indicator of this trend is the rise in per dealer offtakes– which represents the average sales per dealer over t...
Source: NielsenThe total number of stores in these towns rose from 823,000                    A case worth mentioning: it ...
The buoyant Middle India story is not restricted to just thelarger Middle India towns. In the 350+ 1-5 Lac population     ...
While some FMCG players have been ahead on the Middle                    1. Education on a higher pedestalIndia curve, oth...
The number of schools, colleges and educational institutionsthat have sprung up in these small towns has kept pace withthe...
Middle India    Growth Index      2010             Categories                      Value Growth     Over All-India      Ra...
Middle India                             Middle IndiaSource: NielsenSource: Nielsen6. Steady women empowerment            ...
Source: Nielsen7. Durables on the purchasing horizonThe penetration levels of durables in Middle India versus largercities...
8. Mobile as a multi-faceted deviceThe mobile is a multi-faceted device for Middle India. Thepopulation in these areas is ...
9. Cable TV dominanceCable TV is king in Middle India and serves up as the mainsource of entertainment across age groups, ...
Source: Nielsen11. Selective openness to western influence                         12. More to celebrate: prominence of fe...
Consumer Snapshot                                                    Nanded: Contrary to the youth in Bhatinda, the youngs...
City-wise profile of a housewife                                     too much attention to his style of dressing, the Midd...
What does Middle India still need                                     Addressing water scarcityto thrive?                 ...
Number of Deposit accounts in thousands (scheduledcommercial banks)                                                       ...
“Implications for business                                                                                     Marketers w...
Celebrations                                                         they purchase, including food items. In addition to t...
Nielsen middle-india-report-2011
Nielsen middle-india-report-2011
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Nielsen middle-india-report-2011

  1. 1. Managingthe Middle India Gold Rush December 2011
  2. 2. Managing the Middle The Nielsen Company December 2011India Gold Rush 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 country’s 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 all- India 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.2 Copyright © 2011 The Nielsen Company.
  3. 3. Middle India on top While marketers remain fixated on opportunities at the bottom-of-the-pyramid and in metro regions, not manyWhile 70 percent of the Indian population still resides in rural are aware that only the metros and Middle India (1-10 Lacareas, poor reach and inadequate infrastructure have made it population towns) have outpaced the all-India growth story indifficult for marketers to fully tap into the potential of these the last 8 years. Even today, Middle India leads the pack acrossmarkets quickly. Most FMCG companies have concentrated urban and rural segments for FMCG value growth rates.their energies on the metro and mini-metro regions in the past10 years. Although some companies have partially penetrated Middle India has been outpacing the all-India FMCG story forthe Middle India market, many tend to overlook smaller towns, many years nowignoring the fact that these markets are perhaps easier to FMCG Value Sales Year Year Multiplepenetrate due to relatively sparse competition. Considering (Rupees Billion) 2002 2010 Increasethe expected growth of population in this area, rise in incomesand aspirations and the expected influx of people from even All India 442 1,425 3.2smaller towns to Middle India, this market is expected to create Metro 110 412 3.8huge opportunities for marketers in the coming few years. Middle India 83 287 3.5 Rest of Urban 98 245 2.5 “Still-to-be-had” Opportunity + “Medium-term ROI” Scale Rural 151 480 3.2 Urban: Middle India Growing middle India; approximately Source: Nielsen (1-10 Lac towns) 400 towns Rest of Urban Fast growing but very spread out Strong Value Growth: recently Middle India is growing at 20% (<1 Lac towns) (Approximately 7,500 towns) (up 3+ points from 2010) 70% of the population but inefficient Rural India reach a challenge for marketers Value Growth % Steady growth; in the spotlight for the MAT May 2010 2011 Delta Urban: Mini Metros last 5+ years All India 18.5 18.8 0.3 Bread & butter for most marketers for Urban: Metros Metro 16.4 19.1 2.7 many years now; competitiveSource: Nielsen 1-10 Lac towns 16.9 20.1 3.2 Rest of Urban 15.6 19.5 3.9The 100-Million-strong population is only one of the reasons Rural 22.8 17.5 -5.4why marketers should take note of Middle India. In addition Source: Nielsento the large size of the Middle India population, the increasein household incomes and rise in spending power makes it an The expansion of Middle India shows that the demandattractive market for consumer product companies. Many revolution is percolating to the next tier of cities. Why dostudies in recent years have focused on the rise of the Indian these cities matter? These cities are ready to behave like themiddle class, pegging this group of strivers—annual household metros of tomorrow. Of the total INR 1.4 Trillion (28 Billionincome of at least INR 500,000 (10,000 USD)—and seekers— USD) in FMCG sales in 2010, goods worth about INR 287annual household income of at least INR 200,000 (4,000 Billion (5.74 Billion USD) were consumed by the Middle IndiaUSD)—to rise to over 500-Million-strong in 15 years. We population. This number makes up more than 20 percent of thebelieve this rising middle class story will disproportionately overall FMCG sales, and 30 percent of the urban FMCG sales.advance the expansion of Middle India over the next decade. 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 Middle India: home to 100 million Indians 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 354 42 68 31 towns towns million million the metros breached the INR 2,800 (56 USD) mark as recently as 2009. # of towns Population 1-5L 5-10LSource: Nielsen3 Copyright © 2011 The Nielsen Company.
