India Vs Bharat - Life beyond Metros

Yesterday, I attended  full day workshop on 101 emerging markets in India. This workshop was organised by  Bangli channel Zee Bangla, whose major operational area is also in the emerging market.

Till very recently Bharat (India beyond Metros) was treated as poor cousin of India.  Focus of marketeer   and advertisers  was on Metro cities. But no more as Bharat has outsmarted India in terms of consumption.

Another big issue was English, the language of ‘Class’. Interestingly, the growth of English language is 25 per cent in non-metros versus 17 per cent in the metros on a smaller base, and 1.3 crore English speaking people have been added in the last five years in the non-metros.

The potential of  Bharat (the markets beyond the metros) is no longer just a potential but rather a fact. There is evident change taking place in the consumption and behavioural habits of any given consumer and is based on three major aspects - lifestyle and socio-economic facts, affluence and media.

Lynn de Souza, chief executive officer, Lintas Media Group delivered key note address. In her opinion,  there are 70 million adults in the metros and 220 million adults in Bharat. "Therefore, the size of the adult demographic of Bharat is three times that of the metros," she said.

Now, 32 per cent of real India can read English and the number is growing faster than the metros. This is clearly a sign of prosperity, especially in the internet and the digital generation.

"So while it is believed that it is the regional language that is at the heart of India, this is telling that even commercial language in India is showing huge growth," she averred. She noted that while 30 million people in the metros speak and read English, its 70 million people in real India who know and speak the language.

The growth of this language is 25 per cent in non-metros versus 17 per cent in the metros on a smaller base and 1.3 crore English speaking people have been added in the last five years in the non-metros.

Another indicator is the retail sector, which showcases the change and growth in lifestyle of the non-metro markets. According to de Souza, consumers in the non-metro markets or from real India visit super markets three times a week and spend Rs 200-300 per visit.

Citing the examples of various super markets and hyper markets, de Souza noted that Trent has 15 hypermarkets including small towns such as Aurangabad, Surat and Kolhapur, Bharti Walmart has a presence in Tier III towns like Ludhiana, Guntur, Meerut, Agra and Amravati, while Spencers is present in 35 cities and Big Bazaar is present in more than 70 cities and towns.

"This is an indicator of just one year of growth. In fact, according to a study done by Nielsen (the retail store audit), the growth of FMCG products in real India is 19 per cent versus 11 per cent in the metros. And this is just Q4 over Q1 in 2011," she said.

Talking about the influence of media, de Souza noted that as advertising clutter grows, a major pie of the money spent is being targeted at the non-metro regions. For example, in the last five years, print's investments in real India have doubled when compared to the metros in the last five years. For TV, it has been 228 times more than the metros while for radio, it has been 154 times more.

According to 2011 Connections, a proprietary research conducted by the Lintas Media Group, the reach of media is almost the same in Tier II (which is the real India component) and the metro.

As far as digital is concerned, while a metro consumer spends 93 minutes on the internet (www), 90 minutes on mobile internet and 91 minutes on social networking, for the Tier II market, the numbers stand at 77 minutes, 78 minutes and 82 minutes, respectively. "This indicates that there is a significant time spent on the digital media in the non-metro markets as well," said de Souza. However, internet is used more for knowledge search and to improve lifestyle and personality for Tier II than being connected with others.

 She observed that Hindi GEC channels are also shifting their focus to real India. Therefore, shows like Afsar Bitiya (Zee) is set in Darbhanga, Punar Vivaah, Mrs Kaushik Ke Paanch Bahuein (Zee) and Kairi (Colors) are set in Gwalior, Naa Bole Tum Na Maine Kuch Kaha (Colors) is set in Indore, Phir Subah Hogi is set in Bundelkhand and Kuch To Log Kahenge (Sony), Shubh Vivaah and Ruk Jana Nahin (Star Plus) are set in Lucknow.

"Average weekly gross impressions of Hindi prime GECs has gone up by 136 per cent in real India, as compared to107 per cent in metros since 2009," she said

Mitrajit Bhattacharya of the Chitralekha Group spoke about why India is driven by Tier II and Tier III towns as much as it is by the metros.

He presented a case study on whether market strategies for metros, as opposed to non-metros, ought to differ, the need to forge an emotional connect with the consumers, and more.

He went straight for the kill as he began with the question, "Do marketers need to strategise differently for non-metros?" before going on to answer it with, "No."

