Consumers Increasingly Prefer to Buy Indian Brands, Choose Experiences over Products, and Believe That Renting Is Smarter Than Buying, According to a New Study by Boston Consulting Group
MUMBAI—Fifty percent of people living in Indian cities bypass internationally famous brands to buy something with an Indian manufacturer’s name on it. More than a third forgo product purchases in order to be able to afford experiences that they find personally enriching. And almost a fifth prefer to rent something that they previously would have bought. These are among the findings of a new study by Boston Consulting Group (BCG), detailed in the article “Ten Trends That Are Altering Consumer Behavior in India,” which is being released today.
The new behaviors aren’t limited to high-income households or to consumers in India’s biggest, most sophisticated cities, the study shows. Indeed, people who live in India’s smaller tier 2 and tier 3 cities are almost as likely to exhibit the behaviors as those in the country’s tier 1 cities and metros. Household income has even less impact on the prevalence of the behaviors. The article is based on interviews with some 5,000 urban consumers in 16 cities, ranging in size from Mumbai (population 19 million) to Panipat (300,000). BCG’s Center for Customer Insight (CCI) oversaw the study.
“The surprise isn’t that high-income consumers are adopting these behaviors or that people in big cities are doing so,” said Nimisha Jain, a BCG partner in New Delhi, who leads CCI in emerging markets. “To a large degree, we knew that. The surprise is in the extent of the behaviors in urban centers of every size. Mumbai and Delhi might be leading. But you see the same things happening all over India.”
Social recognition—being perceived favorably by others—was one of the big themes of the study. “People in India are making no secret of the satisfaction they get by publicizing their activities via social network postings,” said Kanika Sanghi, a BCG partner who leads CCI in India. “Social recognition was the key motivation for half of the behaviors we found.”
Shining a Light on India’s Urban Consumers
India’s increasing wealth, urbanization, and changing gender roles, along with shifts to smaller family units, have coincided with the emergence of some significant new behaviors:
The findings have implications for a wide variety of multinationals and local B2C companies that want to succeed in India, which is on track to be the world’s third-largest economy within a decade. “These behaviors are creating a new landscape for corporations to navigate,” said Sanghi. “Companies that don’t move quickly to make adjustments are going to have a hard time.”
A copy of the report can be downloaded here.
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Boston Consulting Group’s Center for Customer Insight (CCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG’s various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCI is sponsored by BCG’s Marketing, Sales & Pricing practice and Global Advantage practice. For more information, please visit www.bcg.com/expertise/centers-accelerators/center-customer-insight/default.aspx
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