India has long been touted as one of the major growth areas and opportunities for brands across the globe. Professor Amitava Chattopadhyay, the GlaxoSmithKline Chaired Professor of Corporate Innovation at INSEAD and Fellow of the Institute on Asian Consumer Insight, recently hosted a fascinating Warc Webinar on this topic.
Before watching the recording of "Insights into Market Entry Strategies into India", here's my overview of Professor Chattopadhyay's key points.
A "smorgasbord of humanity"
With 4,635 identifiable communities (according to the Anthropological Survey of India), brands are having to navigate markets within markets or, as Professor Chattopadhyay coined it, a "smorgasbord of humanity". The "one size fits all" approach has long been bemoaned by marketers around the world. But in India, a land of 325 languages and 22,000 dialects, it may as well be a guaranteed shortcut to failure.
Why is India so attractive?
Professor Chattopadhyay split India into five different spend-based demographics: "Deprived" on lowly incomes through to "Aspirers", "Seekers", "Strivers" and "Globals". It was in these latter two categories - where income levels exceed Rs500 - that significant growth is expected by 2025.
The critical elements to developing a business in India
Brands looking to build awareness in India face a number of challenges: low literacy, traditional beliefs, a lack of a common language and a suspicion of outsiders.
Novartis' "Arogya Parivar" ("healthy family" in Hindi) campaign illustrates an interesting approach to promoting healthcare in rural areas. This social venture looked to educate rural villages on a variety of health issues through means such as street theatre, hired health educators and flipchart presentations. You can read Professor Chattopadhyay's case study here.
2. Appeal & Affordability
Brands looking to appeal to Indian consumers must navigate a complex range of cultural traditions. Take, for example, the daily ritual of brushing teeth: what would a toothpaste brand need to consider? In rural parts of India, there's a history of cleaning teeth using natural tree sap and leaves. So how do you work alongside these established norms?
Affordability is another key factor which, in the fragrance and deodorant market, shifts from one region to the next - and is best tackled by pack size. This approach has also proven successful in the confectionery market where, for example, Cadbury's launched a range of smaller-sized eclairs with great results.
3. Aesthetics & Taste
India's diversity extends to all aspects of life and culture; something, said Professor Chattopadhyay, that Kellogg found out when it ventured into the breakfast market with its cereal products. At first it tried a smaller pack size, without success, before uncovering a game-changing insight - Indians prefer hot savoury breakfasts. The solution? Kellogg's spicy version of traditional oats - "Heart to Heart". The results? Sales jumped from 70m to 100m Rs and have been climbing ever since.
Distribution in India is not the same as distribution in the Western world. Professor Chattopadhyay neatly labelled this "Stalls versus Stores" to illustrate the difference between traditional and modern trade. Traditional trade, on average, serves up 110 brands per store whilst modern trade offers 706 brands per store. In terms of the density of store types per 1000 population, traditional trade accounts for 7.4 stores per 1000 people; modern trade equals to 0.05 stores per 1000. In value, this translates into traditional trade accounting for 99.9% of trade in India.
In the webinar, Professor Chattopadhyay presents examples of how two big brands - Marico and Unilever - have overcome these distribution and logistical challenges to succeed where so many others have failed.
Alliances are a crucial area for brands to make headway into India but Professor Chattopadhyay's emphasis was very much on non-traditional partners. Amongst them, brands should be exploring partnerships with NGOs and government agencies as well as the more likely corporate partners. Two key questions to ask when selecting a partner are:
- Which partners will be most able to deepen an incoming brand's understanding of the market and its many nuances?
- Which partner could be a trusted advisor on facilitating operational elements and enabling enhanced accessibility of the product.
Customer centric approach
The overriding message from the entire webinar was that the many different traditions, demographics and languages in India demand a truly customer-centric approach. This in itself requires strong top management support and investment into laser-focussed customer insight research.
Brands also need to foster community-level relationships, in order to leverage a dual purpose. Selling products plus providing a source of income for the community can help brands overcome India's natural suspicions of outsiders. Once brands can get it right on that front and hone in on the intricacies of this "smorgasbord of humanity", a keen eye on the different individualities of Indian consumers can make