Currently citizens of different countries in Asia have a lot of optimism for economic growth and standard of living improvements for their countries and the next generation. We have been able to see a lot of economic growth in many of those countries and many predict more growth and international expansion in Asia. Surveys of people living in different countries in Asia have also shown that they believe their children will have a higher standard of living than they did. This increase in economic strength mixed with the high population in Asia leads us to believe that Asia will begin consuming more and more and therefore be very alluring to companies who are looking to grow and expand internationally.
This trend of growth and interest shows how important it is to understand consumer behavior in some of these countries before beginning to expand. One particular country of interest in India. Citizens of India are often known as savers, but this will begin to change because of the predicted increase in disposable income for those living in India. 80% of households in India are predicted to be a part of the middle class by 2030. This will cause an increase in consumer spending as well as purchases of better products. We also need to try and understand how this growth will impact the consumer behavior in India. Currently in India it is much more popular to purchase single portion items instead of larger items that are more expensive, but add more value. For example, a lot of consumers will purchase a travel sized bottle of shampoo instead of a regular-sized bottle that can be used for a longer period of time. These types of spending habits could change with the increase in disposable income. People in India are also very family oriented, which has a major impact of how companies should be presenting their products. “Nuclear families” are becoming the new norm in India with single-person household families making up a measly 4% of all households. This shows that companies should target family consumers and find ways to appeal to more than just one person.
We discussed in our first blog the impact of e-commerce and how it is shaping consumers behavior around the world. In India, it is still a relatively new concept, but it is growing. Currently, there is a lot of focus on community when shopping. Store owners and consumers know each other by name and know what they are going to purchase. These long-standing relationships between business and consumer will be difficult to break, especially since the experience is so familiar and pleasant. The other thing holding back a dramatic shift to e-commerce shopping in India is their preference toward cash. Digital payments are not as trusted as cash. In fact, 50% of online deliveries exchange cash on delivery. Despite the increase in use of e-commerce, consumers are still heavily relying on cash to do these transactions.
When entering different markets in Asia, companies truly have to keep in mind the cultural differences in shopping. These should be fully implemented into the strategy, but companies need to be ready to adapt. As these different countries experience rapid economic growth, it is likely that the consumer behavior will change rapidly, so companies need to be prepared to adapt to sudden changes and be flexible with crafting the shopping experience for their products.