Thursday, August 16, 2007


Of Yoga and the Snack-food market

Of ‘Dahi Bhalla’ and Organized Retail

By Harish Bijoor

Q: How transferable are Western ideas, products, and business models
into emerging markets like India?

Ravi Poonen, Chennai

Ravi, at the very beginning, I do believe markets are about consumers and money. Both these aspects largely hold the same dimensions in most markets. Consumers are essentially mavericks and their minds and moods change dramatically. Money on the other hand is limited, and the splurge of money is dictated by an approach that is reasonably rational. Marketers vie for the attention of the consumer and her money.

Having said that, this does not mean that all markets are level. Markets in developed countries depict a pattern that is different than what we see in developing or emerging markets. Developed markets speak of an ability to absorb anything and everything international that has succeeded in a market quite like it. Developing markets however have a habit of rejecting clonal marketing strategies that have worked elsewhere. Developing markets demand a very unique and individual understanding of local reality, desire, aspiration and passion.

India for one, is a very different kettle of Pomfret altogether. It is as "aclonal" a market as they come. Our diversity patterns are humongous. This market demands customization. Acute customization.

The western idea is welcome, but the idea needs to be morphed to adopt an avatar that is completely acceptable to the local mind and mood of the consumer.

Early MNC entrants in the category of footwear realized this to their utter surprise. What they had worked beautifully in Singapore and Kuala Lumpur was not working as well in India at all.

There is an exception though .The premium category. In categories such as a Swarovski, premium cars and high end perfumes the market is entirely different and more accepting of the global thought, the global marketing campaign and even the blond haired model who will ask you to own a Gucci! The mass market is different. It is more about customization and local tweaking.

2. Can you think of some Indian brands that are poised to make a mark globally?

-Swati Menon, Mumbai

Swati, let me think!

Take Yoga. It is doing well.

I can't think of too many brands from the manufacturing sector though. For the past sixty years we have flogged the "Made in India" line that has not delivered at all. I believe we need to focus on the "Served out of India" line and most certainly the "Grown out of India" line in the future. We are great at service and our agri-practices are ancient and time-enduring. We need to package these for the future.

India and BPO is a brand that is clicking well. The services sector can offer hospitality and Indian holistic healing systems as offerings that will cause for the truly global Indian brand.

I do believe we can cause for and create a truly Indian offering in aviation space. Jet Airways can surely compete in this space. And so can Kingfisher in the future!

Q: I am just about to join a savory snacks major who has big ambitions for India. May I expect some ‘gyan’ on this market sir?

-Rajeev Reddy, Hyderabad.

Rajeev-sir, yes you may!

The savory snacks market then.

This has evolved over the years. Every new MNC entrant (do we call them that
anymore?) is actually upgrading from local taste profiles.

The 'Bhujia' market is largely sewed in by Haldirams and Bikanerwala and a
host of local players much smaller than these two as well.

Some insights (call it ‘gyan’ if you will), I believe in personally:

1. Snack-food upgrades need to largely keep in tune with the existing market
and its taste. Even a Lay's chip has to have the profile of 'Chaat' as a taste
variant if it is to attempt to be relevant to the local consumer.

2. There is a generic possibility of upgrading from wet snacks in the market
like 'Chaat', 'Dahi Bhalla' and even medium-wet snacks such as 'Kachoris' and
samaras in the market to dry [packaged versions. These snacks will need to
maintain taste profiles intact, but can offer product variants that are
different....for instance hard dough items that taste like 'chaat'....but keep
longer. The USP of this category is all about hygiene and consistency in
taste delivery.

3. There is a possible market for the baked savory, just as long as it is
not advertised to be baked. The moment you do that, there is alienation in
the market. Health is an issue and a non-issue in the market at the same

Consumers know a low fat crispy is good for the heart.........but really
don't prefer it, unless advised by the doctor with a threat.

Q: Retail is a growing industry. What’s real and what’s hype?

-Shiny George, Mumbai

A: Shiny, good question and good timing.

We are just about going through the birth pangs of organized retail in this county or ours. This is really the nascent stage of organized retail. At this stage, every player in the market is out to create all the hype there is necessary to create in the category.

I do believe organized retail has a larger than life image in the country as of now. The media is engrossed in this category as well. It makes for sexy copy!

The reality is that the size of retail needs to be defined before we get excited about it or put off by it. The secret lies in the numbers.

India is a big retail market. The world churns out a business of 6.8
Trillion USD in the retail segment. India is a 2.8 Billion USD retail
market. However, the important point to note is that in India, trade is
largely disaggregated. 98.3 per cent of all trade in this country is handled
by the small shop-keeper. Only 1.7 per cent of businesses are with the large

The growth prognosis for this industry is as varied as the vested interest
in the category touting the growth percentage.

There are numbers that are pessimistic and put organized segment retail
growth at 4 per cent per annum. And then there are numbers that predict an 18
per cent growth per annum!!!!

Whatever happens, fact of the matter lies in the reality that small retail will not get flushed out of this country in the next 25 years for sure. The “small is beautiful” model works well for this country.

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

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