The view from India: Three patterns of success

The Indian gravy train has slowed down. The market today is carefully choosing its winners. There are three visible patterns of success in the otherwise negative environment of scams and disappointments.

The first pattern is the Indian consumer’s desire to upgrade. Brands that have understood this and made it easier have won. Brands such as Mahindra & Mahindra in automotive and Indigo in airlines have grown profitably despite their categories declining and competitors running losses. Mahindra & Mahindra grew 23 per cent on the back of its utility vehicles, especially the XUV5OO model, while the passenger car category declined 6.7 per cent in 2013. Mahindra’s breakthrough model XUV5OO gives small car owners an easy upgrade to the aspirational SUV segment. It is fully loaded with features, has an accentuated design and sells at the price of entry-level sedans. Similarly, in the low-cost-airlines category, Indigo has changed the conversation from price to on-time performance. Indigo has upgraded the low-cost flying experience through its slick imagery and in-flight service.

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Brands have thus far marketed to an undifferentiated mass called India. Segments such as youth and luxury were seen to be small for profitable brand play. These niches are now becoming mainstream. While all brands in the country have portrayed youthful values, very few have targeted the real youth. Fastrack is one such brand in India that targets youth almost to the exclusion of others. The brand, which started by selling watches, is a now a youth fashion brand with a turnover of $100 million. Luxury is another such segment. Audi reported 57.42 percent rise in sales this May compared to the same month of last year. Mercedes launched its compact luxury car ‘A class’ in India in a bid to attract the young luxury buyer. In categories ranging from real estate to apparel, luxury is a segment that is on an upswing. The market has rewarded brands that have looked beyond the mainstream and unlocked the potential of the niche.  

The third pattern is about the upstarts who have played by leadership values and changed the rules of the game. Micromax is the India born player in the category of mobile phones and now consumer electronics. In the first quarter of 2013, Micromax garnered a 15 per cent share of the one million phablets sold in India close to Samsung that had 20 per cent. Micromax smartphones are loaded with features, run on the latest Android and cost a fraction of what a Samsung or an Apple does.

The message from the Indian market is clear: Brands need to leave their comfort and go beyond the tried and tested. Being safe is the greatest danger in these times.