Nielsen

Consumer 360
India
The Next Big Thing
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The number one question we are always confronted with as we are

asked to divine the future consumer for our clients, is usually some
variation of ‘What’s the Next Big Thing?’.

Naturally, this will differ by consumer, geography and category.

However, more often than not, the answers that we are encouraged to
unearth deal with broader, deeper, more systemic trends. And these
are precisely what we made the locus of our intellectual inquiry during
the latest edition of the Nielsen Client Conference – Consumer 360.

This publication is a tribute to all our Nielsen clients who made it a success with their views
and keen interest, which always drives us to unearth the most insightful consumer
understanding.

In many ways, this was an unprecedented client conference for The Nielsen Company. To have
an inaugural address by Shri.Nandan Nilekani, Chairman of the UIDAI about a single initiative
that had the potential to change the way Indians live, was as breath-taking as it was grounded.

That set the ground for the rest of the sessions as leading voices from industry, media,
marketing and a few consumers themselves deciphered the future for all of us. This publication
chronicles what we see as the big drivers of change in India. As the retail consumer evolves, and
the rural consumer comes to the fore, both telecom and the internet are set to redefine the
marketing landscape in ways many of us may not yet have imagined.

Or have we? The insights by Thought Leaders from across industry and underscored in the
following pages may yet provide a few clues to how we should re-imagine a new, bigger,
brighter, more incredible India.

Piyush Mathur

President, India Region

The Nielsen Company

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Aadhaar -
Bettering a Billion Lives

“The Aadhaar number will create a much more open

marketplace, where hundreds of millions of people
who were shut out of services will now be able to
access them”.
Nandan Nilekani
Chairman, UID Programme

Given the changing socio- economic landscape of the
country, building a case for the Unique Identification
Program, Nandan Nilekani, Chairman UID Programme,
outlined four trends taking place across India:
l A demographic disruption taking place with an
expected 11 million new people joining the workforce
every year for the next five years.
l Mass migration to cities. The urban population is
expected to grow by 31 people every minute for many
years to come.
l Low cost mobile phones mean all social sets have
access to the same or similar content.
l Indians are increasingly impatient with failing systems.
As a consequence, service providers are responding
more rapidly than ever.
Nilekani said the shift in attitudes amongst customers was
creating a new urgency for services and infrastructure in
the country. And though there was the emergence of
solutions that respond to these forces, there is a missing
piece that has limited their effectiveness, and their ability
to build scalable, sustainable solutions for the poor
consumer: the lack of a universal identity infrastructure.
And it was this gap that Nilekani hoped the Aadhaar
number would fill.
In short, the Aadhar number will offer two critical features
i) Serve as a proof of identity and address, and
ii) Allow agencies to confirm when a service has been
delivered to an individual.

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The Crossover Shopper

‘A Coming of Age’

“Retailers usually see shoppers gravitating towards one or

two shop types to meet their needs as markets evolve, the
‘Crossover Shopper’ is a phenomenon that has come of age in
India as shoppers have now developed a fixed set of stores
across format types to meet multiple needs:”
Radhika Chandok
Executive Director, The Nielsen Company

Various factors such as the growing economy, media
exposure, rising affluence and the availability of new
products and services have led to rising consumerism in
India. A study conducted by Nielsen India attempted to
understand and map shopper habits and retailer strategies
across urban India.
Of the shoppers studied, nearly 40 percent claimed to
know the prices of most items and nearly half (45%)
claimed to notice a difference in prices across modern and
traditional trade formats.
The study showed, the Indian shopper is simultaneously
loyal to multiple store formats rather than gravitating
towards any one kind. He or she isn’t bound by rules either
– for instance, the Indian shopper flits across formats to fill
shopping baskets with different categories from each store
type in addition to the general store typically visited.
The key takeaways include:
l The Crossover Shopper has come of age. Indian
shoppers have become more loyal to a fixed set of
stores across store types- modern trade and traditional
trade.
l Indian shoppers seek better value regardless of store
format as experimentation declines
l The next BIG things in retail are set to be e-commerce,
greater in-store innovation for shopper
engagement, and shopper-oriented supply chains

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Aligned Retail Ecosystem or ‘ARE’

What is ‘ARE’?

