Shripad Kulkarni declares that the market dynamics are right for marketers and media to use the upcoming 100 festive days to accelerate the Indian customer bounce back.
The consumer products market hasn’t bounced back post-COVID. While all indicators are looking fine, even media spends for the Onam festival appear to have reached almost 90% of their pre-COVID high. Yet there is only cautious optimism in the air. Is the caution warranted? Or is it time we take a calculated risk?
To me, it does look like we all should. I think it’s time Indian media and marketers proactively drive the Indian customer market out of the woods on the back of the upcoming festive season. We look at this in three parts – the great Indian festive season, outlook for H2 2022, and leading the customer bounce back.
The great Indian festive season
The 100 days from Navratri until Pongal in Tamil Nadu are the real test of the revival of the Indian customer market. With festivals, weddings and the holiday season, they account for over a third of the customer market. More importantly, these 100 days set the momentum and the all-important “customer sentiment”. In a chat with me, Anil Viswanathan, CMO, Mondelez India, says: “A unique part of our culture is the fact that festivals play an important role in our lives. We have moved and migrated to different cities and are embracing different cultures. Yet, festivals bring people together, bringing a notion of celebration, feeling and a sense of goodness that is a very important chapter.”
A special analysis of festive campaigns by an expert panel concluded that festivals provide a huge rainbow of opportunities which can still be exploited. The spectacular diaspora across what we call “Bharat” is so rich that it provides a very big opportunity of buying moments and connect opportunities. The sheer expanse of rituals and traditions is replete with a myriad of opportunities to trigger demand and family and community connection; a lot can be done to strategically use festival buying moments across India and connect opportunities across the spectacular festive diaspora. The millennials and Gen Z, while they have a different take on the festivals, are also actively partaking in the festivities. In fact, the Festive Bharat Playbook curated 100 ideas for festive campaigns.
The outlook for H2 2022
Adspend is a good indicator of the marketer’s sentiment. The Pitch Madison Report February 2022 forecast 20% ad growth, with traditional media growth at 15% and digital media growth at a whopping 30%. The more recent Dentsu Report of July 2022 gives a lower forecast of 16%, with TV at 15% and digital at 31%.
The AdEx performance for H2 suggests a slightly pessimistic outlook. Print volumes have gone up significantly at 60% growth on the back of growth in the high contributing education, social ads by government, BFSI (banking, financial services and insurance), healthcare and auto. TV volumes have not grown, except for IPL, whose revenue is estimated to have grown by about 25%. Cricket is a big known driver of adspend, so marketers have been a little cautious in H1 2022.
The customer market shows a slightly different picture for Bharat segment, as compared to high-income and middle India.
Auto and air-conditioning (AC) are indicators for the high-income segment. The AC industry zoomed to a record six million units this summer, even though makers increased prices, while the auto sector registered its highest ever half-yearly sales of 1,826,483 vehicles. On July 31, Mahindra Scorpio-N opened for bookings and crossed 25,000 units, logging nearly 416 cars per second. The company reportedly went on to see a record 100,000 bookings over the next half an hour, grossing a mammoth Rs 18,000 crore in terms of potential sales value. This, for a base price of Rs 12 lakh, while the higher variants run up to Rs 19.5 lakh!
Destination weddings, another indicator of the high-income segment, revived in the December–January season. All in all, the high-income segment is already fired up.
Middle India can be represented by residential homes and high-end durables. Residential real estate sales grew by 60% in the first half of 2022 to 158,705 units across the top eight cities, from 99,416 units in the same period last year. Home sales in the national capital region (NCR) centred on New Delhi grew 154%, according to a Knight Frank report released on July 6. The white goods segment has seen a revival from the middle class who are upgrading. From industry reports, most durables companies are getting ready for a “premiumisation” this festive season with high-end categories. Middle India, too, is also looking ready for a rebound.
Bharat is represented by the FMCG sector. This sector’s 8% value growth in the first half, as per Nielsen, was a combination of volume and price-led expansion. It appears it will deliver 8–10% for the full year despite inflationary pressures. While this segment is hit hardest by high inflation, a good monsoon and government freebies could make up for it.
A ground report suggests that the huge migration from metros back to rural homes has not been fully reversed in, say, far-flung Mumbai. A significant proportion of migrant labour which returned to the hinterland seem to have got jobs at reasonable wages in their hometowns. The digital revolution has now reached the hinterland and e-commerce is opening up this market. So, Bharat is also poised for a reasonable rebound.
YouGov’s Diwali Spending Index has been tracking the purchase intent of consumers during the Diwali season. This year’s data reveals a spending propensity of 94.45 among urban Indians – up from 90.71 in 2021 and 80.96 in 2020 – highlighting a rapid road to recovery. This seems to be the clincher. We can lead the customer bounce back by accelerating it!
Leading the customer bounce back
I think media and marketers can now take the lead and accelerate the customer bounce back. How can this be done?
1. Deploy the balance budget for the festive 100 days
Marketers must push the envelope. Firing on all fronts this festive season, before the CFOs get into haircut mode, will get us back in the game and do a lot of good in the long run. It is about the top line. If we get a record top line, we have turned the corner and are back in the game. A high sales target with, if required, a lower yield should be the mantra. Go for those launches you have delayed. Food and health companies should look at the examples of Amul and Dabur, leading homegrown companies. During the pandemic, both launched new products and doubled their media investments, which have paid rich dividends.
Bharat festivals have moved from a single dimension to multi-dimension existence – they have different meanings for each customer. Festivals have not only become bigger but some have lost out and some have morphed with new thinking. There is a deeper meaning behind each festival which has not been captured in brand storytelling. A huge opportunity thus lies in buying moments and connect moments around India’s festivals.
All, and especially mid-sized companies, should invest heavily in digital. Just jump into the fray with aggressive plans and successful D2C segment companies as role models. Those who are already making significant investments in digital must experiment with new territories like social commerce, metaverse, NFTs etc.
2. Play up the drivers of shopping
We know that social proof and retail therapy are known drivers of the shopping frenzy. “Build back better” is an emerging theme working with the aware audiences and the upmarket youth. EMIs and e-commerce, coupled with massive offers, are in any case the festive norm. But media and marketers can use the content and social media to consciously “play up” the drivers. Social proof means we must get the first 5% of shoppers to go ballistic in all shareable media. Retail therapy can be easily linked to the festive happiness mood and some categories can play up the build back better theme, like the Cadbury festive ads for last two seasons.
3. Let’s create the world’s biggest shopping festival this season
One of the first shopping festivals was the Dubai Shopping Festival. Time to scale this up. Offline media can take the lead and create the world’s biggest O2O shopping festival. Imagine, the Auto Expo in 25 metros in partnership with all newspapers, TV channels and the government. One needs to say nothing more!
The market dynamics are right for marketers and media to use the upcoming 100 festive days to accelerate the Indian customer bounce back. I have outlined a few actions but as Bruce Rosenstein says in his book Create Your Future the Peter Drucker Way, the future must be created – day by day, person by person – rather than be left to chance. And the first step is a future-focused mindset.