Small is Big in India

India is complex market to understand. What works elsewhere not necessarily work in India.  Kellogs and KFC are just some of the examples. Then what works here? Shampoo sachet, Nokia1100, Subhiska super market, tier II and tier III cities. What is common among the all? All these are small.

Shampoo sachet was introduced in Indian market to capture the party pack market. People in India do not shampoo every day. It is used on occasions or week ends. So buying 60 ml pack of shampoo for Rs. 70 is definitely not wise decision for a consumer to make. The solution came in the form of sachet. There was always a demand for shampoo; there was a need for that demand to be exploited by removing the bottlenecks that prevented this demand to be visible. What worked in this case was small. Now there is huge market for these products. Consumption of shampoo has gone up by almost 25 % after the introduction of the sachet. Same case is with some other products like Rasna, smaller chocolates, tooth pastes etc.

As far as low priced products are concerned; there are lots of success stories e.g. Nokia 1100, Deccan airways (now Kingfisher Red), Reliance cellular services and many more. Most of these products and services are very successful due to the lower pricing strategy. As far as core benefits are concerned there is no compromise at consumer end but giving up additional benefits at additional price was acceptable. Again what worked was small in this case it was price.

Marketers today are talking about rural market, tier II and tier III cities. The next destination for corporate India is rural India. Even today 65% of India stays in Rural India.

Same case is with the smaller formats in retail. When we compare various retail format (Supermarket, Departmental Store, Exclusive Showrooms, Hypermarkets) in India with that of international counterparts we notice one major difference and that of size. e.g. average size of hypermarket in Europe or US is about 200,000 sq. ft. whereas average size of hypermarket in India is 85,000 sq. ft. This again proves the hypothesis that what works in India is small.

A marketer needs to understand one thing that “Small is big in India”