“If we don't have an approach to deliver ARE, then

we won't hit the target.”
K Radhakrishnan
President, Future Fresh Foods Ltd., Future Group

Aligned Retail Ecosystem or ARE refers to the system of
managing a myriad set of interdependencies with the retail
business that have to be interwoven into a failsafe, fool
proof, work flow that works like an “eco-system”. The
interdependencies can be bunched together to form an
“assortment”.
For the retailer:
l sharper positioning
l clear link between financial plan and store assortment
l efficient SKU and inventory management
l basis for continuous review and improvement
l NHQ and Zones fully aligned

What’s in it for the various stakeholders?

For the supplier:
For the shopper: l know exactly which SKUs sell in which store,
l better choice of products aggregated up to a region
l improved availability l can study the region wise sales more accurately
l consistency of range and availability l can forecast sales more accurately
l more “newness” l can monitor OOS data more clearly
l cater to the local range more effectively

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India’s Rural FMCG Market:
The Rise and Rise of Rural
“The rate at which rural FMCG market is growing today, by
2025 it will be worth $100 billion , more than the GDP of
Ukraine”.
Key Findings
l The Indian rural market is set to become a USD100
billion opportunity for retail spending in the next
fifteen years
l For nearly half of the largest FMCG categories, rural
India now contributes more to their growth than urban
l The arrival of the ‘New Rural Consumer’ signals the
need for marketing strategies tailored to them;
businesses should target high potential villages that
will present the next BIG opportunity
The rural market is currently worth approximately USD 9
billion in consumer spending in the FMCG space annually.
The findings of the study show that food categories will
drive the bulk of the additional USD 91 billion into the
marketplace by 2025.
The study also found a surprising set of priorities. In rural
areas, education of children ranked second, after having a
good crop.
Prashant Singh
Vice President, The Nielsen Company
On the consumption front, a third of rural consumers are
eating biscuits for breakfast and one in six rural buyers of
hair dye now uses colour other than black to indulge in the
trend of externalized beauty that is picking up fast in rural
areas.
The study also revealed that:
l Rural purchasing power has grown faster than urban in
the last six quarters
l Faster growth in rural is not limited to penetration;
today the rural consumer’s frequency of consumption
is growing faster as well, demonstrating their
entrenchment in these categories
l Instant noodle sales are growing nearly twice as fast in
rural India compared to urban, in both penetration and
frequency
l Seemingly ‘urbane’ brands in categories like deodorant
and fabric softener are growing much faster in rural
India than urban
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The 3G Phenomenon in India:

Hype or Reality?

“While service providers have succeeded in popularizing

the concept of 3G and articulating its promises clearly,
consumers seem tentative about their disposition to
embrace the technology”
Arjun Urs
Director, Client Solutions, The Nielsen Company

A Nielsen study on the Indian telecom market brought out
revealing insights about expected 3G penetration in the
telecom market.
Key Findings:
l Only a fifth of India’s urban mobile users intend to
adopt 3G initially, universal penetration to take a
decade
l Initial adoption will be driven by working professionals
and younger consumers
l Amongst urban subscribers who intend to adopt 3G,
63 percent plan to upgrade handsets
l 35 percent of urban subscribers will leave their current
service provider if they do not offer 3G
The study found that nearly 70 percent of urban mobile
subscribers are aware of 3G services and 63 percent had
familiarity with it as a concept. Even with an enhanced user
experience on a 3G network, driving migration to 3G
devices will be a challenge. The study found that bundling
3G services with new handsets will be the most effective
course of action for telecom carriers.
According to the study by Nielsen, 3G’s success in the
Indian market will depend on three key strategies:
l Creating a compelling user experience through services
and handset upgrades
l Creating a strong brand association with 3G and
demonstrating the relevance of services
l Merely positioning 3G as ‘faster’ and making it
affordable will not drive adoption in India

