GSK, Nestle, Coca-Cola & Dabur top up effort to tap rural consumers

New Delhi: Consumer product makers such as GlaxoSmithKline, Nestle, Coca-Cola, PepsiCo, Hindustan Unilever, Marico, Godrej and Dabur are rushing to the bottom-of-the-pyramid market with custom-made products six years after management guru CK Prahalad said consumers with incomes less than $2 a day can be a profitable segment for marketers.
Estimated at close to 350 million, the bottom-of-pyramid (BOP) consumer segment is the biggest and perhaps the fastest growing in the country with about 40 million families making the jump from poverty to the BOP club every year. Marketers are no longer only betting on smaller packs of existing products to tap the fortune at the bottom of the pyramid; they are also looking to roll out products specially made for the poor.
GlaxoSmithKline Consumer Healthcare (GSKCH), foods company Nestle and beverage maker Coca-Cola have already entered the market with products created for BOP consumers, while PepsiCo is set to follow suit. Others such as Hindustan Unilever, Marico, Godrej Consumer Products and Dabur too are learnt to be working on products for the BOP segment.
GlaxoSmithKline is rolling out Asha — a milk food drink from Horlicks for rural consumers — in Andhra Pradesh; Nestle is promoting Maggi noodles at Rs 4 and Maggi seasoning at Rs 2 for low-income group consumers beginning with Mumbai’s Dharavi slum; Coca-Cola has begun selling a powder-based beverage called Vitingo at Rs 2.50 per sachet across villages in Orissa; and PepsiCo’s global chairman & CEO Indra Nooyi has announced that the company is working on a beverage or snack priced between Re 1 and Rs 5 for people ailing from malnutrition and deficiencies.
GlaxoSmithKline’s Asha, which is 40% cheaper than the regular variant of Horlicks, is the first product from the UK-based MNC designed for rural consumers. “Alongside, we are building a robust go-to-market model to ensure the products reach the right consumers because it’s not enough just to have the right products,” Zubair Ahmed, managing director of GlaxoSmithKline, said.
The company will continue to identify and bridge need gaps for bottom-of-the-pyramid consumers, particularly in terms of nutrition products and their availability, he added. About three weeks ago, the Indian arm of Swiss foods company Nestle introduced low-priced fortified meals under its flagship Maggi instant noodles brand.
Shivani Hegde, general manager (foods) at Nestle India, said addressing micronutrient malnutrition was a challenge for the country. Ms Hegde said Nestle would provide nutrition education to the base of the pyramid and was launching its first such programme at Dharavi slums in Mumbai.
Coca-Cola’s Vitingo — a fortified beverage in 18-gm sachets at Rs 2.50 each — is again a first for the beverage maker. “Buoyed by the success of the pilot project for Vitingo in Sambalpur, Orissa last year, the project is now being scaled up to 30 districts of Orissa,” a Coca-Cola India spokesperson said. The company has tied up with NGO and micro finance institution BISWA in Orissa for the same.
Economists, meanwhile, say companies cannot afford to paint all bottom-of-the-pyramid consumers with the same brush. “The potential at the bottom of the pyramid is immense, but companies will need to understand consumer spending patterns carefully,” says Dr Rajesh Shukla, senior fellow at the National Council for Applied Economic Research (NCAER).
But for now, with the likes of HUL, Godrej Consumer Products, Marico and Dabur set to join the race, the poor in the country may soon have something to smile about.

Hyundai unveils i10 Electric ,The electric version of the compact car.

