Posts filed under ‘Observations’

Jio – An Audacious Gamble or Bold Game-Changer ?

Our last post mentioned, “roll out of 4G LTE and imminent data price wars” in anticipation of the Reliance Jio launch. And, a couple of days before we posted the infographic, Jio opened up their ‘freedom offer’, which was restricted earlier, to everyone ; it’s now probably becoming the ‘welcome offer’.


jioplansMy interest in Jio was piqued the moment I saw tweets with screenshots, especially this one, of the data plan from ANI_News, which was live tweeting the AGM.  The reason was my current mobile plan. I use a Rs. 1,299* plan that my current mobile operator offers (with a discount of Rs.783, they call it a 3G promo offer) for which I get, “299 minutes of free talk time”, “200  free local sms” and “1GB data” on their 3G network. My primary reason for choosing this plan was the data pack. I calculated that I needed about 1 GB of mobile data for on-the-go occasions and for everything else, there was my unlimited home wi-fi of which I consume about 6-8 GB of data on my phone every month. Now, with the Rs.499-M plan of Jio, which is less than half of my current mobile plan, I can get 4x (and more) the data at 10x speeds. What’s more, I can do away with my home wi-fi connection! The only thing that stopped me from going in for a Jio connection earlier was that my mobile phone (Oneplus One, running CyanogenMod) wasn’t a device originally listed in their device FAQ.

jiolaunchThe moment the phone compatibility issue was taken care of with the Jio4g voice app, I was in the queue for a Jio SIM. The Aadhaar card based activation was a breeze and I had the Jio SIM about 30 minutes later – most of which were spent standing in the queue. Barring the face-to-face interaction with the Jio representative at the store, experience with Jio at other touchpoints hasn’t been satisfactory. I couldn’t get through to the Jio tollfree number easily to enquire about the compatibility of my phone on their network. When I did, I had to wait about 20 minutes and then talk to an untrained customer care associate who asked me what the, “brand name and model was for a Oneplus One” (even the rep at the store wasn’t that clear, all he said was, “if you’ve got an offer code on MyJio app, the phone works”).  Activation took about 3 days since the day I got the SIM, and I got to know about it only after another call to the tollfree number because the activation SMS didn’t reach me.

Having used the Jio network for almost a day now, the overall usage experience is nothing great to write home about. I couldn’t place any outgoing calls to numbers on other networks barring Jio ones and an MTNL landline. Calls from other networks, including MTNL, to a Jio number don’t go. While I could receive SMSes on the Jio number, the ones I sent out weren’t received on numbers on other networks. The much touted 4G data speed too wasn’t in sight. I was getting download speeds ranging between 60-500 kbps. There are also other minor niggles in the app which will hopefully be ironed out soon – the Jio4gvoice app is always on, draining the battery more than necessary and I found the 4g connection drops when I am on a wi-fi network.

While there is bound to be some confusion, delay and a few niggles with a new launch – especially one with such grand objectives , there are a few things that are a complete master stroke by Jio…

