| BUSINESSWEEK ONLINE : OCTOBER 11, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
'We Want to Grab the Funky Market' (int'l edition) As India's young people embrace consumerism, companies are pitching straight to them Anand Mahindra remembers when his parents bought a new car back in the 1950s. There were just two models to choose from: the boxy Ambassador made by Morris Oxford and the equally stolid Fiat. The waiting list took six years, and customers took whatever color rolled off the assembly line that month. Now, as managing director of Indian auto maker Mahindra & Mahindra, Anand Mahindra, 44, is helping usher in a degree of choice that would have been unimaginable in India just a decade ago. In November, Mahindra will launch car-buying via the Internet. It's not just a question of punching in an order. Customers will be able to use software to add mag wheels or racing stripes and create their own customized versions of the new Quadro, a sport-utility vehicle. Mahindra is targeting young drivers for the $10,500 car, buying slick advertising spots on video music channels. ''We want to grab the funky market,'' he says. ''Kids persuade their parents what car to buy. They determine style and fashion today.'' That's a reality marketers in India are increasingly waking up to, as demographic trends push the number of young consumers higher every year. And unlike their parents, this computer-savvy generation has no qualms about consumerism. Thanks to cable television and the Internet, they are aspiring to a life far from India's austere socialist past. With total spending power of about $6.5 billion--their own discretionary income plus what their families spend on them--they carry considerable economic clout, as well as the power to influence their parents' purchasing decisions on items ranging from computers and cars to watches and TVs. Indian teens alone buy nearly 60% of the fizzy drinks, chocolates, and jeans sold in India. ''Every company is planning its future growth looking at the youth market,'' says Ajit Balakrishnan, founder of India's top-ranked Internet portal, Rediff.com. As a result, retailers are changing how they market to this group. They are turning to hipper advertising and product lines. In addition, companies competing to hire the best and brightest find they need to lure young graduates as employees by offering career paths to overseas posts. Multinationals, with their broad range of experience, lead the pack. Cadbury (CSG), Coca-Cola (KO), and Pepsi (PEP) are leaders. All three companies are using famous actors, sports figures, and catchy slogans to woo youth. Pepsi's advertising slogan in India, ''Yeh Dil Maange More,'' or ''This Heart Demands More,'' has become a catchphrase of India's young. When Indian soldiers recaptured a Himalayan mountain peak from Pakistan in the recent military conflict in Kashmir, a 26-year-old captain who led the team sent a coded message to his superiors, urging them to let them capture more peaks: ''Yeh Dil Maange More,'' it read. Old-line Indian family-owned companies are also increasingly catering to the youth market. Changing buying patterns--in which teens are no longer content to have their father's hand-me-down watch and instead want to buy their own--are part of the reason. But in many cases, the helm of the company has been passed down a generation, and younger CEOs are more hip. Take stodgy Bajaj Auto Ltd., the world's second-largest scooter maker, based in Pune. Since Rajiv Bajaj, 32, son of owner Rahul Bajaj, joined the family business as vice-president for product development, Bajaj scooters have changed from value-for-money vehicles targeted at the middle-class male to scooters with style and performance catering to youths of both genders. Hence the new, zippy Spirit, Bravo, and Legend scooters, which hit the market in quick succession in the past year, aimed at 18-to-24 year olds. Ditto at New Delhi-based Liberty Shoes Ltd., started in 1944 by two brothers who fought against British rule. Now it's run by two of their grandsons, Adarsh Gupta, 38, and Anupam Bansal, 25, both of whom apprenticed in Italy. ''This generation wants change very fast,'' says Gupta. Liberty makes 50,000 pairs of shoes per day, mostly for the youth market, and has 10 brands with 20 different styles each. Liberty sneakers go head-to-head with Nike and Reebok but sell for far less. Its line of sporty sandals and beach shoes, called Gliders, is targeted at teens. And with new models every three months, Gliders are Liberty's hottest sellers, at 6 million pairs annually. Western fashion imports are also helping local companies. Ruff 'n' Tuff Jeans, a division of Arvind Mills based in Ahmadabad, is India's largest casual-wear brand. By making Western styles widely available, ''we took the inhibition of jean-wearing away from the cities,'' says manager Govind Mirchandani. ''We demystified it.'' Companies are also working to win the hearts of young potential employees. To recruit the best talent, premier software developers, including Infosys Technologies Ltd. (INFY) and Tata Consultancy Services, are offering stock options, flexible working hours, foreign assignments, and even education packages to overseas universities--and perks such as housing and auto loans. Infosys is also working to increase computer literacy in hopes of fostering more talent nationwide, offering free computer-training programs in urban and rural schools. ''HOW FAST?'' Companies such as Hindustan Lever Ltd. and Cadbury, which were tops on campus recruitment until high-tech companies came along, offer similar bonuses to smart young MBAs. Jay Desai of Universal Consulting in Bombay says that although small, family-owned Indian companies are the mainstay of his business, he takes on clients from Dubai and Singapore in order to keep bright young consultants from leaving for multinational companies that can offer a more whirlwind experience. Observes Deepak Jolly, vice-president of Pepsi India: ''Young management graduates of 22 say, 'How fast can we rise?' They are very demanding.'' India's younger, globally oriented workforce is luring more multinational business to India. GE Capital Service Inc. (GE) plans to make India its biggest remote call-service center, tranferring much of its U.S. back-office operations. It is hiring an average of 100 young, technology-literate Indians a week, and has plans to become an 8,000-strong operation within a year. But India's young people aren't just computer nerds. They play hard, too. Bowling alleys, pool parlors, and cybercafes are booming across India. Youngsters cough up $7.50 an hour for a bowling game, and skip school to surf the Net at cybercafes at 75 cents an hour. ''Now, Indian kids are getting what we could only read about in American comic books,'' says Aditya Singh, CEO of Bombay's Bowling Co. ''They are waking up to consumerism.'' And how. By Manjeet Kripalani in Bombay _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS India's Youth (int'l edition) COVER IMAGE: India's Youth TABLE: How India's New Generation Is Different ``We Want to Grab the Funky Market'' (int'l edition) PHOTO: Ad for Liberty's Gliders Shoes TABLE: How Companies Are Wooing India's Youth INTERACT E-Mail to Business Week Online | |||
