Amid India’s rapid economic growth, retail marketers must carefully segment the country’s very diverse cities and have a locally-oriented operating model in order to maximise their brand’s impact, an industry figure maintains.

Marketers need to do their homework carefully before deciding to launch retail stores in India, according to Peeyush Bajpai, director of big data for Nielsen India.

Speaking at the recent India Retail Forum held in Mumbai, he cited a World Bank study indicating that that by the year 2030 each of the top five cities in India will be equivalent to a country.

Already, in fact, Mumbai’s economy alone is predicted to be bigger than Malaysia’s this year. (For more on retail strategy and segmentation in India, click here: India’s retail challenge: Cities within cities.)

But marketers need to look beyond the sheer scale of individual cities. “The challenge obviously is that these are not single cities but many cities within cities,” said Bajpai. “For example, if we look at various areas or localities within Mumbai, we discover that each one is comparable to another small town in India.”

India’s retail market is highly nuanced, with marketers facing challenges including the exact location of stores, as well as relevant content. Bajpai added that extreme diversity within each city is also a factor because rich and poor often live cheek by jowl in major conurbations. In Mumbai, both socio-economic classes live right next to each other.

So marketers should view each Indian city as a composition of many micro-markets in order to succeed. “You have to study these micro-markets and the consumers there that are relevant to you, and thereby find your own markets and your catchment areas,” Bajpai explained. “These are pertinent issues you need to address using scientific data before you decide to open a store.”

Media consumption habits are another factor to consider: “Are they more oriented towards local language television channels or more oriented towards English television channels? This helps retailers understand the ethnicity of the particular area.

“In this way you can overlay multiple layers of data and be able to identify whether that particular area is your right catchment area,” Bajpai said.

Sourced from WARC