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Social Media:
The Big Media Revolution

“Facebook is an increasingly vital link between consumers and

brands. We have leveraged this strength in the US market. We
are certain that we can use our expertise to help achieve the
same objective in India for vibrant brands.”
Farshad Family
Managing Director, Nielsen Media

The Nielsen Company has also ventured into the social
networking space, measuring the effectiveness of
marketing through social networking sites.
Facts on Social Media in India:
l Facebook in India has over 15 Million users, which
is more than 30% of active internet users in India
l 3 out of 4 social media users visit a social networking
site at least once a day, and a discussion forum once a
week
l Facebook and Twitter’s India base has grown by 100%
in 2010
l 60 percent of “social media teens” spend more
than 30 minutes a day on social networking
l 31-40 year olds are the most active group on
independent review / opinion sites
l Social media users are spending significantly
longer hours on social media channels everyday
l 3 out of 4 social media teens have become fans of a
brand online
l Clicking on an ad or becoming a fan of a brand are
among the top 3 activities

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The Buying Brain

Leveraging Neuro Marketing to Maximize
Competitive Advantage

“We know what is going on in the consumer’s mind

because of what’s going on in the brain”
Caroline Winnett
Chief Marketing Officer, NeuroFocus

Neuro Marketing: A study of consumers' cognitive and l Eye-tracking and pupillometry pinpoint hot zones
affective response to marketing stimuli. l GSR (galvanic skin response) confirms engagement

Trends that lead to the Neuro Marketing Revolution: What is measured?

l Increasing power of computing technology l Attention

l Accelerating breakthroughs in neuro science
What does NeuroFocus do?
Apply brainwaves to understand the effectiveness of
branding, products, packaging, communications, in-store
experience -- anything, that can stimulate the mind, or
persuade the consumer.
Techniques:
l Emotional engagement
l Memory retention
How is the metric translated into market performance
indicators?
Purchase Intent: Directly translates to sales and volume
Awareness: Messaging comprehension
Novelty: Level of uniqueness and differentiation in the
mind of the consumer

l 64 sensors collect data 2,000 times every second to Neuro Marketing is applied to all areas-Brand, Packaging,
fully capture activity across all brain regions Product, Advertising, In-store, Media and Entertainment.
l High resolution dense-array EEG measures brain
response

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Panel Discussion
The BIG Media Revolution:
Not Just a Remote Possibility - Social Media, Digitization & Marketing Innovation

Moderator:

Farshad Family,
Managing Director, Nielsen Media

Panelists:

Kirthiga Reddy, LV Krishnan,

Director of Online Operations and Head of Office, Facebook, India CEO, TAM Media Research

Dharini Mishra, Krishna Prasad,

GM & Global Head - Brand Management, Suzlon Group Chief Experience Officer/
Head of Digital, Dentsu
Vineet K. Singh,
Business Head, 99acres.com & Naukrigulf.com