  4. 4. The growth figures for different FMCG categories also reveal Why does Middle India matter? 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 1-10 Lac Towns 1-10 Lac Towns Annual per contributed INR are home to capita FMCG food outgrew the all-India rate. Over 30 categories saw 287 billion in more than 910K consumption over growth rates faster than 1.15 times the all-India rate. The top FMCG sales FMCG stores INR 2800 five fastest growing categories like diapers, scourers, liquid in 2010 toilet soaps, acne preparations and air fresheners, which fared strongly in the past year, performed even better in 2011, This is 20% + This makes up for Versus a national contribution to all 11% of all FMCG average of under INR indicating continued possibility of robust growth in the near India FMCG and 30% stores in the country 1200; of note, metros future. + contribution to all & more than 30% of have only breached urban sales all Urban stores INR 2800 in 2009 Interestingly, the focus on hygiene, health, personal grooming and convenience seems to be driving the rapid growth in theseSource: Nielsen 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 Marketers have been taking notice of Middle India: a big way just a few years ago and Middle India does not want in the news in recent times to be left out. Van Heusen, Louis Philippe Quality tea now finding eye smaller towns, cities takers in smaller cities In these 1-10 Lac towns, 49 of the 81 categories outgrew the (June 2011) (April 2011) all-India rate in 2011 vs. 2010 1-10 Lac Towns Value FitnessOne to invest Rs. 30 cr to BPOs offer jobs to school pass Growth expand in tier II, III cities outs in smaller cities indexed Personal Care Household (April, 2011) (April, 2011) Food to All-India / OTC Care (MAT May 2011 over India’s Fortis to open 25 low- Blue Dart to spread wings 2010) cost hospitals over 3 years in to tier 2,3 towns After shave smaller towns, especially in tier (April, 2011) Batteries, lotions, Nail II and Tier III cities / June 2011 Scourers, 1.5X or enamel, Glass Chayavanprash more Coconut cleaners, Soap Bacardi seeks to spread cheer Omaxe to focus on small oil, Shaving to smaller cities towns (as inventory is pilling cakes/ bars preparations (July 2011) up in tier-1 cities) (June, 2011) Antiseptic creams,Source: News Reports Antiseptic Air fresheners, Cough lozenges, 1.25X or liquids, Acne Utensil Packaged tea, more preparations, cleaners Glucose powdersMiddle India: firing on both Baby oils/cylinders massageCash registers in stores all over Middle India seem to beringing off the hook, thanks to the growing consumer wallets, Breakfast cereals, Chewing gum,increased exposure to the ‘metro’ lifestyle, a larger assortment Analgesics/ Liquid toilet 1.15X or Squash cordialsof product supply, and improved access to consumer finance. Cold remedies, soaps, Toilet more & drinks, Biscuits,While the change in consumption patterns in Middle India can Condoms soaps Milk foods, Babybe partially attributed to a rapid surge in consumer demand, foods, Chocolatesthe increasing ubiquity of consumer products is contributingto this growth as well. It is a story of consumer pull meeting Source: Nielsendistribution push.4 Copyright © 2011 The Nielsen Company.
  5. 5. Source: NielsenThese developments augur well for FMCG companies, especially on a variety of products that enhance their standard ofin light of the fact that this market is still in a nascent stage, living. They are accepting categories that never were part ofand is expected to grow substantially in the next five years. their consumption basket. This has opened up a window ofThe rise in demand for consumer products and relatively lower opportunity for FMCG companies to introduce products thatpenetration of FMCG companies in these towns means that were initially brought to market primarily for the metros. Thecompetition is not as fierce in these towns as would be in larger size of the opportunity will multiply in the next few years asmetros. A few major players with adequate capital and wide these new categories will see deeper penetration levels acrossdistribution networks are already cashing in on the opportunity. a larger household base.The annual turnover of the top ten FMCG players from theMiddle India segment rose more than 42 percent by INR 35.8 The consumer pull storyBillion (716 Million USD) in just two years between 2009 and2011. Increased exposure to the media and a gradual improvement in infrastructure have played a substantial role in introducing Strong Value Growth: Just the top 10 FMCG players have the Middle India population to what was earlier only a ‘metro’ added 35.8 Billion from Middle India in 2 years lifestyle, fuelling a desire to improve their standard of living. These factors, combined with an increased spending capacity, are rapidly pushing up the demand for a vast consumer product The top 10 FMCG The same players profile in Middle India. players in these had a turnover of towns clocked INR INR 121 Billion from 86 Billion in value these towns Per Dealer Offtake Growth % sales in 2009 in 2011 +42% MAT May 2010 2011 Delta All India 12.1 13.0 0.9 MAT May Metro 14.5 16.0 1.5Source: Nielsen 1-10 Lac towns 11.7 14.4 2.7Its not just a story of sheer volumes, Middle India is also RoU 9.7 12.8 3.1capturing marketers’ attention due to a shift in demand, adirect consequence of people’s rising aspirations for a better Rural 15.1 11.4 -3.7lifestyle in these regions. Consequently, there is an increase Source: Nielsenin the Middle India consumers’ willingness to spend more5 Copyright © 2011 The Nielsen Company.
  6. 6. “A strong indicator of this trend is the rise in per dealer offtakes– which represents the average sales per dealer over time. Theper dealer offtake in Middle India saw a rise of 2.7 points in2011, compared to an increase of 1.5 points in metropolitan Consumption baskets in thesecities in the same period. This is a growth of more than 14 towns are evolving –percent over the previous year (MAT May 2010). For some categories as varied as breakfastFMCG categories like cheese, packaged rice, diapers, etc., the cereals, air fresheners, and glassincrease in per dealer offtake was quite substantial, at more cleaners which earlier saw little ”than 30 percent! Per dealer offtakes for almost a dozen and a acceptance in these towns arehalf categories in Middle India towns grew at over 20 percent in growing much faster in these townsthe last one year alone. than at the all-India level.The top ten FMCG companies in these Middle India towns sawa spurt in per dealer offtakes, which grew 17% in one year.Source: Nielsen The distribution push story In addition to the surging demand for consumer products in Middle India, marketers are extending their reach in the 1-10 Lac population towns through a constantly expanding distribution network. As a result, new FMCG retail stores have mushroomed in these towns in the past few years. The last three years have also seen a rapid increase in the # of FMCG stores June 2008 May 2011 Overall Number Increase of 250+ 823K 926K of Stores per town Number of Increase 61K 80K Chemists of 31% Number of Increase of Modern Trade 1094 1501 37% Stores Source: Nielsen6 Copyright © 2011 The Nielsen Company.
