MxMIndia

Tag: Abheek Singhi

  • Fuelled by domestic demand, hospitality will be $13 billion, with online hotels becoming a $4 billion market

    India’s domestic travel market to be US$48 billion by 2020, notes study

    By A Correspondent

     

    Google India, along with Boston Consulting Group (BCG), has released a comprehensive report on the growth opportunities in the Indian hospitality market over the next four years. The report titled, ‘Demystifying the Indian Online Traveler’ charts the decision making journey of the Indian traveler and provides insights on the potential growth opportunities for travel businesses till 2020.

     

    As per the report, Indian travel market is projected to grow at 11-11.5% to $48 billion by 2020 with the biggest contributor, air travel expected to grow at 15 per cent to $30 billion. Hotels will grow at 13 per cent to $13 billion by 2020 while railways will remain largely stagnant at $5 billion. Additionally, as more people come online, smartphone penetration improves and use of digital payments goes up, the report estimates that India’s online hotel market will grow to US$4 billion with 31 per cent penetration at a CAGR of 25 per cent.

     

    Speaking about the key findings of the report, Vikas Agnihotri, Industry Director, Google India said; “India’s domestic travel market is on an acceleration path. One of the key findings of the report is that by 2020, one in three hotel rooms will be booked online – a clear indicator of  the growing importance of digital in travel research, planning and booking. There are several actionable insights for domestic online travel players including the role of mobile and the level of curation and personalization that Indian travelers are looking for.”

     

    Demystifying the travel planning journey of the typical Indian consumer, the report shows that for a majority of Indian consumers a vacation is a well thought through event, the planning for which starts several weeks in advance. On average, travel consumers spend 49 minutes spread over 46 days, visiting as many as 17 different online touchpoints to plan, research and make a booking. However, it is interesting to note that the length of each online session is less than 3 minutes, due to the ubiquity of mobile. Through their journey, Indian travelers tend to flip back and forth across different online destinations, checking availability and comparing prices across different providers and connectivity.

     

    Talking about the opportunities for the online travel players, Abheek Singhi, Senior Partner and Asia Pacific Head of Consumer Practice, BCG said, “Travel is a high investment – both monetary and emotional – category. Technology has led to democratization of travel through better information and price discovery – and shall lead to 11-11.5% growth in years ahead. The question is “ how to address the 17 different touchpoints of three minutes each over 49 days!”

     

    Highlighting the purchase drivers, the report finds that there are several touch points in the consumer journey, including OTA (64 per cent reach), search engines (33 per cent reach) and Maps (26 per cent reach). Advocacy and word of mouth form an important input into the travel booking journey with 76 per cent of people gaining inspiration to travel from family and friends. Further, reviews and ratings from other users is the single most important criteria to select a certain booking channel. Finally, the research finds that consumers use a mix of online and offline sources of information during their booking journeys. However, only 12 per cent of the consumers prefer to use offline sources for research. 57 per cent of the consumers believe that online channels give them better deals while 41 per cent find it more convenient for them to book online.

     

    The consumer research for the report is based on consumer travel journeys across omnichannel pathway. GfK recruited consumers who were planning to book an accommodation for a domestic trip. An integrated methodology was used to capture both online and offline search behaviour. Online behaviour captured via Passive meter tracking app (GfK Leotrace (TM)) installed in the smartphones of 18-45 year olds who were travelling for domestic leisure/ business travel in  a two month period. These respondents were Android users spread across three cities – Delhi, Hyderabad & Ahmedabad and were regular internet users who had booked at least one flight past one year, online. The offline behaviour was captured through bi-weekly diaries and a face to face interview towards the end of the tracking period. The data of eight weeks of usage was captured for 256 intending travellers between Nov’16 – Jan’17.

