Chasing customers: Rush hour, less square footage

With people from all walks of life chasing their dreams here, the city presents a huge business opportunity for all kinds of consumer businesses. The diversity in Mumbai, its people's approach to life and their busy lifestyles also bring out a very peculiar behaviour that companies feel is unique to Mumbai and needs to be addressed differently.

From a consumption point of view, says Chandru Kalro, managing director, TTK Prestige, Mumbai market requires products that address the smaller amount of space in most houses. "Consumers in Mumbai need products that are very efficient, time saving, convenience-enhancing and aesthetically good. In fact, these are some of the specific characteristics that we focus on during product development. Just to give you an example, we recently launched an induction cook top with automatic whistle counter. So all that a customer has to do is set the pressure cooker, the number of whistles and just walk out of the kitchen. The food will get cooked and be kept warm for consumption when you arrive," said Kalro, adding that the company continuously tries to see how its products can save those precious minutes for a Mumbai customer because they are so much pressed for time.

Echoing the sentiments, Harsh V Agarwal, director, Emami Ltd, said Mumbai is a very diversified market with customers from all the strata of life, something that's not seen in other markets like Chennai, Kolkata, Delhi, etc. "Even from income group and mindset perspective, people residing in South Mumbai behave differently compared to those living in the suburbs and beyond. When you talk about consumers, Mumbai has many Mumbais within; it's like a mini-India residing in Mumbai with all profiles of people who are highly exposed to the best and the latest in the market. A consumer company, thus, needs to take into account these unique aspects while addressing the Mumbai market and plan accordingly. That way, targeting becomes effective. Else, a lot of time, money and efforts will get wasted," said Agarwal.

A large section of the customer base in Mumbai has always been and will continue to be value-seeking, whatever they buy. That's because there are too many working women and sometimes maids are also using the product. So, the products have to be durable and they should not be very troublesome when in use. "These are some of the things Mumbai customers will look at in particular. That's not the case in Delhi because a lot of flaunt-value products do better there. Mumbai is more functional in that sense," said Kalro.

Niladri Mazumder, president and chief operating officer, Seiko Watch India, agrees. "Delhi is certainly very flashy," he said, adding that, "if Delhiites bought a Rs 5 lakh product, they would want to show it off." Talking specifically about the consumer behaviour in Mumbai, Mazumder said, "Mumbai is a place which seeks value for money. Besides, the confidence of a Mumbai consumer in buying a product is really telling. They are very confident of what they are buying and they do a lot of research on the product before coming to the store."

With opportunity come challenges and the city of dreams has quite a few that keep the consumer companies on their toes all the time. And the biggest of them all is high real estate prices. "The biggest challenge Mumbai throws up is huge rents. And because of expensive real estate, it becomes very difficult for brands to set up exclusive outlets to deliver the consumer experience. And if you want to do a boutique in the city, there are very few options for a luxury premium retailer brand to go to," said Mazumder.

High realty prices also posed a challenge for TTK Prestige. "We were not able to do too much for our Prestige Smart Kitchens business mainly because of high real estate prices here. That model did not work as well, as in the other locations," said Kalro. Distribution is another challenging area for every fast-moving consumer goods company in Mumbai, feels Agarwal. "Also, since real estate cost is very high, it becomes very challenging for consumer companies as to how to go about placing their existing and new launches in the retail outlets," he said.

On Emami's approach for targeting Mumbai consumers, Agarwal said, while their products under the Navratna banner are sold across Mumbai, the company through internal research and analysis has identified the kind of customers and catchment areas that are seeing larger sales volumes. "Accordingly, the Navratna range is then pushed aggressively through various below the line activities in those markets to drive better sales," said Agarwal.

Another point of view on why Mumbai is very different from other markets, said Agarwal, is that owing to the way people commute in the city, a majority of their free time goes into travelling from one place to another or from their residence to workplace and back. "Lack of free time also impacts the media consumption habits of working class people there. So while the rest of the country could be glued to the television set the same may not be true in the case of Mumbai. So consumer companies have to plan out that marketing and promotions accordingly to be able to reach out to their target audience," he said.

Across fast moving consumer goods categories, Mumbai as a city contributes anything between 5% and 7% of national sales. However, the contribution could be higher in the case of a lot of lifestyle products. In fact, consumer companies believe there is no other market in the country that can truly represent Mumbai from the perspective of what the target audience here needs. "That's one reason why consumer companies need to significantly fine-tune their go to market strategies – how to reach and appeal to the audience – for various pockets and catchment areas of Mumbai," said Agarwal.