  7. 7. Source: NielsenThe total number of stores in these towns rose from 823,000 A case worth mentioning: it is interesting to note that Cadburysin June 2008 to 926,000 in May 2011, an average addition ranks #5 in value sales in 1-10 Lac towns versus a #6 rankingof over 250 stores per town. The top ten FMCG players in at an all-India level. In the last 3 years, Cadburys has addedthe 1-10 Lac population towns have aggressively expanded 30% more stores in these towns (the biggest leap of any top-10in these areas, adding 29,892 stores on average in the last player) and the results are showing! In fact, in the last quarteryear alone and 55,767 stores on average in the last two years. of 2010, it actually moves to #4 place in 1-10 Lac towns.More number of stores translates into an increased supplyinfrastructure, which is helping marketers push products to Spotlight: The smaller 1-5 Lacconsumers faster. Not surprisingly, the distribution reach ofas many as 15 categories in the FMCG sector has grown by population townsover 5 All Commodity Value (ACV) distribution points in the3-year period from May 2008 to May 2011. Marketers who had In 1-5 Lac towns, 56 of the 81 categories outgrew therecognized the potential and invested in these regions a few all-India rate in value in 2011 vs. 2010years ago are, today, laughing their way to the bank. 1-5 Lac Towns Value Growth indexed Personal Care / Household to All-India Food OTC CareWhen we evaluated some of the top national FMCG players on (2011 over 2010)their Middle India performance, two things were clear: Tooth Powder, After- Glass cleaners, Utensil cleaners, shave lotions, Lipsticks,1. Not all national players were optimally leveraging Middle 2X or more Toilet cleaners, Chayavanprash Shaving preprations, Other Scourers,India for growth Hair Conditioners Batteries,2. Smaller national players were giving the heavy weights a Coconut Oil, Twinfight in these 1-10 lakh towns Blades, Liquid Toilet Packaged Rice, Coffee, break 1.5X or more Soap, Acne Preprations, Air Freshners, 2010 Baby Oil/Massage, Shoe Polish Fast Cereals, All-India Value 1-10 Lac Town Value Milk Food Rank Antiseptic Cream 1 Hindustan Unilever Limited Hindustan Unilever Limited ToothPaste, Toilet 2 Procter & Gamble Procter & Gamble Soap, Talcum Powder, Skin Creams, Shampoo, Packaged Tea, 3 Nestle India Nestle India Washing Powder, Sanitary Napkins, Ketchups/ Home Insecticides, 4 Parle Products Britannia Inds Ruberfacients, Nail Sauces, 1.2X or more Soap Cakes/Bars Enamel, Hair Oils, Hair Chocolate, 5 Britannia Inds Cadbury India Floor Cleaners, Dyes, Glucose Powder, Beverages, Baby Utensil Cleaners 6 Cadbury India Parle Products Fragrance, Digestive, Food Diaper, Condom, 7 ITC ITC Antiseptic Liquid 8 Colgate-Palmolive Adani Wilmar 9 Dabur Frito Lay India Source: Nielsen 10 Godrej Consumer Products Godrej Consumer ProductsSource: Nielsen Demonstrate better All India performance vs Middle India Demonstrate better Middle India performance vs All India7 Copyright © 2011 The Nielsen Company.
  8. 8. The buoyant Middle India story is not restricted to just thelarger Middle India towns. In the 350+ 1-5 Lac population And consumer confidence is reasonably buoyant…Ontowns, the story is equally compelling. Not only are these the Middle India continuum there are several towns like Anantapur that come close to the consumer buoyancytowns growing at over 20 percent, but 56 of the 81 categories in larger townsare also outperforming the all-India growth rates. 15 categoriesare exploding in these 1-5 Lac population towns with over 40 Stories like that of Anantapur are promising when comparedpercent value growth in 2011 over 2010. Products as varied to Pune, which has been on the development path for many years skin creams, coffee, baby oils, fragrances, and chocolatesare outpacing the all-India growth story. Even these 1-5 Lacpopulation towns do not want to be left behind. 15 categories are growing at over 40%. 127 The Top 8 categories grew in value at an average rate of Pune 70% in 2011 over 2010 and this was 2 times their all-India (Benchmark) Middle India growth rates. 97 114 Personal Anantapur Food Household Liquid Toilet Soaps, Breakfast Cereals, Air fresheners, Bhatinda Hair conditioners, Chocolate, Vermicelli Home Insecticide, Acne Preparations, 79 & Noodles, pre-post wash, Nanded Diapers Fragrance, Packaged Rice Other Scourers After Shave Lotion , Jhansi 99 Twin Blades 96 MAT MaySource: NielsenNielsen also evaluated the consumer confidence of thesesmaller towns. Nielsen’s research indicates that while Of note, the consumer confidence index for Middle Indiathe consumer confidence index in the towns with 1-5 Lac while lower than Pune is much better compared to manypopulation is lower than that of a benchmark mini-metro town developing and developed markets world Pune, many smaller towns are performing much betterthan several developed and developing markets across the Source: Nielsenworld. Anantapur, for instance, has a consumer confidence aggressively and gained a stronghold in the towns with 1-5index of 114, which is fairly close to Pune’s 127, and scores Lac populations - players like Ruchi Soya and Adani Wilmarhigher than many other urban areas. Importantly, consumer are among the top FMCG players in these smaller 1-5 Lacconfidence in Middle India spans a continuum, where towns population towns. It is also evident that while certain biggerlike Anantapur come surprisingly close to the optimism of national players have made these towns their focus, others arethe larger mini metros and towns like Bhatinda complete still to catch on to the Middle India bandwagon. The high valuethe spectrum at the lower end. These numbers indicate that growth in these 1-5 Lac population towns supports the longer-as marketers decide to be part of the gold rush, they have term Middle India story – it is not only the larger of thesethe liberty of cherry picking towns in the first few years. In towns that will sustain this story in the coming decade. Theaddition, a one-size-fits-all approach may not work for all demand revolution has percolated deep into these towns. “these smaller towns. Factors that influence stronger consumerbuoyancy include the level of employment, infrastructuregrowth (including education infrastructure), and proximity to ametro. The buoyant Middle India story is not ”Many FMCG giants have leveraged factors like steady flow of restricted to just the larger Middle India, wide distribution networks and better understanding In the 350+ 1-5 Lac population towns, theof the local markets to establish themselves in these towns.Nielsen found that some companies, which do not rank at story is equally compelling.the top in terms of all-India FMCG presence, have expanded8 Copyright © 2011 The Nielsen Company.
