Loyalty levels low in India

08 November 2011

NEW DELHI: Only one fifth of Indian consumers are highly loyal to their favourite brands, presenting opportunities and obstacles to marketers, new figures show.

Colloquy, the research firm, polled 500 Indian adults, and found 56% trusted overseas brands more than local alternatives, while the remaining 44% assumed the opposite perspective.

However, a modest 20% of the panel were "extremely" faithful to their favourite brands, although 83% could be tempted to sign up to loyalty schemes.

A further 56% of the sample thought "most businesses can be trusted," and a quarter of participants strongly agreed competition from foreign companies was a positive thing.

When describing their attitudes towards shopping, 25% of the survey community "expected special service", 19% would "pay a luxury premium", and 17% saw themselves as "early adopters", all reaching a peak among 26-34 year olds.

More broadly, 34% held an overwhelmingly favourable view regarding their economic prospects over the next decade, hitting 55% for the most affluent respondents and 51% for 26-34 year olds.

The study therefore claimed that local companies might benefit from exploiting the "wave" of patriotism and optimism observable in India, and stress "their existing tie to the country and its people."

Currently, 42% of Indians were members of rewards programmes, belonging to an average of 2.8 schemes each. This figure rose to 3.7 for upper-middle class consumers, versus 1.8 for those on lower-middle incomes, the research stated.

Elsewhere, 26% of interviewees planned to join loyalty programmes, and 57% were considering doing so, measured against just 17% not interested in engaging with companies and brands in this way.

The reasons mentioned for not participating included privacy concerns, cited by 28% of relevant people questioned, matching the total registered by shoppers failing to spend enough to be eligible.

Another 19% of consumers suggested that insufficient incentives and a lack of available schemes were to blame here, rising to a third of the wealthiest audience featured in the analysis.

The most attractive advantages offered by loyalty schemes were cited as being recognised as a valuable customer on 31%, receiving rewards that are "practical for day-to-day life" on 26%, and luxurious or prestigious perks, on 21%.

Data sourced from Colloquy; additional content by Warc staff