The Emergence of the Abundant Economy.

In continuation to the previous post on the current scenario, the era of abundant choice. . .

As students of school-level economics will testify, we have always accepted as a given that the “resources are scarce and needs are unlimited.” We are, today, witnessing the emergence of abundance.

A survey testifies to this: “the fast changing consumerism in India over the last two decades has made life ever more puzzling for marketers, analysts and policy makers who have been trying to understand the changing dynamics of the Indian marketplace. Gone are the days when Indian consumers could have been neatly slotted into different categories, since consumers and consumerism have turned into a more complex proposition looking for more value and satisfaction for their money.” (How India Earns, Spends and Saves.)

The survey report goes on to state: “The wheel of fortune continues to spin in India, with each level of household income set to move a notch higher by the end of the decade. The maximum impact of the growth has been estimated to be on the middle-income households.”

A McKinsey report in 2007 was more bullish in their projections: “Our analysis shows that if India continues on its current growth path, over the next two decades the Indian market will almost triple and India will climb from its position as the 12th largest consumer market to become the world’s fifth-largest consumer market by 2025.” (The ‘Bird of Gold’: The Rise of India’s Consumer Market published after a year-long research project.)

Quite frankly, I don’t really understand country-level statistics. For me, these statistics are a mere confirmation of the entrepreneurial energy I have seen in the many business shows that we, at Franchise India, have organised across the country. Last year, we did some 50-plus shows. These were not just in the metros, but also in the tier II and III cities and towns.

My marketing communication colleagues say that we bind India from Jammu to Cochin, (North-South) and from Pathankot to Dibrugarh, (East-West). These are shows where individual investors, early entrepreneurs and established enterprises come together to buy and sell business opportunities in franchise and retail. We have been doing this for 14 years now and each year we are not only revisiting old destinations, but are going to new ones. The show at each repeat destination has been bigger than the previous one.

I am not saying this in a self-congratulatory mode. We have done nothing except tapping into an overflow of entrepreneurial spirit that is welling up within the belly of our nation. Entrepreneurs are just waiting for opportunities. I am an optimist in that I know that the change for the better has happened and will happen faster. The change rests on the shoulders of the new entrepreneurs I daily meet; who keep coming forward to take on more challenges and build new businesses. It is this community of entrepreneurs that will build enterprise solutions to all the pain points we continue to face today, in India and across the globe.

We shall continue with more on the abundance economy, its problems and the ways to tackle those in our forthcoming articles. Write in to us for your feedback and opinions.

The Era of Abundant Choice.

It Takes Two To Tango, an Entrepreneur India publication, written by serial entrepreneur Gaurav Marya talks on building vibrant relationships in the complex market of today by understanding what he actually needs. The following excerpt is reproduced from the same book.

The consumers of luxury items always had choice. We have all heard stories of how the rulers of princely states would import the best and finest from Europe. To a significant degree the luxury brands have entered the Indian market, but choice has emerged in dramatic abundance at the mid-level and to a much lesser degree at the base level also.

Let us look at cars.

In the distant past (till the 1980s), there was only a choice of two automobiles to be had – the Ambassador and the Fiat. If we look at the automobile market today, we can only marvel at the range of choices available to the consumer. Take for instance Maruti Suzuki. They have 17 base models and an average of above five variations on each of them. The low-end model, Maruti 800 has two variants – AC and non-AC, and the top-end model, the Grand Vitara also has two variants – manual and automatic transmission.

What this translates into is that the customers, especially in mid-range vehicles’ category, have at least four options to choose from at the same price! Let us focus on the price range of three-lakh-plus and four-lakh-plus. Maruti offers eight base models and 44 variants. Let us look across all brands to see the full range of options available in the market today. We have 14 automobile brands offering 26 base models in this price range, with some of them offering only one variant and some 19, making a total of 99 variants. When we put everything together, it is a staggering 144 variants within the three-lakh and four-lakh-plus price range! More is to come as high-end car brands are looking to follow Honda and launch offerings in the mid-range segment.

As we said before, the automobile industry is a startling example, but signs of the emerging abundant economy are to be seen all over. There was a time when restaurants had an AC section and a non-AC section. Today, AC has become more like a default. The malls, which are open to all, provide an air-conditioned public space without any commitment to spend. The Delhi Metro is air-conditioned too. The Delhi Transport Corporation runs a fleet of buses that are air-conditioned. Many cities have air-conditioned taxis and bus services being extended to a broader demographic. What used to be a premium feature has today become standard and default in the base model.

There was a time when the global Indian would create aspirations for global brands amongst their network on social media. Today, global brands have come to India, and compete at the same price range, as their counterpart Indian brands. The retail revolution has also had its impact. The customer in India is restless. Bombarded with marketing communication of all kinds, they shop around, experiment, look out for novelty, and are hungry for world-class production at their price point. They may even buy things they don’t need, but if does not serve a sustainable purpose they will stop. The writing on the wall is clear: “Customer loyalty is Dead.”

We shall continue with more on the abundance economy, its problems and the ways to tackle those in our forthcoming articles. Write in to us for your feedback and opinions.