  9. 9. While some FMCG players have been ahead on the Middle 1. Education on a higher pedestalIndia curve, others have opportunity to catch up. Education is paramount in Middle India. The education sector 2010 in Middle India has made considerable progress in the last five All-India Value 1-5 Lac Town Value Rank years, reflecting the population’s belief that higher education is 1 Hindustan Unilever Limited Hindustan Unilever Limited the ticket to a stable career and a better life. 2 Procter & Gamble Nestle India Modern-day parents from smaller towns are more optimistic about their children’s educational opportunities, which was not 3 Nestle India Procter & Gamble the case a decade ago. Parents today, aspire to educate their 4 Parle Products Adani Wilmar 5 Britannia Inds Britannia Inds 6 Cadbury India Parle Products 7 ITC Cadbury India 8 Colgate-Palmolive ITC 9 Dabur Ruchi Soya 10 Godrej Consumer Frito Lay India Products Demonstrate better All India performance vs Middle India Demonstrate better Middle India performance vs All IndiaSource: NielsenAlthough the infrastructure in smaller towns may not be Source: Nielsencomparable with that in other urban areas, Nielsen’s findingsindicate that these towns have made significant strides inramping up basic infrastructure like schools, hospitals and children in English medium schools, as it opens the doors topublic transport. A steady rise in employment rates, income a brighter career. Nielsen’s data shows that the Middle Indiaand spending are expected to have a positive impact on the population’s desire to join the best institutions like IIMs andeconomy of these towns in the next few years. A stronger IITs, at 47 percent, is nearly at par with that of an education-infrastructure would aid marketers in pushing their products centric city like Pune. While post graduation studies in Middleand help achieve economies of scale. However, bugbears like India find favor with only 42 percent of the population—nearlycorruption and weak law and order still persist, and these will half the figure of Pune—an impressive 50 percent of thisneed to improve fast, so that the Middle India sheen stratum aspires to join professional courses like medical andis maintained. engineering versus 57 percent in Pune. While the numbers are not at par with the urban regions across the board yet, theyDecoding the Middle India indicate a growing awareness about the importance of education.consumerWhat is important to the Middle India consumer?The consumption patterns in Middle India mirror the changein the consumer profile. The consumer fabric in these townsis evolving. Marketers will be in a position to maximize theirrewards in Middle India if their offerings are customized tothe changing needs and aspirations of this consumer. Will themiddle India consumer display the traits of a metro consumerin certain situations and those of a rural consumer in otherscenarios? What do we know about what is sacred to thisconsumer group? Some key learnings and trends about theMiddle India consumer are worth highlighting. Source: Nielsen9 Copyright © 2011 The Nielsen Company.
  10. 10. The number of schools, colleges and educational institutionsthat have sprung up in these small towns has kept pace withthe growth in the education sector in India. The rate at whichthese institutions have proliferated has outshone the rate ofgrowth in other infrastructure facilities like roads, security,water supply, etc. For instance, Nielsen’s figures indicatethat Jhansi, a small Mid-India town, has outgrown Pune’sdevelopment in the education sector in terms of consumerperception over the last few years. Moreover, educationopportunities in these towns are not only compelling people tostay back, but also drawing people from even smaller towns.One area where development is still needed is in the highereducation (post-graduate) sector.2. Health & WellnessHealth consciousness is evident in Middle India householdsas a large portion of citizens claims to periodically practicesome form of exercise, like Yoga, walking, swimming or visitinga health club or a gymnasium. Our study shows about 24percent people from Middle India practice Yoga, which is muchhigher compared to the 19 percent who do so in Pune. In linewith this awareness, the consumption of health foods like oats,cornflakes and other low cholesterol products in these areasare at par with Pune at 37 percent. In addition to food choices,Middle India consumers are also opting for annual healthcheck-ups and gathering more information on staying fit.Not surprisingly, many healthy food categories are seeingfaster growth in Middle India relative to the all-India rates.Categories like Chyavanprash, milk foods, and breakfast cereals Source: Nielsenare growing at rates of about 20 percent higher than theall-India numbers. 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. “ ” Affordability, access, and awareness have contributed to the rapid rise ofSource: Nielsen the personal care segment.10 Copyright © 2011 The Nielsen Company.
  11. 11. Middle India Growth Index 2010 Categories Value Growth Over All-India Rank Rate Rate 1 After Shave Lotions 10% 971% 2 Batteries 5% 291% 3 Other Scourers 71% 194% 4 Cleaners - Glass 22% 188% 5 Chyavanprash 28% 184% 6 Soap Cakes/Bars 9% 180% 7 Nail Enamel 23% 168% 8 Coconut Oil Pktyp 15% 163% 9 Shaving Preparations 14% 150% 10 Antiseptic Creams 27% 146% 11 Confectionery - Cough 29% 142% Lozenge 12 All Air Freshners 48% 136% 13 Antiseptic Liquids 37% 136% 14 Acne Preparations 49% 135% Source: Nielsen 15 Packaged Tea 16% 133% 16 Cleaners - Utensil 10% 131% 5. Eating out & experimentation in the kitchen 17 Baby Oils / Massage 26% 130% 18 Glucose Powders 17% 128% Despite making efforts to lead a healthy lifestyle, the lure of fast foods and eating out seems to be getting the better 19 Liquid Toilet Soaps 57% 125% of consumers in smaller towns. Convenience foods like 20 Breakfast Cereals 40% 123% instant noodles, ready-to-cook foods and readymade spices 21 Confectionery - Total Gum 27% 122% adorn kitchen shelves in Middle India. Although a very small 22 Sqsh Crdls & Sft Drn 22% 121% percentage of the population—24 percent compared to Pune’s 23 Biscuits 28% 120% 60 percent—prefers to eat out, the numbers are fast rising 24 Milk Foods 21% 119% since the last two years. Nielsen found that families prefer 25 Shoe Polishes 13% 119% to frequent fast food joints and bakeries, relishing Chinese, South Indian, Punjabi and American cuisine. Moreover, global Personal Grooming categories (MAT May 2011 vs. YAG) fast food giants like McDonalds, Pizza Hut, and Dominos areSource: Nielsen considered an affordable and trendy option for a weekend family dinner outing. Despite a recent squeeze in budgets due4. Home Improvement & Hygiene to high inflation across the board, 80 percent of Middle IndiaThe consumers in Middle India want their house in order and (versus 90 percent of larger cities) is either eating out at similar or higher levels than what they did two years ago. “are beginning to partake in categories that were earlier not abig part of their consumption basket. Household supplies andcleaners are seeing a spurt in growth in Middle India towns ”relative to all-India levels. The increasing household budgetshave allowed for new categories to enter the household. Middle India is keen on expandingHousewives are open to purchasing specialty cleaning products their consumption basket with newerto help them with household chores. This incremental categoriesexpenditure on improving the home is an investment manyMiddle India families are consciously making.11 Copyright © 2011 The Nielsen Company.
  12. 12. Middle India Middle IndiaSource: NielsenSource: Nielsen6. Steady women empowerment It is encouraging to see that a majority of the population in Middle India believe in providing equal opportunities for boysAs more girls are encouraged to pursue higher education, and girls, with 75 percent people in smaller towns like Bhatindawomen empowerment is taking shape slowly but steadily. voting for the idea, compared to 90 percent in Pune.According to Nielsen’s study, while women in Middle India take60 percent of the decisions pertaining to health and beauty Though women empowerment initiatives have been taken, awithin the household, they are no longer confined to just that. lot more needs to be done before the impact of these programsMoreover, women are increasingly playing a decisive role in is truly felt in society. Many women aim for tertiary educationthe lives of their children. Nielsen found that more than 40 and making a contribution to the household income. However,percent of the decisions related to children were taken by certain inhibitions prevent them from achieving their goals.their mothers in Middle India towns. Additionally, women are Nielsen research found that lack of safety, corruption of moralalso beginning to influence the purchase of electronics, with values and an inferiority complex were major roadblocks for31 percent having a primary say and 34 percent sharing the the progress of women in Middle India. Over the next decade,decision-making power with men. the role women play in shaping the Middle India story should only move North given the upside.12 Copyright © 2011 The Nielsen Company.