  1. Free welcome offer of 3 months (unlimited calls and internet):
    • Though they haven’t lived up to their promise of “5 minute walk-out-working” Aadhar based signup, people are willing to wait days for activation because everything is free as of now
    • It allows Jio to stress test their network with a lower number of users at higher usage before they ask more people to pay-up for less usage in about 3 months
    • If these users are delighted with the network (in all likelihood they’ll be, at least with the data network), the word of mouth they’ll generate is going to a huge marketing push
  2. Not porting numbers right now:
    • Though the FAQs say you can port, they aren’t doing it right now (or rather the Jio rep I met in the store told me so). Imagine the additional headache of training their entire team to answer additional porting questions from customers. Coordinating porting with other telecoms and then intimating date and time of porting to new customers. Worst still, service disruptions during the porting process lasting hours making thousands (or lakhs) of customers angry
    • I suspect, this is also probably forcing customers that are unwilling to let go of a number they’ve had for ages, to use Jio as a second network more for data than voice (and they have an “activate data only” option as well).
      • As an offshoot, in the near term, demand for low cost dual sim 4G phones is probably going to hit the roof
    • With the data from those using voice on Jio, Reliance can negotiate better with incumbents for more interoperation points and lower charges. Thereby providing better voice experience by the time they launch paid services in January 2017. (Read more about it here: “Jio supporting their demand for PoIs for 22 million users quoting 50 million call failures”, “TRAI set to reject higher interconnection charges from telcos”)
    • The other thing which I suspect is going to happen is that while Reliance Jio has full visibility of which networks people are coming from or going to switch from (thanks to the data they are collecting during the signup), the telecom operators are in the blind as to how many of their existing users are trying out Jio. Come 1st January, the blindsided operators, might lose millions of subscribers at one go.
  3. Possibly converting a whole segment of feature phone / pre-paid users to smartphone users :
    • This is just a hypothesis based on observations of those in queues at a few Jio stores. If the free voice calls and free SMS lures enough of those using features phones on pre-paid cards towards smartphones, and if they experiment with downloading music and video and are satisfied with the experience, and if a sufficient number continue on the Jio network after Jan 1st, then smartphone usage would have penetrated a whole new segment. Three big Ifs, I recognise, but the combination has the potential to be a game-changer.
    • Of course, a large chunk of these users may turn out to be shrewder / more value-conscious than we give them credit for and may stop consuming data for entertainment once they have to pay for it. They might yet continue with Jio for voice calls, in which case though Jio would have succeeded in switching users from competing networks, the task of changing their usage behaviour and increasing ARPUs would still remain. Worst case, if the voice connectivity on Jio networks is poor (as it is currently) , they may switch back to their old networks and it’ll be a bet gone horribly wrong – the mother of all promotional offers, one that induced a lot of free trial, but generated little conversion or loyalty.
  4. Having to install MyJio + Jio4gvoice apps to generate offer code prior to getting a SIM:
    • Even before Jio gives out the SIM, they have access to pretty much everything on a prospect’s phone – read and modify contacts, call log, calendar, sms, location – via this placeholder of an app called MyJio. Add Jio4gvioce, they can have everything else from your phone – identity (personal and device), camera, media (photos and everything else on your phone and sd card), microphone. Not many users in India are educated or knowledgeable about how much data an app can access and transmit.

Anyway, returning to our last post…

  • Price wars are imminent: Airtel has already cut prices. BSNL announced that it will match Reliance “tariff-by-tariff”. Vodafone and Idea are yet to announce their plans.
  • Mobile data consumption is set to explode: In the previous post, we mentioned that there are, “33.9 Million mobile users (~11% of total mobile internet users) who consume over 2 gigabytes of data per month”. Now, Reliance Jio claims, ‘the average monthly data consumption per user has exceeded 26 GB’ in April-June quarter and they had, ‘over 1.5 million test users’ even before the test launch.  That’s a 13x jump in average data consumption by a smart phone user! That might be the best case of course, but considering that one gets 4GB of daytime data and unlimited night time data over mobile networks and 8 GB over Jio public wi-fi hotspots, even in the Rs. 299 (pre-paid) and Rs.499 (post-paid) plans, these averages aren’t going to hold for long.  This might be the stimulus the telecom industry needs during a time when the average data ARPUs are falling  ( as data prices have largely remained constant while average ARPUs have been falling, my hypothesis is that new users being added aren’t consuming as much data).
  • Collateral damage – voice calls: There has been much acrimony already between Reliance and other operators. Reliance Jio has accused incumbent players like Bharti Airtel and Vodafone of not releasing sufficient inter-connection ports to terminate a voice call in another network (news report 1, 2). I think it’s a moot point because, eventually, people using Reliance Jio (or other networks matching Jio’s data prices) are going to be doing a lot more of VoIP and video calls.  Operators are not going to choke on incoming voice as they are currently claiming, they are going to choke on incoming data.
  • Collateral damage – entertainment apps: The SOP 5 with the Jio SIM is, “Install Jio Apps” and the MyJio app installs a Chat, Cinema, TV, Music, Magazine, News, Storage/Drive, Money, Fashion app. My hypothesis is all the lesser used or upcoming or limited content or me-too apps in these domains are going to really find it difficult to survive. I also think DTH operators are going to suffer a bit. I definitely don’t find it worthwhile to pay for a big bundled pack every month when I view only 1-2 hours of TV a week. If I can access those few shows online, I am definitely going to cast them on my TV and disconnect my DTH.
  • Data services as the imagery drivers: We also mentioned, “Indians are still more concerned about voice quality than data services” and that, “among smart phone users elsewhere, data speed is considered to be the most important factor in determining both network performance and satisfaction with an operator”. India is going to catch-up to this paradigm soon. The provider who has better data network and app content is eventually going to win and Reliance Jio has already built a huge lead in it.

