If you are one of India’s middle class consumers, chances are you are beginning to tighten your pursestrings. After all, we’ve gone from ‘India Unstoppable’ to ‘India Plummeting’ in just a few months. Back in January, things were far from this grim. The Sensex was at nearly 21,000, and the bet was that it would touch 25,000 soon. Yes, subprime was a big concern in the US, and food prices were beginning to climb, as were oil prices.
Yet, India, fuelled by a large domestic population, foreign investment and a resurgent India Inc., seemed immune to the problems plaguing the world’s largest economy. Now, it’s clear that India isn’t so immune. In fact, in some sense—given its vast population of poor— it is more vulnerable. Every time prices of food items like wheat, oils, vegetables and meat go up and incomes don’t, the less affluent have no choice but to either trade down or buy less of these items.
Yet, there might be something good that comes out of this painful phase. Marketers, for one, may emerge stronger due to cost cuts and improved productivity.
And given that there are millions of Indians who are still on the fringes of the consumer market, the lessons learnt by marketers in a slowdown like the one we are experiencing may help them penetrate deeper into the consumer pyramid. For now, though, they’ll have to deal with wary consumers.