  13. 13. Source: Nielsen7. Durables on the purchasing horizonThe penetration levels of durables in Middle India versus largercities are vastly different today. Age-old durables like blackand white televisions, table fans and air coolers, which havelost their popularity in metro cities, will still take some time towork their way out of Middle India. Interestingly, Nielsen dataalso highlights that ownership and upgrade of durables are oneof the top priorities for Middle India.Many families aspire to own luxury durables. When the timecomes for an upgrade, goods which are considered necessitieslike pressure cooker, mobile phones, ceiling fans and colortelevisions top the list, whereas for new purchases, luxurydurables like washing machines, refrigerators, vehicles andmusic systems are preferred. Given the current penetrationlevels of many basic durables, the improving financial conditionof families, the aspiration to acquire, and access to consumerfinance, Nielsen expects this market to be ripe over the next5 years. Source: Nielsen13 Copyright © 2011 The Nielsen Company.
  14. 14. 8. Mobile as a multi-faceted deviceThe mobile is a multi-faceted device for Middle India. Thepopulation in these areas is playing games on mobile phones,watching videos, and sending MMS clips at largely the samerate as larger cities. Nielsen research shows that only 6 percentof the total population does not own a phone for personal use.The mobile phone has replaced the landline in many homes.Even housewives carry their own mobile phone – albeit in manycases this is a hand-me-down. Interestingly, today almostthree-fourths of the phones being used in Middle India areNokia phones which will change in the coming two years withmany affordable multimedia phones hitting the market. More than 94% of the population claims to own a mobile phone for personal or office use.Source: Nielsen14 Copyright © 2011 The Nielsen Company.
  15. 15. 9. Cable TV dominanceCable TV is king in Middle India and serves up as the mainsource of entertainment across age groups, providingmarketers with a captive audience like no other.Source: Nielsen10. Social media & internet readinessMiddle India has very low internet penetration—78 percent of On average, Middle India performs 3.2 activities onlineMiddle Indians have never accessed the internet—but those compared to 4.6 activities in a city like Pune. Interestingly,who have access are highly aware of social networking / micro reading news online is an important activity for Middle Indiablogging sites. The Middle India youth is in tune with the even more so than a tech-savvy city like Pune.internet. Social networking, chatting, music, videos, gatheringinformation, and career searches are all in scope with thissegment of Middle India. Orkut prevalence among activeinternet users is higher for Middle India than even Pune! Source: NielsenSource: Nielsen15 Copyright © 2011 The Nielsen Company.
  16. 16. Source: Nielsen11. Selective openness to western influence 12. More to celebrate: prominence of festivalsThe cultural fabric of the Middle India population has The definition of festivals in Middle India has evolved to includeundergone a visible change. With the proliferation of the not just Indian festivals, but also those beyond its geographic‘mall’ culture and the penetration of cable TV, consumers and cultural boundaries. For instance, even in small cities likeare warming up to Western ideas. The youth, especially, are Jhansi, youngsters exchange flowers and greeting cards toadopting trends in Western fashion apparel like jeans and tops, celebrate Valentine’s Day. The claimed festive expenditure haswhich wasn’t the case 5 years ago. However, absorption of this increased considerably for 48 percent of consumers, thoughfashion is limited, with youngsters following their own brand of it remains significantly lower than that of Pune at 81 percent.modernism, which combines Indian and Western values. The This increased expenditure may be largely attributed to theviews of traditional families are found to be liberalizing too, fact that consumers now prefer to purchase gifts and sweetswhich is reflected in Nielsen’s numbers: 28 percent parents from shops instead of preparing them at home.have no qualms about their children staying independently and22 percent are open to consumption of liquor in their homes. What sets Middle India apart is the increasing number of daysIn a larger city like Pune, these numbers are surprisingly low at spent on festive celebrations – while 34 percent of consumers16 percent and 6 percent respectively. In addition to this, the in Middle India state that the time they spend on festivals hasMiddle India population prefers to use English as a medium of increased in the last few years, the number stands at just 17conversation and finds the joint family tradition to be more percent for Pune.and more restrictive.Source: Nielsen16 Copyright © 2011 The Nielsen Company.
