Saturday, January 14, 2012

India Trending 2012

As 2011 ended, the last week of the year was a good time to socialise a bit. As an innovation strategist, I think it is a blessing to be living in a middle-class housing society. I don’t need to travel too far for insights into consumer innovation for India. It happens right in my house and also next door. My house is located in one of the suburbs of Pune, which earlier used to be a satellite town of Pune and today is probably in the heart of the city. Next to our gated community (somewhat dated building by now), there is a small slum settlement, which is a good source of support manpower – drivers, house-maids, cleaners, painters etc. Our house-help, who lives there is a constant source of updates on what is happening in the rural belt of the region; what is the prevailing political mood around during the local elections etc. Residents of our housing society are an upwardly mobile crowd with both the spouses in a family gainfully employed. Since our building is close to a busy street, I can walk down to purchase daily consumables and at the same time visit a bank, gym or a sports stadium - all at a walking distance.  Thus I get a wide range of spectrum to catch the pulse of people.

A fellow resident happens to be a distributor of luxury eyewear in the state. I asked him if there was any pointer to a ‘double-dip’ in his business. He said that the overall quantity being sold has literally doubled in the year gone by. His company is on a launching spree of exclusive stores and that is allowing it to offer a wider range of eyewear which earlier was limited to only a few designs (sold through the shop-in-shop format). A data check suggests that the luxury segment in India is anyway growing at 20% CAGR, which validates my neighbour’s corroboration. Even as 60% malls are underperforming in India, the categories, which are missing exclusive retailing experiences, still have sufficient retailing ground in terms of footfalls and revenues.

Another neighbour who is a manager in a manufacturing company drives a compact, entry-level car and has a grown-up son who is yet to start earning. He recently purchased an ‘Enfield Bullet’ bike for him. Our conversation revealed to me how his son had been pestering for a specific brand. Enfield is a revived retro-bike brand, doing very well in India. He also told me how power bikes are a craze in his son’s friend circle. I found out later that, another fellow resident who also drives a compact Maruti Suzuki car had gone out of the way to purchase a ‘Yamaha Fazer’ bike for his son. In the Indian context, a USD 2000 bike is costly indulgence for an ordinary family (annual family income below USD 12,000). Motorcycle market is another promising market of India, growing at over 17% annually.

Bikes or bicycles with gears are a new aspiration for kids in the five to 15 age group, but only second to gaming. It is amazing to see bicycle stores coming up in the city selling kids’ bikes for upwards of Rs. 5000 going all the way up to few thousand dollars (not rupees).  A city kid who is just seven, is able to specifically mention the brand he wants to purchase  and also the accessories such as suspension, eighteen gears, pedal brakes etc.. ‘Gizmofication’ of their lives is being fuelled by TV shows  like Power Ranger and easy availability of computer games. PSP, Wii, PS2, PS3 etc. are now a part of common vocabulary. Walkman or iPod now no longer are the aspiration, and are probably becoming an accessory for the older generation. My son who went to meet his friend (both study in the 6th grade) was surprised to see his friend constantly busy with extra tuitions, while his father, constantly playing on PS3. Electronic malls like Tata Retail’s Croma , now stock many ‘odd gadgets’ apart from massagers which were earlier stuffed only with white goods and computers. Our own trend prediction ‘Hypershift’ calls for binding innovation to ‘activities’ rather than ‘single need’. For example, a chair is not to be designed only to ‘sit comfortably’ but for ‘muscle activity’ & ‘mind activity’ instead. Combining gadgets that track and reward your muscle activities while sitting, is one of the ideas many start-ups are working on, around the world.

 Mobility for working women in India 2011
LED revolution is happening around the world. As part of the on-going research at Onio, one of our teammates recently purchased an LED lamp, which took us by surprise. It was a Chinese product, resembling an ordinary LED retrofit bulb with a mode selector switch. During a power outage, this bulb can be shifted on battery mode and can operate for 8 hours. Priced around Rs. 200 (USD <5) apiece, it is a boon for what can be done with LED lights in India. Another friend of mine who lives in an upmarket gated community in Pune, changed the common lighting of his residential complex, into LED-based lighting, saving nearly half the electricity expense every month (nearly USD 6000 every year) besides of course saving natural resources. He said the ingenuous masterstroke was to retain the existing lighting fixtures and just make them LED adaptable through extra fitments. This saved a lot of replacement cost.

Trends have been usually understood in the ‘fashion design ‘parlance. Of late, I have started seeing business conferences around the world, including a session on Trends or Mega Trends, connecting them to business strategy. Onio has been organising ‘Insight India’ conferences since 2006. As we usher in another new year, I am looking forward to tie these tiny pearls of insights into a common thread of Megatrends, around the time when Pune Design Festival unfolds in Pune (tentatively around the first week of February 2012). Look out for Pune Design Festival – Trends to Business Strategy Workshop by Onio.