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Contrary to the popular belief that the slowdown would affect consumer confidence, the demand from the home segment continues to be robust. In many ways, it has been a savior for several distributors who have significant exposure to consumer products.
Two companies—distributor Rashi Peripherals and sub-distributor Care Office Equipment—have attributed their growth of the past 12 months entirely to their consumer portfolio.
Rashi has seen the consumer side of its business—which contributes 70 percent to its revenues—growing by 20 percent, even as its commercial product portfolio contracted during the last 12 months.
Similarly, Care Office, which is among the largest sub-distributors of consumer PCs in Gujarat, has witnessed growth of nearly 50 percent over the last 12 months. The retail division of Care has seen a considerable growth, and by the end of the current fiscal the company’s four-outlet retail business is expected to almost double.
It’s as incredible as it’s intriguing that despite all the negative factors around—job cuts in certain sectors, salary cuts or no salary hikes elsewhere, rise in cost of living due to rising prices of essential commodities—consumer confidence did not suffer as it should have.
This to me is a sign of two things.
First, the Indian middle class is showing maturity and is confident of its future. Second, information technology is finally making the transition from being desirable to becoming a must-have for the middle class.
These are critical indicators for the future of the Indian IT industry. They suggest that India is ready for the mass proliferation of IT products and services.
To borrow from Geoffrey Moore’s book, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, the Indian IT market is ready to move from the ‘early adopter’ stage to the ‘early majority’ stage. Indians are increasingly becoming pragmatic about the need for IT in their homes.
However, as Moore also points out, the most difficult transition is to move from the early adopter (visionary customers) phase, to the stage of early majority (pragmatic customers). Achieving this calls for redefining marketing strategies, and choosing the most appropriate distribution channels and pricing.
The Indian consumer seems eager to make the transition, but the key question is whether the IT value chain is ready to cross the chasm. |