     

  • By 2020, close to 150 million consumers are expected to be digitally influenced in FMCG and these digital consumers alone would spend about $40 billion on FMCG categories, says the national FMCG summit report released by BCG and CII

    Demographic shifts, ecommerce, digital space to reshape FMCG: BCG

    By Ratna Bhushan

     

    Over the next decade, India is expected to see a 70% increase in income levels, leading to the emergence of a new middle class, urbanisation and emergence of new cities, with about 100 million being added to the workforce, a study by the Boston Consulting Group (BCG) and CII predicts. The combined impact of these demographic shifts, along with the emergence of new channels like ecommerce, proliferation of Internet connectivity and consumption of digital media, will reshape the FMCG sector, it forecasts.

     

    By 2020, close to 150 million consumers are expected to be digitally influenced in FMCG and these digital consumers alone would spend about $40 billion on FMCG categories, says the national FMCG summit report released by BCG and CII on Monday.

     

    “FMCG has to be re-imagined for a future world, owing to the varied changes and opportunities seen in this sector,” the report quoted PepsiCo India Chairman and CEO D Shivakumar as saying.

     

    BCG Senior Partner and Director Abheek Singhi said though the growth opportunity provided by this shift would be massive, the shape of it would be very different in the future. “We expect greater premiumisation, tier 2-4 towns to be the drivers of growth. The impact of digital would be profound.”

     

    The report, ‘Re-imagining FMCG in India’, assesses the impact of these trends and imperatives for consumer goods firms.

     

    According to the report, households with less than Rs 10 lakh annual income would account for close to 50% of the spending in the category, which would lead to premiumisation across categories – from unbranded to branded and “luxuriating” of products.

     

    While the digital space is attracting a lot of private equity and venture capital funding, most firms are unclear on the opportunity. The report suggests that FMCG companies need to examine how they can use digital to disrupt the way they do business.

     

    “The single most important challenge will be multiple usage of channels by shoppers and consumers,” Nestle Chairman and Managing Director Suresh Narayanan said in the report. “Ecommerce platforms will jostle for share of wallet traditionally going to unorganised and organised trade banners.”

     

  • By 2020, consumption will reach $3.6 trillion, as new generation hits its prime spending years, according to a recent CII-BCG report

    Rejoice! Consumer spending in India poised for explosive growth, says CII-BCG report

    By A Correspondent

     

    The Boston Consulting Group (BCG) and The Confederation of Indian Industry (CII) jointly released a study titled The Tiger Roars: An In-Depth Analysis of How A Billion-Plus People Consume. “This report examines the shape and size of the consumption expenditure of India , and its expected evolution over the next decade, in detail. While India’s robust consumption growth presents attractive opportunities for companies, its unique diversity and variety makes it a challenge to capture these opportunities. This report presents a framework and approach on how to de-average the opportunity to better segment consumers and effectively understand their buying preferences,” said Abheek Singhi, Leader of the Consumer & Retail Practices, BCG India and co-author of the report.

     

    Buoyed by the rising household income, coming-of-age of a new generation, and other socio-economic forces, overall consumer spending in India is likely to expand 3.6 times-from $991 billion in 2010 to $3.6 trillion by 2020. The projected 14 per cent growth rate is much faster than the anticipated annual global growth of 5.5 per cent-and even faster than the anticipated growth of 9 per cent in emerging economies. By 2020, India will constitute 5.8 per cent of global consumption – more than double the 2.7 per cent it now represents.

     

    Despite the current global economic environment, India continues to march along a robust growth path. With the recent regulatory changes, increasing consumption levels and changing consumer preferences, the FMCG and retail sectors are standing at the point of inflexion,” said Amitabh Mall, Partner & Director, BCG India .

