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Money for value: A paradigm shift in consumer mindset in India

A couple of decades ago when I started traveling abroad for business, my favorite pastime was to visit large stores and study the myriad of high-end products available on shelves there. I always dreamt of the time when the Indian consumer would willing to pay for value rather than only seek value for money. There was, I visualized, a wealth of consumer products to be enjoyed, should the cosnumers in India grow in their capacity to pay, and be willing to change the thrift midset at the same time. Once considered a highly price-sensitive market, India is now rapidly evolving into a value-driven market. The economic might of the middle class and emergence of confident millennials has given rise to the sentiment where customers are ready to shell out extra money for a product offering better value. Many millennials today are earning more in a month than their parents earned in an entire year. They are way past the stage of struggle for survival and are trying to live life to its fullest. They want to try better products, new features. High penetration of the internet has also fueled the aspirations of the new generation, both in terms of awareness and accesibility. Not surprisingly, India has emerged as one of the biggest markets for high-end mobile phones, cars, appliances and various other luxury items. This sentiment is contagious and fast gripping every section of the society. 

Consider the case of real estate. Just a couple of decades ago, buying a home was considered as one of the first priorities, and it used to be a tough task too. Most homebuyers cared primarily about having a roof over their families’ heads. Other important considerations were about the location and the safety of the residence. However, things have changed radically over the years. Now, several other factors are considered important while purchasing a property. Accessibility of markets in the catchment, hospitals, workplaces and schools, availability of green areas and play areas in the vicinity, modern facilities like gym, clubs & swimming pools, construction quality & design, services etc influence the decision of the home buyers, even if it means paying extra for it. The case of cars and 2 wheelers is similar. Customers today are opting for cars loaded with features that ensure safety, connectivity, luxury, entertainment and environmental protection on the go. High-end bikes are in vogue now, and it is almost imporrisble to spot the base model of the once ubiquitous entry level people’s car on the roads.

The real revolution is inside homes where, due to the extended work from home scenario, customers are opting for products offering more than their basic solution. For example, customers are preferring more expensive air-conditioners which are also purify ambient air and save electricity. The definition of seeking value for money has changed to paying money for value. The popularity of products that offer comfort, safety, health and hygiene at the same time is on the rise. No matter that these products are more expensive than conventional ones.

This shift in the buying behaviour of customers is fast catching the attention of the corporate world. Many brands are now designing products loaded with features and providing much more value than basic utility. Products offering style, beauty, class, multiple-utility and durability are attracting customers and rapidly making a place for themselves in the market. The new-age consumers prefer companies and products associated with environmental friendliness. The success of many new-age D2C cosmetic brands is built around this idea. They are far more expensive than the cold-creams and fairness lotions of the yore, but have been able to carve out a niche for themselves with socially conscious consumers. Many corporates are associating themselves with active social causes like girl education, tree plantation, women empowerment, health & hygiene etc. I remember once when we sponsored the construction of a dog-shelter, many consumers wrote on our instgram that they would never buy another brand.

Better economic stability and easy financing plans are also motivating customers to live a life of luxury and comfort. This is what attracts them to high-value products, even if they are more expensive than products serving basic utility. In these times of extensive information dissemination, open communication and sharing, value-addition to a product must go beyond simply adding extra features to a product. After-sales service, digitally savvy customer care, furnishing accurate information, product updates and user generated content are also extremely important for modern customers.  

This evolving consumer behaviour is encouraging corporates to invest more in R & D and innovation for their products. It is also fueling a healthy race between the companies to develop better products and offer better customer service to the products. Such competition was always there in the market; however, earlier price sensitivity was a serious constraint. As this constraint is gradually fading away, corporates are getting much space for the development of higher-value products, and the discerning consumer is the winner.



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