  17. 17. Consumer Snapshot Nanded: Contrary to the youth in Bhatinda, the youngsters from Nanded prefer to settle in their hometown, preferablyMiddle India has a distinct personality. In some cases, there is after pursuing education in larger cities. Nielsen researcha stark difference in the values and beliefs of the population shows that internet penetration in the city too is lesser thanin Middle India compared with that in the larger metros, that in Bhatinda. This segment prefers affordable mobileunderstandably so, given the disparity in education standards, phones with basic functions like games, camera, FM radio, etc.surroundings, upbringing, and other societal factors. Adopting Youth from this town frequent Chinese and fast food joints,a one-size-fits-all strategy, hence, may not help marketers and the young males pay special attention to their health byachieve the desired results in Middle India. Knowing the pulse staying fit.of various consumer classes would hold the key to success. Jhansi: Compared to other cities, the youth from Jhansi areWhile some Middle India cities will probably behave more like a not very ambitious. Internet penetration is quite low, andmini metro others might come very close to being a neo-urban youngsters are open to experimenting with cuisines, relishingarea etched with rural consumer thinking. Nielsen identified a Chinese food as often as possible. In gadgets, they preferfew broad themes that could help marketers in decoding the mobile handsets with features like FM radio, torch and games,Middle India consumer. While this is not an all-inclusive profile, which they consider essential. They are less brand conscious,it should help marketers appreciate the difference in consumer and follow a simpler lifestyle compared to their counterparts inneeds and aspirations vis-à-vis some of the larger cities and some of the other Middle India cities.also recognize the need for consumer deep dives before aforay is made into these towns. Some attributes that can be Anantapur: Youngsters from Anantapur are ready toassociated with a Middle India youth, housewife and a working explore other cities for better education and employmentmale professional are highlighted below. opportunities. As a result of relatively high internet penetration, the youth here are tech savvy and like indulgingMiddle India youth in computer games. This may be the reason why they prefer internet access on their mobile phones, besides commonThe Middle India youth are deeply attached to their customs features like camera, games and FM. Due to their exposure toand family. They prefer not to go against the wishes of their a slice of life in Hyderabad, which is located close by, they haveparents, even ready to marry someone who meets their experienced the culture of hanging out at Pizza and Burgerparents’ approval. Despite harboring such traditional values, joints.this segment, surprisingly, likes to be seen wearing thelatest apparels. They not only use homemade remedies to Middle India housewivesenhance their appearance, but also follow the hottest fashiontrends. The focus is on fitness, especially among males, and Insights collected by Nielsen position a Middle India housewifebodybuilding as a form of exercise and fashion is fast catching as a budget conscious homemaker, who influences theon. When it comes to technology, youth from Middle India brands that are included in her monthly grocery shopping.towns gravitate toward modern gadgets. They are well-versed Interestingly, she is the main decision-maker when it comes towith the benefits of the internet and prefer flashing the latest durables and home appliance purchases. Until a few years ago,mobile phones equipped with multimedia. They frequently visit a typical housewife was a conservative cook. However, today,malls, restaurants, food joints, parks, etc. and go sight-seeing she is ready to experiment, and is keen on trying out variouswith friends to nearby local destinations in their free time. convenience food items like readymade spices, instant pasta, processed foods, etc. In addition to these options, her kitchenCity-wise profile of the youth is equipped with modern appliances like food processors, which reduce her cooking time and effort. She also likes to take aBhatinda: Nielsen found that youngsters from Bhatinda are break from mundane kitchen activities from time-to-time andquite ambitious and are open to exploring options outside enjoys Indian soap operas and dining out with her family. Thetheir hometown. They take keen interest in information Middle India housewife is not very technology and internettechnology and use mobile handsets for varied purposes savvy. Being conscious of tight monthly budgets, she preferslike internet browsing, SMS, chatting and multimedia. a simple hand-me-down mobile phone for basic features likeBesides experimenting with new cuisines, this group is highly calling and SMS.influenced by Western culture and is glued to youth channelslike MTV and UTV. In addition to this, Bhatinda’s youth arestylish and very brand conscious.17 Copyright © 2011 The Nielsen Company.
  18. 18. City-wise profile of a housewife too much attention to his style of dressing, the Middle-Indian working man scores low on the fashion quotient. However, aBhatinda: A housewife in Bhatinda would want to settle in a keen interest in healthy living and personal grooming has beenlarger city after having spent many years in her hometown. noticed in his profile lately.She understands the value of education, and is a vocaladvocate of higher academic options like post graduate City-wise profile of a working mandegrees, professional courses and foreign studies. Housewivesin Bhatinda are also fairly religious and regularly visit places Bhatinda: Most men in Bhatinda aspire to buy white goodsof worship. The claimed frequency of these visits is high in like electronic washing machines or automobiles and upgradeBhatinda as compared to other cities like Nanded, Jhansi or their existing color television to a high-end LCD or Plasma TV.Anantapur. Their mobile phone usage is limited to calling, An increasing number of working men are now realizing themessaging, listening to songs, playing games and clicking importance of fitness, and are consequently visiting salons andphotos. gymnasiums to enhance their appearance. In Bhatinda, the services of neighborhood moneylenders are used as frequentlyNanded: Unlike in Bhatinda, the housewives in Nanded prefer as banks by the man of the migrate to their home towns after spending a decade or twoin a metro or a larger city. They feel that the importance of Nanded: Most working men in Nanded believe that there is afestivals has decreased considerably over the past five years. paucity of jobs in their hometown, due to which their financialTypically, their preference in mobile phones is limited to basic stability is impacted. Banks are the only preferred source offeatures like calling, messaging, torch and alarm. credit for this segment. Nielsen also found that many working men in this town aspire to travel by air in the next two years.Jhansi: Our research highlighted the strong belief housewivesin Jhansi have for equal educational opportunities for boys and Jhansi: Nielsen data indicates that a majority of the workinggirls. As their mobile phone usage is limited, they are content male population in Jhansi prefers living in their hometown. Aswith calling, texting, listening to songs and using the torch compared to other Middle India towns, this consumer groupfeature in their devices. has more in-depth knowledge of various investment options. As a result, there has been a steady increase in purchasing andAnantapur: Most housewives in Anantapur have not moved learning more about life insurance policies in the past few yearsout of their hometown, preferring to spend their life within in this town. Unlike Nanded, the men in Jhansi do not restrictits boundaries. They are highly inclined to buy products like their credit source only to banks, and are open to borrowingpressure cookers, televisions, electric irons, ceiling fans, etc. from friends and close relatives. Working men in Jhansi preferAccording to Nielsen research, housewives from Anantapur to go on planned holidays, a tendency which is higher in thisshow the highest frequency of eating out compared to those in town compared to others. The working male population hereother Middle India towns. gives quite a lot of importance to a healthy lifestyle, not eating out very frequently, getting regular health check-ups andWorking men in Middle India practicing Yoga on a daily basis.A typical working man from Middle India is the ‘man of the Anantapur: Working men from Anantapur are indecisive whenhouse’ in the truest sense, as he takes most of the big decisions it comes to settling down in a particular city. For credit, theyin household matters. He is methodical in managing the house, prefer neighborhood moneylenders over banks and otherand most often is involved in daily grocery shopping, albeit financial institutions. The average time this segment spendsaided by a to-do list. Whether it is financial or social issues or online is comparatively higher than that in other cities. Mostlarge purchases like electronics, automobiles or OTC drugs, working men in Anantapur either have a gym membership orMiddle India’s working male wants to partake in the decission practice Yoga regularly, which indicates that they value theirmaking. physical appearance. Due to an improvement in lifestyles and increased awareness, a working man in Anantapur is optimisticAs the main breadwinner, he is keen on securing the family’s about his general well-being, job prospects and the state of hisfuture through a well-planned long term savings plan. Gold, personal finances in the coming and fixed deposits are his preferred investmentvehicles. He aspires to purchase consumer durables like arefrigerator or a vehicle, and provide the best education tohis children with his savings. As someone who does not pay18 Copyright © 2011 The Nielsen Company.
