ET World Leaders Forum: Our complex consumers are clear on aspirations, conscious of value & uncompromising on quality, say panelists

The new Indian consumer is aspirational, yet price conscious; diverse, yet unified in their expectations. They all want premium homes, cars, food, and hotels, but in an ardently value conscious manner. These were the key takeaways of a power-packed discussion on The New India Blueprint: Cities, Consumers, and the Business of Aspiration. The core theme was how India's aspirational economy is focused on the demand for premiumisation and superior experiences, but for products and services that offer value and differentiation, across pin codes and well beyond metro limits.

The eclectic set of panellists included IHCL MD and CEO Puneet Chhatwal, Mercedes-Benz India MD and CEO Santosh Iyer, Amul MD Jayen Mehta, and Casagrand founder and MD Arun Mn. They discussed the forces shaping the of the Indian consumers' evolution in the session moderated by ET's Sonali Krishna.

"There is an aspirational customer who likes to spend, who has gone beyond 'you only live once'. But at the same time, is very value driven," said Indian Hotels Company Limited (IHCL)'s Chhatwal. Noting that Indian consumers are becoming increasingly quality-conscious, Chhatwal said "Poor quality and lack of service is something Indian consumers won't tolerate. Whether it's servicing the community, which is also a part of aspiration and premiumisation when they build a thousand units, or the quality of meal which was not good, and we have to either refund the money, or invite the customer back, or any such thing. So, the price-value relationship has become very, very strong."


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Adding that Taj Hotels is perhaps "the only brand from India that's going from strength to strength", Chhatwal said: "There is a huge opportunity we are witnessing that we've not witnessed in last five years. If you look at results announced by all listed companies, hospitality is one sector where capex from private sources is possibly the highest - and that is being spent in building hotels in tier-II, -III cities, new airports - you name it and you get it."

Defining the complexity of the Indian consumer through one lens is an unrewarding task. As a panellist quipped, this "may differ by state, city, street and even households".

"More and more, the consumer in India is changing to value-led purchases, and brands have to demonstrate that much more now, as well as in the future," luxury car maker Mercedes-Benz India's Iyer noted. "The tolerance for poor quality that does not equate with the price has gone... the assumption that growth will happen despite the tailwinds is not right. Experience will be the core," Iyer said. "Time, for luxury customers, is becoming an even bigger monetisation opportunity. They are ready to spend more to airlift a car because they want it early."

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"Affordability is a very important aspect in the housing space. Every stratum of the segment has become very, very aspirational," said Arun Mn of premium residential and real estate developer Casagrand.

"Consumers are now well travelled, well exposed and their expectations are higher. Builders have stopped looking for homes in terms of square feet or as a commodity. A builder today looks at giving a lifestyle, like sports facilities, wellness facilities, children's safety and elderly care. We are giving a village by itself."

The paradox of aspirational demand in consumers freighted with value consciousness is a key insight for businesses.

"Even a 5% annual shift from loose to packaged and branded dairy could bring around 3.5 crore litres a day into the formal sector," said Jayen Mehta of dairy maker Amul India, dwelling on the massive opportunity India offers to consumers on the world stage. "The shift towards premium is happening; one cannot deny that. However, we also must look at the bottom of the pyramid. It's very difficult to get a mindset changed from loose to packaged milk, but it is easier to sell proteins. It's also getting easier to sell integrated wellness concepts," Mehta said.

"You can add one Amul to India every year. That is the kind of opportunity we sense," he added.

The overriding theme of India's new consumers is clear: businesses cannot capture buying patterns of 1.4 billion consumers in one snapshot. Brands need to rapidly adapt to offer them value - whether it's nutrition, wellness and trust when it comes to packaged foods, better experiences in hospitality and residences, or cars that offer quality and value blended with aspiration.