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Expecting more customers is what Hyundai had stated while signing the MoU with Indian Bank and so it seems that while trying to impress those potential customers’ needs they have unveiled the electric version of the i10. Termed as a zero-emission urban commuter vehicle, the hatchback from the Korean company consists of a 49kWh electrical motor and a 16kWh battery, incorporating Li-Poly batteries producing the same power while weighing less and being more efficient when compared to NiMH batteries. Charging the battery pack will take five hours from a 220V outlet but if you plug it into a 413V outlet it charges up to 85% in fifteen minutes. The driving range is said to be 160 km with a 130kmph top speed.   Here is the Press Release: New Delhi, January 06, 2010: Hyundai Motor India Ltd, the country’s largest car exporter and second largest car manufacturer, today unveiled the electric version of the immensely popular compact car - i10 at Auto Expo 2010 in New Delhi. Considered as a breakthrough in the alternate fuel vehicle segment, the i10 electric ushers in a new era of mobility – a zero-emission  urban commuter vehicle. The i10 Electric made its world debut at the Frankfurt Motor Show in September, 2009. Slated for a limited series production run in 2010 in the home market of Hyundai - South Korea, the all new i10 Electric is an embodiment of Hyundai’s radical, transformative vision for the future and the culmination of decades of investment in research and development.   Key Characteristics of  Hyundai i10 Electric   •      Zero Emission •      Low Kerb weight (1000Kg) •      Driving range of 160 km on a single charge •      Highly efficient LiPoly Battery •      Easy for urban commuting  On the occasion, Arvind Saxena, Director (Marketing & Sales), HMIL, said, “A growing awareness amongst consumers for all things green inspired us to introduce the electric version of our immensely popular compact car – i10.  It is truly a real-world car with zero emissions, and the unveiling today, marks the first step in what is sure to be an exciting journey - for people all over the world, for Hyundai and for the industry. We hope that the heightened interest in electric vehicles will present us with a huge opportunity to bring in EV technology to the Indian market in the near future.”

India ranks second in consumer confidence index

New Delhi: India ranks second with 117 points in consumer confidence in the fourth quarter of 2009, according to the Nielsen Global Consumer Confidence survey. The survey results indicate that the recovery from the global economic downturn is faster in India as compared with other countries in the world.
Further, the survey also points that countries with higher willingness to spend are showing better signs of revival. Indonesia tops the survey with 119 points with Hong Kong, China, Singapore and Brazil also showing accelerated recovery.
The survey highlights that eight of the top 10 most confident markets were from Asia Pacific in the fourth quarter of 2009. The survey also revealed that Indians are most optimistic about job prospects in 2010. 83 percent of the Indian consumers expect things to improve in 2010. India is followed by Indonesia at 70 percent.

The Retail Promise

What does the next decade hold for retailing in India? With the economy expected to deliver around 8 per cent growth for the next many years, the domestic retail market is likely to more than double and probably hit the $900-1,000-billion mark by 2020.

As we enter 2010, we already have some of the country's and the world's biggest businesses engaged in retail activity. These include Tata, Birla, Ambani, Bharti, Essar, Mahindra & Mahindra, and RPG in addition to exceptional entrepreneurs that have successful ventures in Future Group, Shoppers Stop, Landmark (Dubai) and others. If the current decade has turned out to be a decade of slower, but steady, evolution of modern retailing in India, the next decade will finally see a revolutionary change that will undoubtedly make a very visible impact on the, by then, 1.3-billion strong India in 2020.

The hard sellers

Pantaloon retail: They changed the way Indians shop by providing air-conditioned comfort at kirana pricing under one roof.It has over 13 million sq ft retail space covering 1,000 stores. Pantaloon India Retail has a turnover of Rs 6,342 crore.Big Bazaar is 60 per cent of that.

Tata:The group has a significant presence in retail under different brands: Trent and Star Bazaar (its hypermarket stores),Westside for lifestyle retail, Landmark for books and music and Titan for watches and sunglasses.

Reliance retail: Despite being a late entrant in retail, Reliance has managed to set up 700-odd stores, including those of Reliance Fresh and Reliance Mart.

The mobile store: The Essar Group-owned chain is the big daddy in mobile retail with 1,400 stores across the country.It is planning to double its network to around 2,500 stores by March 2012 and launching its own mobile phones soon.

RPG: Perhaps one of the oldest groups in the retail business in the country,the RPG group has Spencer's Retail,a multiformat retail format with 250 stores, Music World and Books & Beyond.

Spin-offs

Products of commerce

Malls: They have sparked off a consumption boom, whether it is fashion or eating out.From just three malls in 2002,the country has about 120-odd malls at present. Going by a study,another 300 malls will be added by next year.

Parking management: With the arrivals of malls came vehicle parking. It is estimated to be a Rs 300-crore business.

TeleShopping: Peddles too-good-to-be-true products.Aired late at night, the market is estimated to be worth more than Rs 250 crore.

Mall rats: India's BPO boom spawned a generation of mall rats who,with their upwardly mobile lifestyles and high spending power,hung around the malls over the weekends burning plastic.

Retail therapy: Shopping always helps lift the spirits. Truly therapeutic.

Plastic money: Credit card usage spiked with the entry of malls and organised retail. There are over 160 million debit and credit card holders in India today.  

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