Srinivasan Raman, executive director of Hansa Research, charted out the growth story of India and the challenges posed due to the diversity at the event, 101 Markets 2012.
The third indicator to project India's growth story is the rising affluence. He explained that that there has been a change in the consumer classification system and the National Consumer Classification System has evolved and superseded the old SEC based on CWE's education and occupation. The new system comprises CWE's education and ownership/consumption of 11 product categories and is an indicator of socio-economic class as well as of affluence to a large extent (owing to inclusion of product ownership).
Raman added that another metric that gives a glimpse into the growth story is household premium-ness index (HPI). HPI is a more direct classifier of households than SEC and is a measure that explains consumption behaviour better than other classifiers. A set of 50 variables (including durables, FMCGs, services and demographics) is considered to arrive at this metric and the variables are given premium points based on their penetration (inverse relationship). The total score for a household is indexed to a maximum of 1000.
He said that such diversity presents an excellent growth opportunity, too. Raman explained the diversity using the case study of two villages - Sothgama (in Bihar) and NunaMajra (in Haryana). As far as infrastructure is concerned, Sothgama has electricity for just three hours a day, a medical shop run by a quack and just about a dozen shops selling consumer products. In comparison, NunaMajra has continuous supply of electricity, a dispensary with government doctors and recently got a grant worth Rs 6 crore for developmental purposes.
Comparing the two villages in terms of media and entertainment, Sothgama is media dark with no access to newspapers and TV. Radio and cinema are also negligible, with some youth watching movies counted as an exception. In NunaMajra, all media are present. Many houses in the village have access to DTH services and most schools have internet access.
Giving the example of product hierarchy, taking into consideration four product categories - colour TV, refrigerator, washing machine, car and air conditioner - Raman explained that research shows that 95 per cent of refrigerator owners own a colour TV, while 94 per cent of washing machine owners own a refrigerator and colour TV; and 79 per cent of car owners own all of the products (colour TV, refrigerator and washing machine).
This afaqs! event was presented by Zee Bangla.