And whilst government works on the mid-to-long-term plans to improve incomes and prosperity down the pyramid, Indian businesses have to work harder to draw up business models that cater to this large section of population. This is where most of the action will happen given that the low-hanging fruits of middle-class India that make up the top income quintile in the country is almost over.
So far, big firms have been content with tweaking their existing processes and brands to service a section of the “next 300 million consumers”. Launch a brand, or a business model, that caters to the rich and the middle-class, and over time adapt it for lower income consumers — think sachetisation, small value packs, brand extensions et al. It worked, but up to a point. Extending it any lower resulted in consumers not seeing value in the offering or the business model breaking by the sheer weight of costs piled up to cater to an affluent audience. The need now is to think and act afresh, and fortunately, some of that may have already begun.
Most city dwellers would have probably not heard of Bulbul, Simsim, Udaan, Nisha or Zed Black. Yet, each of these insurgent or emerging brands is creating waves across the hinterlands and the often“unseen” urban India. Riding on the Reliance Jio-led data deluge that has made Indians world’s biggest data consumers, video-led shopping apps like Bulbul and Simsim are redefining the shopping experience for small-town India. Though it is early days, these live video-led shopping sites have started building scale and are being noticed by the big boys of ecommerce at Walmart-owned Flipkart and Amazon.
A recent Kantar Worldpanel report on emerging brands in consumer expendables, fast moving consumer goods in industry parlance, throws up new names like Nisha hair colour and Zed Black agarbati
. Kantar defines emerging brands as those that have a market penetration between 0.5 per cent and 5 per cent in 2014, and managed to add at least one percentage point by 2018. If you think that was easy, consider this: Of the 400-odd FMCG brands within this penetration range tracked by Kantar, just about a tenth were able to hit this delta by 2018! Strong rural and regional presence, and focus on already deeply penetrated categories did the trick for Nisha and Zed Black besides eight others in the top 10 emerging brands list here.
An often ignored section of consumers are the small traders who need to buy stuff or service for their shop or such establishment. Udaan, a Bengaluru-based online business-to-business startup catering to shopkeepers has quietly become a unicorn, essentially a new business valued at $1 billion or more. Offering end-to-end logistics, delivery, even credit support did the trick for this two-year-old business where decades-old behemoths were just happy getting businesses listed on their platform and charging a subscription for it.
It is still early days for the likes of Udaan, Bulbul and Nisha. Hundreds of thousands of such businesses and brands have to mushroom across categories, geographies to provide the bulwark for the next phase of the much-needed consumption boom in the country.