About INgene blog : First ever Indian Youth trend Insights blog

About INgene : First ever Indian Youth trend Insights blog:
This blog explores the detailed characteristics of Young-India and explains the finer & crucial differences they have with their global peers. The blog also establishes the theory of “adopted differentiation” (Copyright Kaustav SG,2007) and how the Indian & Inglodian youth are using this as a tool to differentiate themselves from the “aam aadmi” (mass population of India) to establish their new found identity.

The term youth refers to persons who are no longer children and not yet adults. Used colloquially, however the term generally refers to a broader, more ambiguous field of reference- from the physically adolescent to those in their late twenties.
Though superficially the youth all over the world exhibits similar [degree of] attitude, [traits of] interests & [deliverance of] opinion but a detailed observation reveals the finer differential characteristics which are crucial and often ignored while targeting this group as a valued consumer base. India is one of the youngest countries in the world with 60% of its population less then 24 years of age and is charted as the most prospective destination for the retail investment in the A. T. Kearney’s Global Retail Opportunity Report, 2007. With the first ever non-socialistic generation’s thriving aspiration & new found money power combined with steadily growing GDP, bubbling IT industry and increasing list of confident young entrepreneurs, the scenario appears very lucrative for the global and local retailers to target the “Youngisthan” (young-India). But, the secret remains in the understanding of the finer AIOs of this generation. The Indian youth segment roughly estimates close to 250million (between the ages of fifteen and twenty-five) and can be broadly divided (socio-psychologically) into three categories: the Bharatiyas, the Indians & the Inglodians (copyright Kaustav SG 2008). The Bharatiyas estimating 67% of the young population lives in the rural (R1, R2 to R4 SEC) areas with least influence of globalization, high traditional values. They are least economically privileged, most family oriented Bollywood influenced generation. The Indians constitute 31.5% (A, B,C, D & E SEC) and have moderate global influence. They are well aware of the global trends but rooted to the Indian family values, customs and ethos. The Inglodians are basically the creamy layers (A1,A SEC) and marginal (1.5% or roughly three million) in number though they are strongly growing (70% growth rate). Inglodians are affluent and consume most of the trendy & luxury items. They are internet savvy & the believers of global-village (a place where there is no difference between east & west, developing & developed countries etc.), highly influenced by the western music, food, fashion & culture yet Indian at heart.