The last time, Reliance launched a mobile network, it brought the voice prices down. Hope they do it for data now. All in all, exciting times ahead both for users and watchers.

By,

Ravindra Ramavath

 

September 13, 2016 at 8:38 am Leave a comment

Does this smell ring a bell ?

About the link between fragrances, our memories and emotions, and buying behaviour.

Our last post described the phenomenon behind ‘petrichor’- that marvellous freshly wet mud smell, and why we love that smell so much. In this post, we intend to touch upon a few other such fragrances – natural as well as man-made.  But first, a few facts about our sense of smell.

Humans have five to six million odour detecting cells ; if that sounds like a lot, consider the fact that your pet dog has about 100 – 220 million, depending on the breed ! Multiple sources mention that the human nose can sense about 10,000 distinct scents ; though a paper published in the journal Science in 2014 stated that this number was closer to a trillion scents ! Incredible, isn’t it ? So how does our sense of smell work ?

When an odour enters the nose, if affects the olfactory epithelium that is made up of millions of nerve endings ; the nerve endings pass the ‘message’ along the olfactory tract to the olfactory bulb and it then enters the limbic system. The limbic system comprises a set of structures within the brain that are regarded by scientists as playing a major role in controlling mood, memory, behaviour and emotion. This is why fragrances have such a strong link to our memories, emotions, and moods. Hence the soothing influence of some fragrances (e.g lavender) and the energising effect of others (e.g lime).

This article goes a step further and mentions that smell sensations are relayed to the cortex, where ‘cognitive’ recognition occurs, only after the deepest parts of our brains have been stimulated. Thus, by the time we correctly name a particular scent as – for example – ‘vanilla’, the scent has already activated the limbic system, triggering more deep-seated emotional responses.

This explains the phenomenon often noticed in consumer research on fragrances ; even people who struggle to name a fragrance or to describe it in simple terms like fruity / flowery / lemony / woody / musky etc., can often describe how it makes them feel or what they associate it with –their first girlfriend, grandmother’s morning prayer rituals, a sun-dappled garden with rows of brightly coloured flowers, a hike to the top of the hill in the rain, cake baked by mum fresh from the oven, you get the picture, right ? This is noticed far more during consumer research in India than abroad, as our vocabulary for fragrances is not as developed ; everyone recognises sweet / flowery and citrus / lime, but few can tell a woody fragrance from a musky or a green one, making the act of decoding through associations even more important.

To return to the topic with which I began this post, apart from petrichor, which other fragrances are universal ones, that all or most of us recognise ? In India, jasmine would be one recognised by everyone – whether by the name ‘chameli’ in the North or ‘malleepu’ in the South; sandal would probably be another – calm, soothing, eternal. There probably are a lot of man-made fragrances that we all recognise too. For instance, some of the most common scent associations are those related to food. Ever stood near a shop selling freshly-made chhole-batoore and inhaled deeply before reaching for your wallet ? Or walked past Mysore Concerns in Matunga area of Mumbai and felt the fragrance of freshly ground coffee beans waft up to your nostrils and languorously beckon you to the counter? Maybe it’s just me, but I can think of loads more – fragrant biriyani, or cardamom chai (any masala chai, actually), ripe mangoes, the smoke from a tandoor, garlic naan are among the few that come to mind. Some of this understanding is used commercially too – noticed how there’s often a baking smell that you inhale as you walk past a cookie-shop in a mall ? That’s to make you feel hungry and tempt you to loosen your purse-strings.

