Wednesday, March 18, 2009

Product Innovation in India: A round-up 2009

Two years back a small software service company approached us for a rather unusual demand -They had made an enterprise recruitment software for SMEs in India. It was rather odd for us to see a company, which only talked of outsourcing and partnership on their website, suddenly waking up to India centered products. Being a design company, we often come across entrepreneurs and startups, who have ideas in the consumer products (physical products) domain, but we had never encountered a software company seeking UI design help for a local customer base. This was, to me a beginning of a new beginning of the software industry in India.

Looking at the other side of the spectrum, our team frequents the MIDC area (Industrial Zone) in Pune and meets with several small and medium manufacturing companies who are either supplier to the large auto companies (like Tata, Bajaj, Mercedez etc.) or they take up small jobs for large companies (i.e. machining, mould making etc.). Five years back they were seething in deep recession and the situation was grave. Apart from the industrial scenario at that time, the Chinese products had also given them a hard bashing. By and by we saw them rising up to the economic boom and fighting it out with Chinese prices and quality levels. Today some of them are talking to us in a rather unusual tone. “Economic ups and down will come and go, we need to charter our course. Being a supplier to large companies is no more the aspiration, we want to create our own products now”. A steel furniture manufacturer who has been exporting beach-furniture as well as supplying furniture elements and components to large companies like Godrej regrets the fact that the innovation he brings to the table of these large companies does not elevate his position or business in the eyes of the clients. These are the rumblings of the things to come.

Another small manufacturing company based in Pune’s industrial belt deals in making plasticware for homes. They make close to a million buckets a year, apart from some activity in the B2B space where they make small components in plastic for large companies. The owner has been driving new product ideas on his own till now. His business didn’t seem to have been affected by the slowdown. The essential commodities never take the big hit, we learnt from him. He is rather planning to use this little bit of slackness in the market, to diversify his product range. He, for the first time, has thought of hiring the services of a professional company to help in product innovation. He mentioned how buckets were just seen as buckets till yesterday. Today, people would prefer to buy a ‘set’ (a tumbler, bucket, soap-case and stool, all in plastic) in a matching color scheme, for their bathrooms. Now, he is forced not to think in terms of ‘items’ or ‘specific products’ alone. Systems thinking, is now a forced learning.

Let’s look at another scenario, that of Individual inventors. This is almost unheard of in India. If we Google the word ‘Inventor’/’Innovator’, thousands of results will hit the screen, but they are mostly from USA. The land of innovation, USA has probably more Inventors’ Associations than the inventors in India who eventually own the IPR for their invention. We were working on a design, of a safe paraffin stove for the South African market, which if tumbles by mistake, won’t spill the kerosene/paraffin and therefore won’t catch fire. Africa is known to have hundreds of deaths due to the unsafe design of these stoves. People, who live in thatched huts, some times leave their stove on during the night, for warmth. As we finished the work on this innovation, we came to know that there are more than 18 different innovations, which are registered on kerosene stoves, by individual inventors across India. The National Innovation Foundation, which collated these innovations was mesmerized with the content of these innovations, which ranged from improving the efficiency of the stove to using dual fuel in the stove. This segment of product innovation is the most potent one, but highly under-exploited.

Problems on the upper end of the market are quite different. Companies that woke up to design and planned innovation a decade back are in a different stratosphere of maturity. By now they have well established processes of insight collection and several thousand documents of market research piles up every year for their design teams to use. The new range of design and the launch is a big planned fanfare which is now a yearly activity. They already know that copying, western designs does not fetch them customer attention in India, anymore. Today, the Indian consumer wants to articulate his own needs, and wants them to be answered smartly. These companies are still struggling to find an ‘identity’. Over the years they have mastered the art of new product development and marketing. However, ‘design language’ is the higher question that is haunting them. VIP, Titan, Onida, TI cycles, Bajaj etc. are some of these big consumer product giants of the Indian market that are now raising the right questions of the brand identity of their products. Semantics is now, a known term in these design studios.

Asian Paints is a good example, which stands out in terms of establishing a full process of trend forecasting for the upcoming year. While Trend Forecasting is not new to India and has been used in the fashion industry amply, a non-fashion industry taking it up seriously in fully indigenized ways is definitely commendable. The Fashion Industry has been under severe influences of the designs showcased in Paris and other trade fairs like Premier Vision. However, the time has come, when Indian textile and clothing manufacturers are finally looking at an ‘Indian interpretation’ of these trends. This is a first step towards becoming comfortable with home-grown trend reports and projections.

One of the large Indian automobile manufacturer wants us to work on the Color, Material and Finishes for the next range of luxury vehicles. India started styling its own vehicles almost a decade back and this was well received by the consumers. But it is only recently, that serious thought has being given to the area of CMF (Color, Material and Finish), not only for the upcoming range but also for projections on the next upgrade i.e. three years hence of an existing product. These decisions previously rested with marketing or foreign design and styling consulting companies. But we can now say that the Indian automotive industry too, is fast maturing.

For me, who saw a lot of rants around the Chinese onslaught of consumer products, the growth of the service economy and two rounds of recession, dating with foreign brands, technologies, collaborations and even consultants; it is heartening to know that India is moving up the value-chain of innovation. It may not be pacing up but inching up for sure.