The Indian Marketplace – always the bazaar

by Dina on October 17, 2007 · 5 comments

in Indian Culture,Market Insights,Qualitative Research Perspectives

Niti BhanNiti Bhan who writes Perspective 2.0 shares a snapshot of three mega trends in the Indian marketplace, the key words according to her being: “aspirational, ambitious, entrepreneurial, forward looking and pragmatic”

Multiplying Media: “The urbanized consumer has become as demanding and sophisticated as any in the world and the aspirations of the rest are influencing their purchasing decisions even more. Information sources have proliferated across the nation, creating a state of flux as aspirational levels across all segments have gone through the roof influenced by the stories of success spread virally by word of mouth, the reach of the mobile phone coupled with the social networks of communication that have always existed.”

Consumer Royalty: “This has directly influenced the demands and expectations of the local consumer – they want the best, but their heritage and experience with scarcity adds a bottomline value to their evaluation of products, services and brands. They will not pay a premium price with blinkers on, even if they can afford it. It must provide value for money remains a steadfast value across all income segments – but the definitions of value are certainly changing and in flux – it could be status, exclusivity, luxury or any other – but the goods purchased cannot be shoddy or barely localized versions of stale products.”

Flat & Spiky: “The psyche of the Indian shopper has not changed – the marketplace has always been a bazaar to look for the best bargain, a social activity where one haggles over goods, touches and feels them for quality and value, plays out the eons old drama of the price negotiations.”

gurgaon mallWhich makes me wonder whether the new malls proliferating all over India are really offering up entertainment rather than actual purchase opportunities – participants in my qualitative research studies rarely talk of actually shopping at malls – they are great for family outings on weekends, for entertaining kids, to go for a meal to, to browse what’s new. The Hindu states that “currently, the Indian retail industry is valued at $330 billion of which organised retail is about two to three per cent (about $7.5-8 billion).”

My own observation is that there is a much much higher number of footfalls generated by these malls, as opposed to real customer purchases, especially in the luxury goods and specialty stores. They provide us with the opportunity to see-touch-feel-experience products in a comfortable air-conditioned environment, however this doesn’t always transfer into sales! When I bought all my household goods for this new place, I did visit malls to look around – but finally purchased the stuff from my local vendor. When I was looking for a treadmill, again I checked some out at malls – but again found myself buying it from a small specialty fitness store in Bandra. It was not just about price – when you are buying expensive things, there is a whole expectation of service based on relationship and trust – the malls don’t really inspire my confidence as much!

And value-for-money in India means a whole different thing – I have heard many visitors to the country say that they have been told that they should bargain everywhere for everything – that is so not true! There are nuances and subtleties in understanding what’s ‘bargainable’, what’s value-for-money, and what’s simply over-the-top and should be ignored.

It is the bazaar style of operation …. and not the cathedral-building described so well by Eric Raymond in his seminal essay, in another context:

“the Linux community seemed to resemble a great babbling bazaar of differing agendas and approaches (aptly symbolized by the Linux archive sites, who’d take submissions from anyone) out of which a coherent and stable system could seemingly emerge only by a succession of miracles.”

This is the Indian marketplace in my opinion!

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{ 5 comments… read them below or add one }

1 niti bhan October 17, 2007 at 12:09 pm

Yes, exactly, thank you for the insightful addition to “value for money”. Otoh, touching upon your observations on “window shopping” vs actual purchase, I wonder if the malls unintentionally serve the function of a ‘flagship store’ kind of concept, where we go to see, touch, feel in comfort and spaciousness, but mentally assume [just guessing here] that we’ll get a better rate back at the ‘usual’ store, which is usually overcrowded and narrow and one must ask for the product to be handed to us and so not conducive to browsing. I’m not articulating this well, but there’s a sense after reading your post that it could turn out to be that while the ‘organized sector’ is *only* 3% thus the assumption of huge potential in growth, the concept may never translate across the ‘indian psyche re: bazaar’ into actual sales? It reminds me of IKEA’s first foray into Japan where they came head on against the japanese culture simply not supporting the DIY concept at all, thus their return twenty years later with pre assembled products delivered and also scaled down in size. Even here in Singapore, after browsing the mall, doesn’t one go back to Mustafa’s to make the actual purchase?

2 Dina October 18, 2007 at 10:31 am

Hi Niti .. thanks for dropping in and leaving that thoughtful comment .. I’ve been a long admirer of your observations and insights! I tend to agree with your feeling that while the malls are great for window-shopping, actual purchases really happen elsewhere. That’s the point I hoped to make in my post too .. when I said that Indian marketplace will remain a ‘bazaar’ for a long while to come! I just wonder how many malls will fall by-the-side if they don’t adapt to our ‘bazaar-psyche’ and believe that they can simply import Western models here – your eg of Ikea makes that point well.

3 reena December 6, 2008 at 4:27 am

i think its mall is the exilent mall i think i go again & again when ienter in mall not gess i am where i am not hopes that my city will be such as

4 Trust in India March 3, 2009 at 11:44 pm

It is true that Indian market place will always stand for “Value for Money”, no matter how sophisticated they are. This is also the basic mentality of Indian shoppers as well…

5 Manjunath Shettigar April 2, 2015 at 4:14 pm

I have no option but to fully agree with your viewpoint even after more than half a decade !!!!

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