But not all universal scent associations are food-related. There’s the salty tang of the sea, mild but still perceptible even in the polluted waters off Bombay, the smell of wet khus on coolers in North India during summer, the smoky smell hanging in the air after a lot of fire-crackers have been burst, the strong antiseptic smell associated with hospitals, the warm n’ fuzzy ‘awww’ inducing smell of a freshly powdered baby after a bath.

There are powerful stories and anecdotes about the way consumers’ relate to the fragrances of products and their strong connection with the same. For instance, consider Johnson’s Baby Powder, a product with one of the most recognisable scents in the world. Introduced in 1893 to soothe irritation on plastered skin, it was soon being used to help alleviate diaper rash too. The aroma of Johnson baby powder is so strongly connected to the image of a happy, clean baby that it is often identified as ‘the baby smell’. In fact, close to a decade ago, a baby products brand trying to enter India found this an impassable barrier and had to retreat – while young mothers liked their products and were happy with them, the grandmothers were rejecting them as ‘the baby didn’t smell like a baby anymore’. What the grannies were missing, in fact, was the smell of the Johnson’s baby powder on their precious grandchild, but their identification with it was so complete that it was ‘the baby smell’ to them.

 

fragrance - iconic products, some ingredients 2Scents are such powerful triggers to our emotions – thence to our loyalty, and commercially speaking, our purse-strings – that many iconic brands have kept the initially successful fragrance unchanged for decades or more. Examples of such instantly recognisable fragrances are Johnson’s Baby Powder, Pond’s Cold Cream, Dettol antiseptic liquid, Old Spice cologne, Pears soap etc.  Of course, a challenge faced by such brands is remaining contemporary and relevant to their audience while retaining the physical product attributes such as fragrance. But that’s another story, meant for another post altogether.

  • Zenobia Driver

 

July 7, 2016 at 12:12 pm Leave a comment

The smell of the rain, and why we like it

rain pic 2

As the monsoon advanced across South India, Wikipedia shared an apt factoid on twitter last week, ‘The smell of rain is “petrichor.” ’ The oxford dictionary defines petrichor as ‘a pleasant smell that frequently accompanies the first rain after a long period of warm, dry weather.’ No wonder most of us love that ‘fresh wet mud’ smell – it heralds an end to the sultry summer and the onset of cloudy breezy weather, but more about that in a bit.                      

The word petrichor is derived from a combination of the Greek words ‘petra’ meaning stone, and ‘ichor’, the fluid that flows in the veins of the Gods in Greek mythology. Petrichor was first described in a paper published in Nature journal in 1964 by Australian CSIRO scientists Isabel Joy Bear and Richard G. Thomas, and the process that gives rise to the fragrance we perceive is fascinating indeed.

During dry periods, plants exude an oil that retards seed germination and early plant growth, this oil is absorbed by clay – based soil and rocks (hence the words ‘petra’ and ‘ichor’). The smell itself comes about when increased humidity fills the pores of rocks, soil, etc. with tiny amounts of water. While it’s only a minuscule amount, it is enough to flush the oil from the stone and release petrichor into the air; this must be why we get that slight whiff of the rain smell before it actually starts raining. This process is further accelerated when actual rain arrives and makes contact with a porous surface; air from the pores forms small bubbles which float to the surface and release aerosols, such aerosols carry the scent and spread it. The article that I referred to for much of this information also has a super slow motion video released by scientists at MIT last year that helps explain this process.

So now you know it, Petrichor – that fresh fragrance that makes everyone’s spirits rise, is not the fragrance of the rain, neither is it that of wet mud, it’s actually due to an oil that’s released from the rocks or soil into the air just before the rain begins to fall. Did the description of the process in the last paragraph kill the romance of that fragrance for you, or make it even more interesting ? I hope it’s the latter, because more deconstruction follows – this time of why we find the smell of the rain so pleasant.