  19. 19. What does Middle India still need Addressing water scarcityto thrive? Paucity of safe drinking water is emerging as a pain-point in Middle Indian towns. Women in these areas need to wakeWhile there is tremendous scope in the Middle India market, up early every morning to collect water for the household’sthere are many areas that can be developed further to requirement. This is a huge problem in towns like Nanded andfacilitate fast-paced growth in this segment. Without such Bhatinda, where people are forced to buy packaged water orimprovement, the Middle India buoyancy will be curbed. water purifiers to meet their drinking water needs.Following are some of the aspects that need attention:Employment opportunities Higher educational facilities While most small towns offer an appreciable level of primaryJob opportunities across Middle India are not adequate yet to and higher secondary schooling, students are forced to migratesustain its growth path. Research from Nielsen shows that only to larger cities for higher education. With a steady increase38 percent of the Middle India youth is willing to stay back in in the number of youngsters pursuing post graduate courses,their hometowns as compared to 62 percent in Pune. Although there is a dire need to increase the number of colleges to caterthe tough job market today has forced students to settle to the demand. With professional degrees gaining prominence,away from their homes and families, they show a willingness more can be done to set up higher education infrastructure andto stay back if the employment scenario improves. Lack of organized coaching classes in these towns.employment has also led to a rise in crimes and even drugabuse in certain towns like Bhatinda. With many companiesand retailers making sizeable investments in these towns, % Claimed source of borrowed fundsit is expected that the virtuous cycle will improve the job 69market overall. That said, huge private and public investmentswill be needed over the next few years to ensure that ample 45employment opportunities exist in the medium-to-long term. 26Job creation will be one of the largest determinants of growth 11 3 4 5 5in Middle India over the next decade. Neighbourhood Banks Cooperatives Friends/relativesWomen empowerment moneylenders Pune Middle India townsAlthough the status of women in Middle India is improving, the Source: Nielsenfairer sex lacks adequate opportunities for employment andeducation. Moreover, certain inhibitions and perceptions are Simplified Bankingimpeding their progress. For instance, parents are apprehensiveabout their daughters’ safety when they step out to work In this age of internet banking, many Middle India denizensor pursue higher education. Teaching is considered a safe still rely on local moneylenders for their credit requirements.profession as it does not entail late working hours or traveling. Almost 26 percent of the population still borrows fromSimilarly, many believe that if a girl is well-qualified, it may be neighborhood moneylenders, whereas in a developed citydifficult to find a suitable groom for her. This, coupled with the like Pune, this number is a miniscule 3 percent. Such highage-old custom of dowry, is a major issue in Middle India towns dependence on moneylenders may be due to the population’slike Jhansi. Interestingly, the amount of dowry expected tends difficulty in transacting with the advanced banking increase if the girl is highly educated, especially in smaller This is apparent when only 45 percent of the Middle India “towns like Nanded. While women empowerment is happening population approaches banks to avail loans as compared toin small doses, a lot needs to be done quickly if women are to 69 percent in Pune. Reserve Bank of India data over the past 3play an equal role in the growth of Middle India. 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 ” Job creation will be one of there is a lot of opportunity to improve penetration of basic the largest determinants banking. Considering the propensity of consumers in these towns to save & invest in gold, property and fixed deposits, of growth in Middle India there is a huge opportunity for banks and other financial over the next decade. institutions to promote their products. However, to exploit this market, financial processes need be simplified to a large extent.19 Copyright © 2011 The Nielsen Company.
  20. 20. Number of Deposit accounts in thousands (scheduledcommercial banks) Implications for Marketers 1981 2009 Multiple Market Sizing Rural 34,862 199,695 5.73 The FMCG market in Middle India is expected to grow manifold Semi Urban 43,690 169,725 3.88 in the next decade and a half. This predicted growth for the Urban 33,878 142,272 4.20 coming 15 years will be unprecedented, and will have huge Metropolitan 31,197 150,611 4.83 implications for consumer product companies. Source : Reserve Bank of IndiaImprovement in roads andinfrastructureThe state of infrastructure in Middle India towns leaves alot to be desired. From narrow roads to perennial work-in-progress, commuters face a harrowing time, and prefer to usepublic transportation for daily travel. In the last 3-4 decades,transport infrastructure has focused largely on metro and ruralconnectivity; these urban towns will need some attentionin the coming decade. Connectivity will play a huge role in Source: Nielsenspeeding up progress for Middle India and the government The Middle India market size of the FMCG sector, which isneeds to do more to set up this missing link. currently about INR 287 Billion (6 Billion USD), is expected to cross the INR 1 trillion (20+ Billion USD) mark by 2018 and INR As a % of 4 trillion (80+ Billion USD) by 2026. This signifies a remarkable Length of Roads (Kms) total roads opportunity for the next decade and a half. Roads in Kilometers 1971 2008 1971 2008 Highways 711,966 2,473,267 78% 60% Rural Roads under - 1,061,809 - 26% JRY and PMGSY Urban Roads 72,120 304,327 8% 7% Project Roads 130,893 270,189 14% 7% Total Roads (In Kms) 914,979 4,109,592 100% 100% Source : Government of India (Ministry of Road Transport & Highways)Entertainment options Source: NielsenWhen it comes to entertainment, there is a dearth of options. The population in this region boasts of per capita FMCGFamilies and students are usually hooked on to cable television consumption of over INR 2,800 (56+ USD) more than 2.3or frequent shopping malls, restaurants and parks in their times the figure for all-India. This number is estimated tovicinity for leisure. A moviegoing culture is yet to catch on reach INR 31,000 (620+ USD) by 2026, which will be moreamong this section, as most cinema halls are considered than double of what an average Indian will consume then.inappropriate for women and families. Middle India wants to be These numbers should be music to the ears of marketers andentertained, and this industry has a lot of potential for growth retailers who are planning to expand aggressively in the comingin the coming decade. few decades. It is about time marketers started calibrating strategies to fulfill the needs of this segment.20 Copyright © 2011 The Nielsen Company.