"Marketing strategy is simple; just go where your consumers are. But yes, tactically, you do need to strategise differently for different markets," Bhattacharya quickly added.

He then went on to point out how India is a complex market given its diverse cultures, multi-lingual nature and plethora of co-existing castes, creeds, religions and dialects. "India is like the European Union," he said, "Peel the onion and you will find that after Mumbai and Delhi - hubs for luxury brands are states like Gujarat and Punjab in the equation."

Thus, Bhattacharya reached the conclusion that India is indeed driven by Tier II and Tier III towns as much as it is by the metros. He reminded the audience that a few years back, this very phenomenon was termed 'The Dhoni Effect'.

He then went on to explain that while MHI (monthly or median household income) defines the purchase of better luxury items, SEC (socio-economic class) defines lifestyle. "A diamond trader from Surat or a farmer from Ludhiana wears branded clothes, drives high-end cars like the Audi, and they are the ones that comprise real emerging India," he stated.

These consumers are in all probability educated in their respective mother tongues. Further, according to Bhattacharya, there are some key characteristics that define the nature of these consumers. These traits include a high level of confidence -- "often to the point of being cocky," in Bhattacharya's words - and harbour very high aspiration levels.

"They have a 'Hum toh aise hi hai' attitude," he admitted, nonetheless adding that it is best if marketers talk to them in a language they understand, through a medium they trust.

Citing the example of his own brand, Gujarati magazine Chitralekha, Bhattacharya explained the importance of building an emotional connect with these consumers. "We are loyal to our loyalists," he stated. In a move to address the problem of language in metros (as many youngsters these days don't know Gujarati), the company aggressively circulates its English lifestyle add-on magazine called 'BTW' ('By The Way') in cities such as Mumbai, Ahmedabad and Pune.

It is not about English versus regional languages; rather, it is about good media products versus bad media products," he concluded.

Regionally strong brands have for long been confined to their area of dominance. However, the era of liberalisation has seen many a regional brand undergoing a transformation of sorts to become a national and even international brand.

Ujala (Char Boondon Wala), Bagh Bakri Chai are such Brands. Parag Desai, executive director, sales and marketing, WaghBakri Tea Group charted out the journey of the brand in becoming a strong national player.

Desai started out with statistics that threw light on the tea industry and markets in India. India's total tea production is close to 960 million kilogram, out of which 600 million kilogram is sold as loose or unbranded tea. About 360 million kilogram is sold in branded or packaged tea form. The branded tea market is close to Rs 10,000 crore annually. The major players in the India tea market include HUL with a market share of 22.5 per cent; followed by the Tata Group with a market share of 20.2 per cent. The WaghBakri brand comes third with a market share of 7.2 per cent. The rest of the market is fragmented between 2,500 smaller brands.

The WaghBakri group was started in 1892 and is currently worth Rs 500 crore, with a production capacity of 8 lakh packets per day and presence across 32 countries.

Talking about the turnover story of the WaghBakri Group, Desai says that the core strategy was to establish a strong regional presence. "Becoming a strong regional player automatically put a brand in the national league," he added.

He said that coming up with category-specific variants of the flagship brands helped the company attain national brand status. "The Tier II and Tier III cities gave our company quick success as it was able to cater to specific requirements and demands of every category of consumer. Also, innovations through customer insights formed a major part of the strategy to make the brand a national one," he revealed.

Outlining the winning formula of the brand, Desai said that WaghBakri made sure not to compromise on the quality, irrespective of the brand or the category it was catering to. "We devised region specific blends after extensive research that ensured that we had something to offer for different regions. And most importantly, a strong distribution network and offering consumer delights during festive seasons cemented WaghBakri's position as a national brand."

The brand also extensively involved itself in local events with an aim to become a part of the local cuisine and culture. It extensively advertised through regional advertising to transform into a national brand. The company has also extended the tea consumption habits of the India population to launch a novel concept called Tea Lounges. At these lounges, 45 varieties of tea are available in a 5-star setting. WaghBakri also celebrates Indian-ness through Indian snacks and accompaniments. According to Desai, this concept played a major role in strengthening the WaghBakri brand equity.

One day is  not sufficient for such an important issue and there is a need to continue the dialogue as the growth story of Bharat has just started. Hope that many more marketeers will join it and make it a regular forum