been just a little over three months since the last BT-IRICS survey,
but as far as Consumer India is concerned, it's already a different
era. Back in April 2003, the index-which measures consumer confidence
across 10 major cities-stood at a not-so-happy 133 (base 100). Pan
to September, the index has shot up 25 points to 158, a 12-month
high. On virtually every parameter of consumer sentiment-be it current
economic situation or future expectations-optimism scores are zooming
north. But what should really warm the cockles of the marketer's
heart is that for the first time in the past 12 months, the consumer's
buying intent has moved up along with the sentiment. What does it
That after months of expressing confidence
over her tomorrow, the consumer is finally willing to open her purse
The consumer's quick shift into the feel-good
zone has been helped along by several factors. Top of the list:
a generous monsoon, which has perked up sentiment across the economy,
including the stockmarket. And so much so that even the twin blasts
in Mumbai late August could not dampen Dalal Street's smart rally.
"If the market for consumer goods doesn't pick up this year,
then when will it?" asks with mock consternation Atul Sobti,
Senior Vice President (Sales & Marketing), Hero Honda. Indeed,
that is what the consumer seems to be saying. "Dealers are
reporting a surge in walk-in consumer enquiry, although sales for
July-August are down because of rains and shraadhs. It's the lull
before the storm," reckons R. Ravi, Head of sales at Godrej
Yet, if you thought marketers of everything
from consumer durables to apparel were firing on all cylinders,
you'd be mistaken. Although the festive season is round the corner,
there's no surge in advertising spends of most big companies. Why?
"For businesses, the current buoyancy is clearly demand led,
not cost related," says Santosh Desai, President, McCann Erickson,
meaning that since consumers are already in the mood to buy, they
feel no necessity to go any extra mile to woo them.
So expect all the regular promotions, much
like the previous years', but no 'marketing spoilers' like the Akai
exchange-mania for CTVs that forever changed the industry equation.
On a larger level, the upturn in consumer sentiment may not translate
into more jobs in the economy (that's notwithstanding the white
collar jobs in BPO, telecom, retail and it services). In fact, the
poll respondents think as much-a bare 11 per cent expect more jobs
over the next 12 months. That's a drop of 1 percentage point. A
couple of things could be behind this "jobless growth".
One, no big job-creating capital investment is happening. Two, companies
are focusing on cost control, hence seeking more productivity on
the same headcount. "Earlier companies would start hiring immediately
as soon as demand picked up, but not any longer," says Gurdeep
Hora, Managing Director of placement firm Synergy Consultants.
There's a silver lining, though. Most industries
are through with downsizing and even if they haven't been hiring
anew, they've been generous on increments. "People's expectations
from the economy have improved. Now they're willing to buy a house
on loan," says an upbeat Niranjan Hiranandani, Managing Director,
Hiranandani Construction. Ultimately, the momentum of middle-class
aspirations coupled with an upbeat consumer sentiment could result
in increased sales across most consumer categories. Only that marketers
would have played very little role in the boom.
Consumers are raring to spend. Marketers should
cash in on the sentiment with innovative plans, says B. Narayanaswamy.
| HOW WE DID IT
| Total sample 1,187
10 cities: Delhi (121), Mumbai (119), Chennai (120), Bangalore
(126), Hyderabad (118), Kolkata (120), Ahmedabad (120), Lucknow
(95), Kochi (126) and Nagpur (122)
Purely random sampling process; Equal representation of
male and female; SEC A 573 respondents and SEC B 614 respondents
Face-to-face interviews using a structured questionnaire
The questionnaire covered three core areas: current assessment
of economic situation, expectation about the future economic
situation and overall consumption mood
Besides key variables for indexing, the survey also measured
All data was weighted; each variable first indexed for Nett
Data then indexed as proportion of total score possible
This index then weighted to arrive at All India Index of
Indica Research Index in September 2003 stands at 158. It is a clear
increase from where it was in April 2003, when the indexed figure
stood at 133. It had stayed pretty much unchanged from January.
Moreover the sentiment on all the constituent
elements has improved. This is so particularly on the expectations
on the business conditions, and on the inflation conditions over
the next year. Consumers are in a spending mood too in the oncoming
Corporate results that have been announced
in the last several weeks, the pay hikes in many of the sectors,
the 'feel-good' that a buoyant stockmarket and abundant monsoons
create in an average sec A or B householder, expectations on the
likely festival-linked bonus payouts, availability of finance...are
all clearly aligning themselves into creating this mood on the future
and the willingness to spend.
The data on the indicators would indeed suggest
that the proportion of those who see the future outlook as 'better'
has improved; and of those who see the future outlook as 'worse'
has also dropped. So, the shifts are adding to each other as well-unlike
the last time round, when the shifts were cancelling each other
out. (The index is derived from the patterns at both ends of the
We note here that:
- It comes at a time of the year when consumers
do spend and marketers do have control on what they wish to do-unlike
in, say, January where an opportunity to energise consumption
depended on the contours of the budget, that too within a larger
mood of saving rather than spending.
- It comes at a time when the stockmarket
has risen sharply. One can, therefore, reasonably expect just
the right amount of discretionary monies jangling in the wallet
of the retail investor-with a wide range of options to spend it
- It comes at a time when the investment outlook
is looking good too, judging from capacity utilisation metrics
in the larger manufacturing sector, and the status on credit availability.
So the long-range outlook is also looking good, besides the portents
on new job creations.
So it's much like the moment when the 'ignition
sequence' starts in the movie Apollo 11, leading to the 'lift off'.
So marketers would want to share the optimism, and consider providing
a sharp impetus that gets all the engines running, in the sense
of a repertoire of consumption, purchase and replacement behaviours.
Whether it's new products or new schemes, whether new price points
or new retailing methods- it's time to be innovative, and indeed