Problems Exist and They Have to be Tacked - III

In the last post we discussed how the customer dominates in the markets where many sellers exist. Now we’ll discuss if the country like ours is ready to handle customer domination.

Is India ready to handle customer domination?

Indian companies are inordinately focused on sales. We look at year-to-year performance and become happy with our growth. Alarm bells start to ring only when there is a dip in sales and market share, but, by that time it is often too late.

I am worried because I see longer lines being drawn next to some of my favourite brands. Many Indian brands are losing relevance. I was a Titan wrist-watch owner. I have switched. Most of my colleagues in office no longer wear Titan watches. I see Fastrack, Tommy Hilfiger, Giordano, Polo – these are fashion brands licensed to watch manufacturers! The first two brands are available at Titan stores, and the Titan brand is still the leading brand in India; but is the wheel turning?

It is not a simple question of a generation shift. Ford, Dell, HP and Apple are all multi-generation brands that have survived and flourished. It is not a simple Indian mentality issue, either. It impacts international brands in India. For decades, the leading luxury car brand in our country was Mercedes. Every rich household had one. Today, Mercedes trails behind Audi, the leader and BMW. It has lost market share too.

Niren Chaudhary, Managing Director, Yum Restaurants, India, made a presentation at one of our conferences where he also happened to be the chairperson. In the presentation, a slide showed a list of multiple restaurant-chain brands that were active in 2005. They were a mixture of international brands and a few Indian ones. The following slide depicted the brands that had achieved 200 outlets by 2012 – seven from a field of 24; and only one Indian brand – Cafe Coffee Day.

In India, the shift has happened to an economy of abundance, where the customer is calling the shots. With more and more global brands wanting to enter this consumption market of 1.2 billion people, the “shifts” will happen faster and faster, with tectonic impact, ringing high on the Richter scale.

Are we ready for it?

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