Market Xcel’s Ashwani Arora analyses India’s diverse consumer market to provide insights into how demand and behaviours in both rural and urban cities are changing post-pandemic.

The pandemic’s impact on consumers worldwide has left an indelible mark, ushering in a new era of altered demands and behaviours. It brought about a significant shift in consumer behaviour worldwide and it is not yet clear whether these changes will be temporary or permanent. Brands must be able to understand and predict these changes to stay on top of trends that continue to redefine commerce.

To offer a macro view of the changing Indian consumer and a new winning perspective in a changing world, Market Xcel conducted a study with a sample size of 20,000 consumers across rural and urban India to analyse the consumption pattern during different times of the day and by different categories for urban as well as rural consumers.

In consequence, it’s fair to say that consumers are now more informed, conscious and inspired than ever before. India's growth story is spreading to rural areas and companies are looking to these regions for their next million consumers. There is evidence of the blurring of lines between rural and urban areas, which is a sign of overall growth and reflects the fact that consumer choices and needs may be strategically diverse but not fundamentally different. The widespread outbreak of digital transformation is driving growth in rural areas, fuelling innovation and enabling companies to expand into these markets.

New trends and opportunities

The current consumer market depicts shades of trends like sustainability, women's empowerment and a people-centric ecosystem with government aid and assistance reaching the direct beneficiaries. This has opened windows to economic opportunities in Tier 2 and 3 cities, creating a collective growth story in small towns and rural markets, and reflecting India's progressing landscape.

Although rural and urban consumers exhibit contrasting category preferences, we observed an overlap between categories. While categories addressing the fundamentals spearhead the choice decisions in the hinterlands, urban areas witness higher dominance of brand proliferation. Rural consumers are evolving, becoming more aware and aspirational, and the pandemic has certainly made rural consumers more experimentative, hygiene-conscious and tech-friendly than ever. Therefore, brands will need to think about their positioning to understand this mutually exclusive but collectively inclusive base of emerging consumers.

Upon analysing the top 50 brands by Indian consumers, we found that the food/CPG category was leading the pack. The key to keeping consumers engaged was undoubtedly a brand’s unmatched ability to connect with its audience and offer compelling innovations. Digging deeper, telecom has emerged as the medium that has effectively bridged the rural-urban divide in the current era. Evidently, technology has touched almost everyone and is propelling the world forward, transforming every aspect of our lives, the way we live, work and interact with each other. As industries (including new age and legacy brands) transition to the digital era, brands must adapt to remain relevant and meet consumer needs. Those that successfully navigate the changes and leverage digital technology are positioned for success. 

Need for deeper consumer connect

The blurring scenario is not just confined to two physical worlds, i.e. urban and rural, but has surfaced beyond and across many dimensions. With the world maturing and the new consumer mindset syncing in, there is a new directory of consumer vision and associated issues for marketers. Amid these changing times with technology all-pervasive, anyone can be a customer, from youngsters to a spectrum of the aged populace. For instance, while the older generation is accepting the digital era changes, millennials and Gen Z are spearheading the change. Therefore, it is important to observe, review and re-write rules of consumer engagement. The crux is that we can’t rely on one cohort – every bit is our consumer now and it is crucial for brands to fabricate a mindful yet comprehensive balancing act.

Moving on, the imperativeness of a consumer’s relationship with a brand is well-known. But how can brands fortify their relationship with consumers?

To begin with, by contemplating the psychological factors that influenced consumer behaviour during the pandemic. Marketers need to decipher the essence of these relationships and identify the confluence of strategies to drive growth for these brands.

During the upheavals, adapting to dynamic market trends is crucial for marketers to tailor their communications and achieve brand relevance and gravitas, the two untradable dealmakers. It is critical for brands to connect with consumers and resonate with their consciousness by demonstrating intentionality, curiosity and courage as gravitas cannot be imitated but only cultivated from within.

The local flavour

Local produce is gradually becoming the heartbeat of our economy. As consumers embrace nostalgia and shift back to their roots in the new normal, rural India’s new consumption trends are majorly fuelled by regional brands as compared to national ones. Regional and local indulgences are gaining prominence, not only in palettes but also in purchase patterns due to freshness, customisation, affordability and value propositions.

While the north and west witnessed hyperlocal food gaining popularity, the east experienced traction in food, jewellery, personal care and home care, and the south saw an upsurge in food, jewellery and sarees.

In summary, products with a GI (geographical indication) tag have gained prominence across all regions. Local brands operate within their own ecosystem (brand orbit), offering the familiarity of big brands while maintaining a local touch. These homegrown brands are ensuring consistency in quality, with some even being passed down through generations.

Certain national brands are customising their offerings and communication propositions to resonate with the locals. Not all regional brands have national aspirations as they lack deep pockets to compete. They focus on growing to a certain stature only, serving their loyal customer base, maintaining equity and preserving their unique selling points.

The Brand Xcel 2023 report provides insights into diverse aspects of consumer markets and brands, and gets to grips with the most pressing challenges that industry leaders face.

Among the Top 50 brands, Amul, Jio, Colgate, Oppo, Vivo, YouTube, Godrej, Dabur, Nestle, Dettol, Lux, LG, Samsung, Tata Salt and more emerged in both urban and rural, although the pecking order is different. The survey covered all four zones in India including north, south, east and west, and the report decoded top regional brands across India, revealing consumers' increasing affinity for regional and local tastes.

Most importantly, marketing thought leaders, experts and influencers have penned articles that can inspire businesses to reinvent themselves, reinvigorate their brands and push the envelope of marketing.