The reason petrichor makes our spirits rise may actually be hardwired into our memories, part of our collective consciousness – some scientists think it’s due to our species’ reliance on rain for a plentiful supply of plants and game animals throughout history.  This article describes some evidence that may support this hypothesis. Anthropologist Diana Young of the University of Queensland in Australia, who studied the culture of Western Australia’s Pitjantjatjara people, has observed that they associate the smell of rain with the color green, hinting at the deep-seated link between a season’s first rain and the expectation of growth and associated game animals, both crucial for their diet.

So next time you draw in a deep breath of that fresh wet mud smell and feel invigorated, think of how that reaction connects you to your ancestors from centuries ago.

Next post : Now that we’ve serendipitously stumbled upon the topic of fragrance and the collective consciousness, we’re going to take this thread further – look out for more examples in our next post.

  •  Zenobia Driver

June 11, 2016 at 8:09 am Leave a comment

English-Vinglish, and all that jazz

Read this article about the English Dost app via a friend’s Facebook feed and was reminded of a few incidents that I’ve witnessed during the last year.

On the day a friend left Mumbai for Singapore, among those who visited her house to say goodbye was her maid. The maid had brought her adolescent children along too, and I was amazed at the difference between the maid and her children. Had the mother not introduced me to her daughter, I’d never have guessed how closely they were related; the maid seemed like someone one step away from the ancestral village, while the daughter seemed a native of a big city.

While the mother wears a sari, cannot speak much English and is rather diffident, her daughter prefers jeans and a shirt, speaks good English and is much more confident. While the mother is uneducated, she’s ensured that her daughter got a school education and learnt English, and encourages her to attend college; even though the young girl has to hold down a part-time job in order to meet her education expenses at college ,she’s determined to obtain a college degree that will get her a better job than her mother’s and a brighter future.

A few months later, I was at Bodh Gaya for the sales and marketing module of a Cream training program. The participants comprised micro-entrepreneurs from villages in Gaya and Muzzaffarpur district of Bihar. They could speak some English, but not much ; hence classroom sessions were conducted in both English and Hindi, with constant translation of any English sentence by an interpreter. All our training material (slides , hand-outs, question papers) had also been translated into Hindi for the benefit of the participants. Yet we witnessed an amazing zeal to learn new English words that pertained to their businesses, as if they saw these words as currency for garnering status in the eyes of their peers (remember that these were all rural micro-entrep[reneurs). There were participants who’d stop us mid-sentence and ask us to spell out ‘negotiation’, ‘consumer’ etc. and earnestly write down the English word in their notebooks.

English learning appsNo wonder there’s such a huge market for English learning apps and so many of them available now. There’re generic apps like Busuu through which anyone can learn English ( or another of a set of languages) by having conversations with native speakers of that language. There’re English Dost and enguru, both of which use a game with real-life situations to help users learn English, these seem to target those joining the corporate sector in junior management roles. English Seekho by IMImobile and IL&FS Education & Technology Services limited target a very different audience – junior level clerks, traders, unskilled laborers, frontline staff, taxi drivers, restaurant waiters etc. There’s also the British Council site that has several English learning apps, podcasts etc., and even an app to help Taxi drivers learn English to communicate better with their customers ! Clearly there’s a ton of demand from a large number of segments.

  • Zenobia Driver

December 10, 2015 at 1:18 pm Leave a comment

Micro-entrepreneurs and Math

Our last post focussed on literacy levels and the availability of schools in a few focus states. This post is anecdotal in nature and contains some observations about the various ways in which the lack of a quality education hinders micro-entrepreneurs from developing necessary business skills and attaining their full potential ; the next post will share some quantitative data on the quality of education available to children currently.

While interacting with adult learners at the Cream training programmes offered by Tree Society to rural micro-entrepreneurs, I’ve noticed that they struggle with basic math and/or with the application of basic math. Yet, the adults undergoing CREAM training are not illiterate; all of them have attended school for at least a few years, most are 10th or 12th pass, and some are graduates from a local college.

