Opportunity India

India, a sprawling subcontinent of 3.29 million square kilometers with a population of 900 million, is embarking on the most profound change in its economic policy since it won its independence from Britain, 48 years ago.

India has about 230 million people living almost below the poverty line and is still a very rural, agrarian society. But marketeers are rejoicing at the emergence of a creamy layer of ‘super-haves’ with an annual income of over Rs.900,000 or U.S. $30,000 per annum. This, in purchasing power terms, translates to U.S. $180,000. These consumers travel widely in India and abroad, are very conversant with English and look for world class products and services. Just below them lies the huge middle class, a population of almost 180 million people. These consumers are now emerging as a major target segment for consumer durables, branded consumer products, services, financial products, etc.

In these two major segments lies ‘Opportunity India’!

What will this Opportunity India translate itself into? Let’s look at market sizes for a few product classes for the year 2000: colour televisions 4 million units; refrigerators 4 million units; two wheelers 3.3 million units; personal computers 1.4 million units; audio equipment 10 million units; wristwatches 70 million units; washing machines 1.7 million units…

India, in terms of per capita income, ranks well below most other countries in the world. But when India’s GDP is taken at ‘purchasing parity’ rates, India ranks a respectable No.6! Given this and given the fact that a large part of this income is in the hands of the creamy layer and the burgeoning middle class, India truly spells ‘Opportunity’ to forward thinking MNCs.

A number of MNCs have been scared of looking at India in the past because of its vastness; population of 900 million, over 5000 towns, over 500,000 villages, 14 languages, 256 dialects, over 5000 publications, etc. But now with the emergence of the middle class who can be reached in about 100 to 200 towns through one medium, TV, the task has become a lot more comprehendible.

The beginning of this unification happened in 1985, when the country got its National Network Television. By advertising on the network, one could reach over 30 million households who were glued on to the popular film based programmes. The ‘90s has seen this trend taking a new turn. The satellite TV has hit India. Today in a city like Bombay, the upper classes have access to over 30 channels, provided by the local cable operator for monthly fee of just U.S. $ 3. In the smaller cities, the number of channels are fewer (up to 10) but the trend is catching on.

The TV explosion has enabled astute marketers to focus advertising messages more sharply than before. The ‘channel is the message’ for many product categories.

The multiple language problem of India still continues. But the emergence of network television has increased the understanding of Hindi, India’s national language, across the country. Gone are the days when film prints were made in 14 different languages for exhibition in India’s 20000 plus cinema halls.

English is the medium of choice for the creamy layer but Hindi is the dominant medium for the middle classes. Further press advertising for most white goods is needed in 10 languages or more. Fortunately, India has a strong ‘language culture’ in advertising agencies, hence most major campaigns are created in multiple languages simultaneously. When needed, services of specialist language writers are used to cross the language divide.

India has the world’s largest film industry and has a huge bank of film talent. India also has a large base of journalistic talent, given the democratic, free-press orientation of the country. Mass media too is today undergoing a rapid transformation with more TV software production, specialised niche magazines and FM radio.

India has a large and growing advertising industry. Total media expenditure is expected to cross US $ 5000 million by the year 2000. The Advertising Agencies Association of India, the equivalent of 4As, is a vibrant and active trade association with over 120 active members. AAAI is celebrating its 50th anniversary this year and plans to become an even more powerful body for the Ad Industry.

Indian ad agencies have a vast pool of high-class talent, recruited from management institutes, art schools, etc. Indian ad professionals are today being headhunted for lucrative jobs in the Far East and Middle East countries. Today, Indian TV and Press advertising can be called world class and with the liberalisation of the economy, Indian Ad professionals are getting increasingly exposed to world class advertising. The integration of Indian Ad agencies into worldwide networks is happening quite rapidly, since India has had a fairly well developed ad industry in spite of being a controlled economy.

Indian Ad agencies and their worldwide affiliates are looking forward to playing a more active role in making India a truly consumer driven market.

India is in for some exciting times ahead. The marketeers can look forward to a growing market. The Indian consumers can look forward to a choice of world class goods and services.

India with its strong democratic polity, a large financial market, a growing presence of reputed multinational companies, an established set of professional ad agencies and a strong distribution infrastructure today spells ‘Opportunity’ to astute marketing men.

Table 1 - Vital Statistics: India

Table II - India in Class Terms

Table III - Indian Ad Scene

Table IV - Top Ad Spenders (1993-94)

Table V - Top Ad Agencies

(Based on an article that appeared in Media International in 1996, June)

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