Urbanisation and Changing Consumer Behaviour : THE INDIAN STORY

Introduction

With the advent of LPG (Liberalization, Privatisation, Globalization) in India post 1990, over the past few decades there has been a significant rise in urbanization. From being a modest 20% of the total population in the mid 90’s, in today’s date urban areas represent 35% of India’s population. Apart from changing lifestyles and working styles urbanisation has led to growth in organized retail sector, this in turn has led to change in consumer buying behavior habits. In particular the decision making process before buying something has been significantly affected. Many recent researches conducted indicate towards the fact that people prefer to do online shopping more as compared to visiting shopping malls and so on, apart from this buying as a result of celebrity endorsements, expensive brands being an indication of quality and so on are many different changes in consumer behavior as a result of growing urbanisation.

Picture7Picture8

New and emerging trends in consumer buying behaviour

Rise in online shopping:

As a result of fast paced life in urban areas people hardly get time for shopping activities, this in turn has led to the growth of e-commerce in India. Researchers indicate that there will be a 67% increase in value from $23bn in 2015 to $38bn in 2016. One of the major reasons behind more and more people shopping online is that it is safe, easy and quick way to shop. Moreover companies like Flipkart, Amazon India, Snapdeal and so on offer not just attractive discounts but option of exchange or replacement of the product at fraction of a cost. This and assured guarantee of products which are sold by these companies have led to the increase in e-commerce in India

Picture6

(http://www.pwc.in/assets/pdfs/publications/2015/ecommerce-in-india-accelerating-growth.pdf)  Follow the link for more information

 

Quality comes first over price

With the rise in urbanization and as a result of lot of multinationals from abroad starting operations in India has lead to on average per capita increasing. This in a way has led to people having more additional disposable income as compared to before. Under the circumstance no longer do Indian consumer’s focus on cost, rather their mindset has transformed whereby now they view price as an indication of quality. Many international brands have forayed into the Indian market, this along with people shopping more and more from malls rather than local outlet’s has led to people believing that higher the price the better the quality.

Picture8Picture4

(A typical shopping mall in India offering a mix of local and international high end brands)

 

Sale is no longer a source of selling defective products but a blessing

Till the late 1990’s consumer’s in India avoided going for sale because of the mindset that they would be sold defective products in the name of 50-80% discount. With the rise in competition and many players operating in different sector’s, companies are wary of their image and carry out sale time and again in order to attract more and more customers. For example high end local player’s operating in clothing and accessories segment like Peter England, Louis Phillipe (Local) etc & Arrow, Levi Strauss (International) carry out sale time and again in order to clear their stock or to attract more and more customers.

Picture3

Getting influenced to buy as a result of celebrity endorsement

With visual media becoming more and more popular people tend to associate themselves more and more with celebrities in real life. Under the circumstance many organizations are turning to celebrity endorsement as an effective marketing and sales strategy in India. Under the circumstance more and more people in urban areas (which have better connectivity) are opting to buy products because a particular celebrity endorsing the product.

Picture2Picture1

Conclusion

It can be concluded overall that as a result of urbanization and rising disposable income of people, the behavior of consumers has changed drastically over the last few decades. Rapid rise in organized retail, rising competition levels in different sectors, fast paced life leading to people having less tome for themselves are some of the reasons behind this phenomenon.

References

Joseph, S. Singh, V. (2013). Changing lifestyle influencing Indian customers: Conceptualizing and identifying future directions . Global journal of management and business studies. 3 (8), 861-866.

Kumari, P. (2012). Changing purchase behavior of Indian customers. Journal of economics and management. Vol 1 (8), 36-40.

Sama, R. (2014). A study on buying behavior of Indian customer’s: A dynamic view. International multidisciplinary Research journal. 1 (4), 27-45.

Sinha, D (2011). Consumer India: Inside the Indian mind and wallet. Singapore: John wiley and sons. 57-73.

Insights. (2014). Urbanization in India: Facts & Issues. Available: http://www.insightsonindia.com/2014/10/29/urbanization-in-india-facts-and-issues/. Last accessed 28th March 2016.

Ladda, S. (2015). ecommerce in India accelerating growth. Available: http://www.pwc.in/assets/pdfs/publications/2015/ecommerce-in-india-accelerating-growth.pdf. Last accessed 28th March 2016.

World bank . (2015). Indian cities can take more advantage of urbanization for economic growth. Available: http://www.worldbank.org/en/news/press-release/2015/09/24/indian-cities-can-take-more-advantage-urbanization-for-economic-growth. Last accessed 28th March 2016.

 

NAME: PRASHANT YADAV

STUDENT ID: 215234629

USER NAME :prashantyadav47

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s