  21. 21. “Implications for business Marketers will need to cultivateRamp-up in the FMCG segment their brands with MiddleThe rise of Middle India is expected to drive spending to India and build loyalty nowunprecedented levels. Since there is a vast scope and relatively while habits are changing, so ”less competition in this market today, existing players have that they can flourish whenregistered impressive growth in the last few years. FMCG spending increases manifold incompanies which anticipated this kind of growth and invested the coming these areas a few years ago, are reaping rich dividends today.The good news is that marketers who will act quickly even now,will be able to grab a sizeable portion of the market. Smaller packs and customization of small-sized packages, homes, cars, etc. would address the specific requirements ofMarketers planning to penetrate the Middle India market in smaller families.the coming years would do well to target the smaller townswith 1-5 Lac population, as these regions would record Media evolutionunprecedented growth in the coming few years and are lesslikely to have competition already well entrenched. The While there has been some improvement in infrastructurefocus needs to be on building distribution infrastructure over in 1-10 Lac population towns, the penetration of internet isthe next 12-24 months. Current trends indicate that selling still negligible. Most consumers rely on cable TV for theirproducts in smaller packs through local business partners information and entertainment requirements. This mediumwill drive sales for FMCG companies. Consumers are also caters to a vast group of consumers—from youngsters,increasingly indulging in impulse buying, signaling a strong children, working men to housewives—and is expected togrowth for products in this category. Consumers base their maintain its stronghold for the coming few years. Cable TV candecisions on affordability and convenience while making their hence become an ideal medium for marketers to promote theirchoices. Marketers will need to cultivate their brands with products among all age groups.Middle India and build loyalty now while habits are changing, A very small percentage of the Middle India population, whichso that they can flourish when spending increases manifold in mainly consists of youth in select areas, has access to thethe coming decade. internet. This gap in the market can be tapped by internet service providers. Those who do have internet access arePersonal grooming and hygiene in focus engaged in social media activities like their counterparts inThe per capita expenditure on personal grooming and hygiene bigger cities. Companies that offer youth-centric products canproducts is steadily increasing in the 1-10 Lac population hence leverage social media marketing (along with a releventtowns. Today, this segment prefers to find homemade TV campaign) to popularize their offerings, especially gadgets,solutions for their grooming requirements. However, over time, personal care products, and cell phones.requirements are expected to evolve and schedules to getbusier, which would lead to a higher demand for personal care Cuisines & Convenienceservices like beauty salons, and boost the market for beauty Fast food restaurants that are convenient, affordable andand hygiene products. With an improvement in consumer provide quick service find favor with not only the Middle Indialifestyle, an increased acceptance for newer products like youth, but families too. Chains like Pizza Hut, McDonalds,affordable hair creams, deodorants, and shaving products and Dominos that provide an affordable menu and a Westernis expected. ambience are considered strong contenders for a weekend family dinner outing. The lack of evolved options and limitedShift in family consumption patterns experimentation serves up Burgers, Pizzas, and AmericanThere has been a gradual rise in the number of nuclear families cuisine as the next-in-line favorite to traditional Indian andin Middle India in the past few years, and this trend is expected Chinese fare. In the kitchen, the demand for fast-fix items isto accelerate in the next decade. For marketers, this would on the rise. With increasing dependence on time-saving foodentail redrafting their marketing strategies and product mixes, ready-to-cook foods, ready-made spices and prep kits,offerings, as a change in the size of the family is likely to bring this is an ideal time for food brands to address this need andabout significant transformation in consumption patterns. expand in these towns.Moreover, communication and promotional strategies need tobe targeted at a typical nuclear family in Middle India.21 Copyright © 2011 The Nielsen Company.
  22. 22. Celebrations they purchase, including food items. In addition to this, women are increasingly participating in big ticket householdThe Middle India population celebrates festivals with great purchases like consumer durables and electronics. White goodsenthusiasm, which is reflected in their readiness to spend more companies should take note of these trends to design in-storetime and money on them. Nielsen data highlights that this consumer experiences and form promotional strategies to grabsegment is heavily influenced by Western culture, especially the attention of decision makers for their products.when it comes to celebrating festivals, and is slowly shiftingfrom traditional gifts to celebration packs and ready-made gift When it comes to opportunities for women, Middle India isoptions. Besides, there is a rising importance of celebrations making slow but steady progress. However, longstandinglike Valentine’s Day, Mother’s Day, Teacher’s Day, etc. in problems like inadequate security and dowry still persist.the 1-10 Lac population towns. Considering that the trend Companies setting up shop in these regions that want to playis expected to attract even more consumers in the coming a role in ensure women participation in the work force need toyears, companies dealing in festive offerings like flowers, gifts, ensure the safety of their female staff through facilities such asgreeting cards, chocolates, etc. can expect a strong growth in pick up and drop, flexible work timings, etc.revenues. FMCG companies can leverage this trend by focusingon seasonal, festive, and gift packs. Mobile telephony Mobile phones have a stronghold in Middle India. More thanMobility 94 percent of the population claims to own a phone forMore than one half of the Middle India households own a personal or office use. Factors like affordability of handsetsbicycle, about one-third own a 2, 3 or 4 wheeler and much and cheap call rates are driving the growth of mobiles phonesless than one in twenty households own a car. With income in these regions. Consumers, especially youth, are morelevels in 1-10 Lac population towns on the rise and a steady open to experimenting with handsets, and are excited aboutincrease in both the vehicle options and financing, consumers newer technologies. If service providers offer better mobilewill gradually upgrade their vehicles from bicycles to two internet services in small towns at affordable rates, it is likelywheelers and from two wheelers to automobiles. Considering that a wave of consumers will skip the computer-led internetthe size of population in the region, such upgrades will open access phase and unlock the power of the web through mobileup a huge market for automobile companies. Companies devices. However, this is possible only if telecom companiesdealing in infrastructure development will see a growth too, make internet usage appealing, affordable, and relevant to theas the Government will strive to provide better transportation Middle India population.facilities to match Middle India aspirations. Opportunities for other industriesEntertainment & Leisure Apart from scope for the sectors mentioned above, there is aConsumers will also look to spend more on leisure activities huge gap in the Middle India region for the banking incomes rise. Today not many options are at their While many national and international banks operate in thisdisposal. Selective investments in customized and affordable space, local moneylenders are still very prevalent. Offeringentertainment options can yield big dividends in the next few simplified products and solutions can help banks make theiryears for companies dealing in entertainment and hospitality. operations viable.Movie theaters that are a step above the single-screen theaterscurrently prevalent in most of these towns can encourage With an improvement in lifestyle and rise in consumerfamily movie outings and unlock a huge opportunity for the awareness, a wave of health consciousness is sweeping acrossentertainment segment. Middle India. Consumers are now willing to spend more on fitness activities in gymnasiums and yoga centers, which bodesWomen power in Middle India well for fitness service providers, health-food players, and lifestyle product companies.While women are not the sole decision-makers in thehousehold, their contribution to the decision making process In addition to this, education is gaining importance in thesewill evolve over the next few years. Nielsen research found that towns. This could mean rapid growth for private schools,men and women have an equal say in many of the products colleges, & organized coaching classes in the coming few years.22 Copyright © 2011 The Nielsen Company.