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Key Insights:
1. How should companies be thinking about interacting
with broader consumers or potential customers online?
Kirthiga Reddy: The biggest thing about interacting with
the social media community is knowing where your
customers are and how to become a part of their
conversation. It’s a combination of how brands use the
power of a platform like Facebook, combined with the
innovation that the platform can come up with.
Krishna Prasad: Several brands engage with social media,
but everyone follows one leader. Ideally, a brand should see
what will work for it rather than just follow. The same
metric doesn’t apply for everyone.
2. If companies are trying to reach their audiences using
social media what does it mean for traditional media like
television?
LV Krishnan: Online and television complement each other.
News channels put out tweets on their tickers and
sometimes these tweets are also answered by television
anchors. Even on reality shows, eliminations happen online
with viewers logging on and voting for their favourite
contestants.
3. Using online space, some companies have built a
community or a brand, how should others replicate that
success to build their brands, or to build support around a
social cause?
Kirthiga Reddy: TV gives a brand mass reach and through
TV you get to a huge audience, who can be engaged with
on Facebook. Pepsi in India is a great example of drawing
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people to their Facebook page, through their outreach
campaigns. A company must decide if they want to use
social media as an afterthought or build a communication
strategy bottom up. Another key factor about ‘community’
is to keep in mind who the target audience is for the
communication. It is not just about getting die hard
customers but getting their friends to use the product. It is
important to connect what the brand stands for and what
the consumer wants.
4. Taking social media beyond marketing what
applications do you see for the medium at your company?
Dharini Mishra: Employees need to buy into the promise of
the brand as well. Social media helps in that engagement.
Employees feel positive about the company when they see
positive buzz about the company on social media.
Future Trends:
Krishna Mohan: Internet growth in India has always been
linked to PC penetration, but social media does not need
the use of a PC. Since social media can also be used
through a mobile device, it has huge potential in the
country.
Kirthiga Reddy: More awareness and measurement will
help, as it will increase use of the medium. Also hope for
innovation in applications, to further increase proliferation.
Vineet K Singh: The shift to social media has begun. This is
the experimental phase for companies to understand and
realize what is relevant to them and their brand and find
which platform works best for them. The introduction of
3G services should further help this trend towards social
media.
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BIG Panel Discussion

The Future of India’s Consumer

Moderator:

Sam Balsara,
Chairman & Managing Director, Madison World

Panelists:

Atul Singh, Mahesh Vyas,

President, India & South West Asia, Coca Cola CEO & MD, CMIE

Neville Taraporewalla, Piyush Mathur,

Head- Advertiser & Publisher Solutions Group in India, President, India Region, The Nielsen Company
Microsoft

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Key Insights:
1. Marketing needs to be a combination of gut feel and
science. Do you think companies need to bring more
science into marketing? Is more success achieved through
observation?
Piyush Mathur: The owner’s science of observation is
market research, whether done by self observation or by a
research agency. A consumer’s need is met by the marketer
who observes a consumer, identifies the unmet need of
that consumer and then addresses it. That is where art
comes together with the science of marketing. Rick Kash
and David Calhoun’s book “How Companies Win” talks
about the fifth ‘P’ in marketing- Precision. With the world
emerging from the recession, supply clearly outstrips
demand and hence “precision” is key to a marketer’s
success from a consumer point of view. Going forward,
market researchers must listen to the consumer and try and
predict the future.
2. How far away are we from the Internet helping build a
brand?
Neville Taraporewalla: Consumers have changed
dramatically. Today aspiration plays a big role in driving
consumer demand. Online consumers have a drastically
different behavioural pattern from traditional consumers.
The information available on these consumers, through
surveys etc must be used to understand their needs and
then build effective marketing communication to
successfully build a brand. The web will always be part of
the overall media mix, marketers will have to alter the way
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they reach out to consumers factoring in the web.
Television will give you high reach, much engagement will
come from the web.
3. What is going to be the Next Big Thing given the macro
economic data available for the Indian economy?
Mahesh Vyas: The Indian economy is doing extremely well.
If you have a product or a service it is bound to sell. But, it
is important to see how much better you are performing
compared to the economy as a whole and the key is to
measure the sustainability of one’s growth model.
Investments into India are very high. But with regards to
consumption demands, there is huge disparity in the levels
of spending and potential growth rate available. India
weathered the global economic slowdown remarkably well
and it was only because the Indian consumer had the
money and was willing to spend. The socialist view of the
economy is one of the past.
4. Are volumes in sales higher than marketing costs in
India?
Atul Singh: Marketing costs are rising, but consumption is
as well. The overall buoyancy in the economy is indicative
of that. But how brands interact with consumers will
change. Television will continue to be important for the
advertiser, but the digital space is gaining currency. Also,
there is a huge population in the country that is entering
the consuming class for the very first time and this means
not just a huge opportunity for marketers but also a very
big challenge.
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