 

There are those who know the calculations – can manage division, decimals, percentages etc. – but struggle to apply these in real-life situations.

[  A simple example : The owner of a small business may know what percentage is and even how to convert a percentage to a value; i.e. he knows that 10% of 200 = 20

But he may struggle when faced with a question in words. ‘A business sold goods worth Rs. 4000 this month. It expects a 10% increase in sale value next month. What will be the value of total sales next month ?’ ]

I have also noticed another phenomenon – even when they learn how to apply a formula and use it, any change in the structure of the problem or in the way they need to apply a formula leaves them slightly confused as algebraic manipulation is a skill not taught to them. For example, even if they understand a formula for profitability and its application, they are unable to rearrange and apply the formula to a problem where desired profitability and costs are known, but selling price and revenue are to be calculated.

Then there are some adults who seem to have learnt hardly any Math beyond counting and addition in childhood. They struggle with sums that involve simple division and cannot interpret decimals or fractions correctly. They are fazed by basic calculations such as margin or profit %, growth rate etc. As a result, the micro – businesses they run are inefficient and fail in adopting well-established processes such as setting the right selling price for their product, or estimating the right amount of raw material based on a sales forecast, or making a reasonably accurate sales estimate in the first place. The experience of teaching this set of micro-entrepreneurs made me start wondering about the state of primary education in our country and the implications on the supposed demographic dividend (or liability) for our future.

In fact, as data from Pratham’s ASER survey shows, it’s no surprise that so many of the adult learners struggled with division; even today, only 25% of children in class V can solve a division problem, and this proportion rises to only 46% of students in class VIII (wait for our next post for more information and some interesting infographics on this).

  • Zenobia Driver

May 13, 2014 at 4:47 pm 2 comments

Beauty ‘saaluns’ in villages – a sign of change

A few months ago, during a CREAM (Certificate in Rural Enterprise Administration and Management) training session for micro-entrepreneurs in rural Bihar, we enquired about the professions of each. Turned out that each of the three women taking the course aced at multi-tasking ; apart from managing the house, each held down two other occupations. My first reaction was amazement at the amount of work that they packed into their day, but later I was struck by the fact that two out of these three women ran beauty parlours (or as they pronounced it, ‘saaluns’) out of their homes.

We asked these ladies which treatments their customers went in for and it was more than just hair-cuts – facial, eye-brow threading etc. In villages in Bihar ! So beauty consciousness is increasing not just in urban India, but in rural India too.

This article from the Mint also mentions this trend, albeit in passing. This article, from the Mint again quotes Mr. C.K.Ranganathan, Chairman and Managing Director of CavinKare, “The rural consumer has become more beauty conscious and is willing to spend more on personal grooming.”

Wonder which are the companies benefiting from this trend ? and whether they are using these ladies who run beauty parlours from their homes as influencers ?

We’ll try to dig deeper into this topic with time, so keep visiting this blog for more information on the topic.

  • Zenobia Driver

February 11, 2014 at 10:32 am Leave a comment

Consumption and the Super Rich

In our last post, we established the context for our exploration into the lives of the super-rich. We saw just how wealthy the 1% at the top is in comparison to the rest of the world’s population. In this post, we shall try and decode their consumption habits and gain deeper insight into the mind of the luxury shopper.

A survey conducted by Prince and Associates in association with Elite Traveller Magazine, which is popular among private jet travellers uncovered these spending habits of the Jet setting elite:

