'Rich and affluent are concentrated in the metros and only cheap products sell in the non-metro towns and cities'; this has been the mentality towards non-metros for several decades, and was even followed by brands till sometimes ago. Whether this was a myth or not, does not matter anymore because the widely accepted fact today is that the next level of growth for the Indian economy is bound to come from Tier 2, 3 and 4 cities and towns, which were relatively untapped, barring the FMCG sector.
Be it insurance, automobile, telecom, e-commerce, health or any other sector, all have realised that people in these Unmetros have deep pockets to afford any product or service, have aspirations like their counterparts in metros and access to knowledge through internet. The brands have understood that non-metros go for value for money and they need to customise their products and communications accordingly for the target market.
Manish Kalra, marketing head, Makemytrip.com cited an example of customising the portal's services where it once sent a Gujarati cook with an Ahmedabad-based group travelling to Europe as it had requested for Gujarati food throughout the trip. "The non-metro customer today demands the same luxury packages such as spas, five stars and international vacations that any of his affluent metro counterparts demand. We often come out with local language banners and customised products for different markets. With internet at their disposal, people have access to knowledge and research well before purchasing our products," he said.
"A larger part of our non-metro consumer resides in the towns with populations of 1 lakh-10 lakh. They research well before purchasing the product and their profiles suggest that they are growing well and have enough disposable income at their hand. Among these customers, there is a huge chunk, which is connecting with us through mobile phones and to tap these people, we constantly design products that suit the needs of our customer," added Kalra.
The private insurance sector that began operations nearly a decade ago has realised that its acceptance in the non-metros is much more than metros. Today, 60-65 per cent of their business comes from these areas. Rituraj Bhattacharya, head, market management and product development, Bajaj Allianz Life Insurance, said, "The story of evolution in these markets has been difficult. We are now offering them what we offer people in metros. Trust is the key to success in these markets and people here are open to talk and learn about new things."
In the telecom sector, non-metros have contributed to a phenomenal growth. In the last many years, metros have seen just 4-5 per cent growth, while the non-metros have witnessed nearly 14 per cent growth. Keshhav Tiwari, executive director, Voice Business, MTS India, said, "People are ready to shell out for their comfort. Affordability is no longer an issue for them. You serve them with a product that suits their need, they do not hesitate to buy it."
Chirantan Chandran, senior principal partner, north and east, Dentsu, who was the moderator at the panel, cited a Nielsen-CII report that points five reasons for the change in non-metros - increasing awareness for education; health and wellness; growing need for personal grooming; improving hygiene; and increasingly eating out and experimenting with food.
On the communication side, all the marketers at the panel agreed that BTL and digital works the best for the non-metros. It creates a higher buzz and recall as compared to the metros but only if it is thoughtful and well executed. Kalra added that social media will play a very big role in uplifting these markets.
The biggest challenge for brands, however, lies in the consumer data, said the panel. There is no data available for the non-metros through which brands can start segmentation of the audience and keep track of brand engagement. Marketers find it difficult to identify customer behaviour and analyse patterns. They urged for more focused data to enable better segmentation and thus, customised products for the consumers in the non metros.