     

    India has billion-plus consumers spanning all income segments. The income pyramid is real but does only a partial job of explaining consumer attitude and behaviour. This report provides a definitive view of the income segmentation and more importantly uses other parameters of location, education and occupation to define the seven segments in India :

    • Professional Affluent (2 per cent of households)
    • Traditional Affluent (4 per cent of households)
    • Urban Aspirers (8 per cent of households)
    • Rural Aspirers (6 per cent of households)
    • Large Town Next Billion (6 per cent of households)
    • SmallTownand Rural Next Billion (24 per cent of households)
    • Strugglers (50 per cent of households)

     

    Food, housing & consumer durables and transport & communication are expected to be the Top 3 categories, accounting for 65 per cent of consumption in 2020. The Professional Affluents are expected to dominate consumption in 2020, accounting for 26 per cent of total consumption expenditure, up from 16 per cent in 2010. By contrast, spending by struggler households will decline from 26 per cent in 2010 to 11 per cent in 2020.

     

    “The roar of the Tiger is a fitting metaphor for consumer spending in India . Consumer spending in India will continue to roar, but the companies that try to capture it may not be so fortunate. India is a big and growing consumer market, but not an easy one. Understanding the size and shape of the prize and where it is hidden in the challenging fabric of India are the first steps to capturing it,” concluded Mr Singhi.

     

  • Asian women are different from women across the globe and so are their buying habits. The session ‘Marketing to Women Consumers in Asia’ emphasized the importance of marketing to women, which is often ignored.

    AdAsia: Why market to women consumers?

    By Akash Raha

    Does being a man or a woman define shopping habits? Moreover, are Asian women different from women across the globe and hence, are their buying habits different? The session ‘Marketing to Women Consumers in Asia’, discussing these and other points, examined typical traits of the Asian woman consumer. The speakers at this session were Abheek Singhi, BCG India and Yeonhee Kim, BCG Korea.

    The speakers talked about the significant political and financial changes that are happening around the globe, and women are not alienated from these changes. As a matter of fact, significant changes are happening in the behavioural aspects of women in general and women consumers per se. Research by BCG on women consumers, the speakers noted, has highlighted the necessity of marketing to women consumers. Apart from the revolution that we see around the globe, they said, a revolution is happening with women too. With the change of time, the aspirations and wants of women have changed too. According to the study, women are showing their dissatisfaction and are not happy with what they are getting.

    Women around the globe work, and share their household responsibilities with their spouses, but the case is a little different in Asia where they are entrusted with the bulk of the household chores. The chief challenge for women is Asia today therefore is the challenge of time. There is too much demand on time and too much to do. All this compounded by responsibility for the vast majority of household chores. The cultural DNA of Asian women is such that they perform a bulk of the household work far more than in western countries. On a graph, the speakers showed how the happiness and stress level follow a ‘V’ curve for women in Asia where the troughs are quite low.

    Yet, women remain a very important segment in terms of spends per year, albeit ignored by marketers. Women control US$12 trillion of annual discretionary spends which is two-thirds of the total pie. And if women are seriously dissatisfied with what is on offer, it is essential to innovate for them. But relevant significant products are more important to women consumers than mere innovation. Hence the mix should be of innovation and significance (value for money spend). Women consumers are more conscious of the price that they are paying and the value they get for it. Considering the amount of money that exchange hands from this segment, it is but ironical, pointed out the speakers, that marketers aren’t focusing on them enough.

    That said, it would be a fallacy to generalize, and moreover generalize about all Asian women. There is no one Asian woman but multitudes of them. And marketers will have to cater to them separately. A one-size-fits-all strategy will not work. But there are some of the features in Asian women that remain same upon which marketers can look into. The challenge of time is their main constraint. Yet, Asian women are optimistic about their future, community, life, family and country. In Asian countries, women are comparatively more dependent on their spouses (in terms of money) as compared to global figures. Even in Asia, there are so many countries with so many different ethnicities, motivation, per capita income, GDP etc. The one point remains, that women in general have a high quotient of influencing buy. Hence it is important that they are kept in mind while planning a marketing strategy. Moreover, the psyche of woman in each of the Asian countries have to be researched upon to truly understand how, what and when they buy and then these research data can then be leveraged upon.