  • 89% purchase fine jewelry per year, spending an average of $248,000 (INR 1.24 Cr.)
  • 32% purchase luxury watches per year, spending an average of $147,000 (INR 73.5 Lakh)
  • 90% purchase fashion/accessories per year, spending an average of $117,000 (INR 58.5 Lakh)
  • 65% stay in a hotel/resort for leisure per year, spending an average of $157,000 (INR 78.5 Lakh)
  • 73% use a hotel/resort for a meeting or event per year, spending an average of $224,000 (INR 1.12 Cr.)
  • 59% stay at a spa per year, spending an average of $107,000 (INR 53.5 Lakh)
  • 21% take a cruise per year, spending an average of $138,000 (INR 69 Lakh)
  • 17% take an experiential trip per year, spending an average of $98,000 (INR 49 Lakh)
  • 75% make home improvements per year, spending an average of $542,000 (INR 2.71 Cr.)
  • 85% purchase wine or spirits per year, spending an average of $29,000 (INR 14.5 Lakh)
  • 30% purchase fine art per year, spending an average of $1,746,000 (INR 8.73 Cr.)
  • They own/lease 4.4 luxury vehicles currently and 85% are planning to acquire a new vehicle in the next 24 months
  • They own 2.5 primary homes valued at $2 million + (> INR 10 Cr.)

Thus, these people spend considerable amounts of money on things others might consider luxurious. If you thought only the Americans and Europeans were crazy about luxury, the super-rich in Asia are also quickly getting up to speed with the west. Japan has long been one of the biggest markets for luxury goods in the world, and India and China are fast catching up thanks largely to growing economies and young populations with large expendable incomes.

However, it’s not just the amount of money they spend, but the manner in which they spend it that suggests the lengths this segment is willing to go to in order to satisfy their desire to consume.

Consider, for example these shopping behaviors exhibited by some of India’s super rich and reported by the Economic Times :

  • Shahnaz Husain, Cosmetics Diva, has a Louis Vuitton collection in her wardrobe—not crafted at any factory of the French fashion giant, but at her bungalow in South Delhi, designed by herself and stitched by an in-house tailor. She always buys LV Bags in pairs: One to be used as a bag and one to be cut up and shredded for use by her tailor.
  • Diljeet Titus, one of Delhi’s top lawyers, has bought 40 handsets of luxury phone brand Vertu in the last couple of years. Vertu phones in India cost between INR 3 lakh and INR 66 lakh. Titus also loves to splurge on luxury watches, suits, phones and vintage cars for himself.
  • A lady in Delhi sent 3 specially imported Hermes Birkins worth INR 60 Lakhs to a family friend whose daughter’s wedding she was unable to attend. She also sent an apology note.

This is not just a Delhi phenomenon, although Delhi is fast establishing itself as the nation’s luxury capital. The Delhi stores of most luxury brands with a presence in India are their best performing stores in the country today and cities like Bombay and Bangalore are only just catching up. As far as luxury malls are concerned, Delhi’s Emporio, Mumbai’s Palladium and Bangalore’s UB City are the most preferred destinations for luxury brands seeking to open in the country.

mall interiors

Data gathered from one of the world’s top apparel brands with operations across India suggests that approximately 55% of all revenues come from a small portion of the total customer base (~10%) and spending is concentrated even further amongst the top 1%.

Interesting anecdotes from those in the industry bear this out. One customer, for example, a rich businessman from the Mumbai area spends approximately 2 million INR annually at just 1 store of a brand selling premium casual wear, in addition to shopping at the brand’s stores in Thailand, London and at other locations across Europe. Another customer in a different city once deposited approximately 1 million INR at a certain luxury brand’s store in cash! He said it was too inconvenient for him to carry cash around every time he had to buy something. Even more surprising, he used up his store credit within 90 days.

A 2008 research amongst affluent households (Household Income >$100K) and Super-Rich Households (>$250 K) also provides keen insight on the media consumption habits of the Super Rich, as compared to the affluent. The richer one gets, the more time one tends to spend reading and surfing the web, versus time spent watching TV and listening to radio.

Thus, the super-rich individual today is:

  • A big spender on luxury products and experiences
  • An eccentric and a stickler for personalization, both in experience and in product
  • A global traveller, in tune with the latest luxury trends around the globe
  • An avid reader and a digital native

The Super Rich Customer’s wallet is the Holy Grail most luxury marketers are after and the quest isn’t an easy one. “What do you sell to someone who has it all?” is the question most are trying to answer. In the next post, we shall take a look at what Luxury and Premium Brands the world over are doing to serve this ‘Over served’ segment.

  •   Rahul Sharma

December 24, 2013 at 5:27 am 3 comments

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