Sunday, October 22, 2017

an open letter to Nike : perspective of an Indian

I was part of youth Research of Nike for sometime, as an external youth expert for a project.  “How can youth like white and black!” one of the top executives from the marketing team exclaimed during the consumer analysis meeting at Nike, Bangaluru office. We have conducted a deep dive study to understand the Indian youth psychographics towards sports and their perception on Nike, as a brand/ ideology/ product.  Also to test some of the products which Nike intended to launch in India. The result was not a stunner to me but for the Nike India team, I guess. The team wanted to launch a bright neon range of ‘fashionable’ sports shoes in India and most of the participants rejected them stating that the color appears “cheap” and not like “Nike”… they preferred Nike shoes and tees in white/ grey/ black, also suggested that Nike should bring in more serious sports shoes in Indian market from their global collection. In fact, the brand recall of Nike was very high in the category of sportswear. Though, many emphasized that they prefers to buy Nike from “abroad” rather than buying from India as the collection in Indian stores are not “updated” as per the global trend. The ‘counterfeits’ were also an issue and Nike design team did nothing much to ensure that their shoes are stunningly different (visually) than those fake Nike shoes sold in flea markets (ie. Sarojini Nagar, Palika Bazar, Varma Bazar, Chor market or Brigade Road). The price range of original Nike shoes / accessories/ tees available in India were much higher than the existing sports / sport-fashion brands and Nike was perceived as serious sportswear brand in India. Interestingly, when I tried to explain the team my theory of Adopted Differentiation and that Nike should try to remain as serious sports brand rather than competing with Puma or Adidas they thought it is just another ranting from an outsider! In other words, Nike research team tried to stereotype Indian Youth in the same frame of global youth!  Globally, Nike is sold to the middle class consumers and Nike presumed that is the right market for their product in India too (with much higher price point). Obviously, the middle class youth of Indian or Bharathiya psychographics were buying “similar looking Nike” shoes from flea market rather than Nike stores. I had a feeling that Nike was trying to presume that, may be, the sample selected (for the study) by me was wrong (though the list was verified by their research executive), or the analysis was not perfect. None of my suggestions were adopted and the paradox in Nike’s consumer segment appeared fatal for the business. I read that Nike's sales have fallen to Rs 764 crore in FY16 compared to Rs 803 crore in FY15 (data from Registrar of Companies). It’s loss widened to Rs 170 crore in 2015-16 compared to a loss of Rs 101 crore in 2-014-15. Further they have started closing their stores across India (35% stores closed already). In other hand, the German sportswear maker Puma, which follows a calendar year, showed accumulated profits of around Rs 47 crore for the year-ended December 2015.  Puma places their products as “fashionably sporty” products. In the article I have also read a quote as “I will prefer to buy Nike products abroad than in India simple reason being the do not bring their latest range to India! In my opinion they do not think Indian market is matured enough so no point being the latest products!”. This exactly resonates to what I have suggested them when Nike was trying to get a grip in Indian subcontinent. Nike’s youth-paradox is almost similar to Zara, India. Globally, Zara is one of the easy-to-reach fast-fashion brand targeting middle class fashion-forward youth market, but with higher price point in India, Zara gradually mutated into a higher segment pret line in this subcontinent through the décor of the store, their selective advertisement and conscious selection of product line. The store is predominantly in pastel shades, black and tones of grey (sans bright colors). The ambience appears posh and their stores are located in some of the best malls in India including Emporio Mall, Delhi. I wish, Nike, rather than spreading exponentially could have focused into becoming a serious sports brand for In’glo’dians who can afford the price for innovative highly R&D oriented product. Or, focus on more India specific grass-root innovation at an affordable price range (like Decathlon). 

In the article quoted above, Dave Thomas, Adidas Group India mentioned that “India is still not a fitness-oriented market, although it has great potential”. It’s funny on how someone tries to put the blame on client / “market” the moment they don’t succeed in a rate they presumes they should be! If India is not a “fitness-oriented” market then how come Decathlon is building huge shops across India and all of them are successfully running? Its turnover more than doubled in same period in the year 2013—from Rs.60 crore in December 2012 to Rs.128 crore for the year ended 31 December 2013. In a report published last year one must note that Decathlon has doubled the store count in India in the past 14 to 18 months. In May 2014, it had 13 stores. Stores in newer markets, such as Guwahati, were added this year, taking the store count to 24! What is the success mantra of Decathlon? They are focusing on “accessible sportwear/ sports goods” for the “youth minded” individuals. And the consumers in Decathlon’s store are indeed serious sportslovers. May be age-wise they are not teens or tweens. Most of the consumers in the store I have observed are 30+. As I have always stated, age doesn’t matter but the mindset, which unfortunately Nike failed to understand. Nike can never be a ‘fashionable brand’ neither can become an ‘affordable brand’. Indian youth who buys Nike are not the rappers, hiphoppers or follows any cult! They are serious, sweat loving 30+ ‘young at mind’ sports-lovers who wants to access an Original Nike shoe which will be uniquely made for India with global appeal.

Hence, these are few serious take away for Nike team:

1.       Consider India as a unique market and don’t stereotype the youth / sports. Research, analyse and then explore, don’t dump the products here and expect them to be bought
2.       Set target market right
3.       Don’t be judgemental and impose team’s idea on consumer, rather listen to them and spend time to design unique product for Indian market (as Decathlon did for Galli Cricket or Nokia did it in their initial years). Even if it’s a running shoe, the roads of every country are different!
4.       Expand Nike’s product range, make them at per global offering
5.       Fight against counterfeit by designing unique products which has visible difference from the fake

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