Indianapolis to Indore

This is not about some journey from the midwest of the US to the middle of India. This builds on my post a couple weeks ago about understanding your target market.

I grew up about 100 miles south of Indianapolis (Indy) and looking back on it, Indy is a test market dream. Indy is a good proxy for getting a cross-section of the average US consumer and costs are low. I remember visiting Indy as a kid and wondering why did they need 5-6 electronics stores (HH Gregg, Circuit City, etc…), then I read that Indy was ground-zero for the battle of big-box formats in the 80’s.

India has a similar city – Indore.  It’s right smack in the middle of the country. I’ve visited Indore many times through the years and the more I visit, the more I see similarities with Indy. In both cities, people tend to be more conservative but willing to experiment with new products/services.

For most business the Tier 1 metros – Bombay, Delhi, Bangalore, Kolkatta and Chennai are good enough.  But, if a company is looking for size and scale they will have to look beyond Tier 1 metros.  And that’s where Indore comes into play, if your product/service gains traction in Indore I’m pretty confident you can reach across India.

Is Print Media Dead?

Depends on where you live. If you happen to live in the US, then yes…craigslist has killed the classified ad revenue model for newspapers, advertising pages for most magazines are down and many magazines and newspapers are just throwing in the towel.

Come to India and it’s whole different ball game, newsprint is doing well and the number of new magazine launches is insane. In the last few months I’ve seen at least 6 new launches, Lonely Planet being the latest. Lonely Planet is published by Worldwide Media a joint venture between The Times Group and BBC Worldwide. They also publish Top Gear and a yet to be launched home/architecture magazine.

I’m expecting more magazines to be launched as advertisers in India seem to be flush with cash. I’m really looking forward to two types of magazines, one is a Consumer Reports type magazine that will evaluate and rate products/services free of any payola – which is fairly rampant in India.  The other is a personal finance magazine, that can give you the pros/cons for new products and real down to earth advice.  Most of the existing personal finance magazines will never talk about a product in a negative tone for fear of losing advertising revenues.

India is different, when it comes to print media.

The 1.2 Billion People Trap

I always laugh when I get an email or phone call from someone telling ME how big of an opportunity India is for XYZ… Part of me wants to puke on their business plan, but part of me does believe India has vast opportunity if an idea is executed correctly.

Most of the conversations go like this “I was in India for 2 weeks and everyone has a BlackBerry or iPhone…wow 1.2 billion people, if I capture 1% I’m golden…” or “there is a large captive audience if we streamline service XYZ.”

Let’s examine each thought process in detail. The person in the first example probably stayed at a 5 star hotel and dealt with people that most likely are high earners.  That is not the real India, this individual is going to be shocked at how small the actual target audience is.

The second assumption is someone looking at a problem from a US/European point of view and applying it to India. An example would be mobile phone networks in India, right now India is adding 10 million new mobile users a month.  Mobile operators are not concerned about retaining customers or streamlining customer interactions, instead their biggest issue is their infrastructure cap-ex spending.

For ANYONE looking to start a business or expand their current business in India, I would highly recommend the book “We are like that only” from Rama Bijapurkar. It will get you to start thinking about your REAL market size opportunities and not fall into the 1.2 billion population trap.

Rama highlights 3 types of consumers in India based on income distribution: premium (10%), popular (30%) and discount (60%)…yes, most Indians are “value buyers.” When I hear Ferrari, Gucci or some other high end product is coming to India, you can assume it’s going to be a loss leader for many years to come.

Chapter 7 is where the action really starts with the SEC codes, what are SEC codes? Socio-economic codes (SEC) is a way to classify and segment the entire 1.2 billion people running around India. Those folks who want to sell Ferrari’s and Gucci bags will be bummed to find out their target audience is classified as SEC A1 which contains only 2 million households and 10 million people…what a let down.

Rama is very quantitative driven with her research and I was hoping for more actual case studies. However, the book is a must read for anyone looking at India or wants a PhD in number crunching India’s social graph.

Darth Vader's Car – BMW 7

Wow…that’s the only word that came out of my mouth when I saw a picture of the Vorsteiner tuned BMW 7 series. That is hugh for someone that has always had a love affair with Benzo’s from the days of the 560 SEC. As a kid I was crazy about Mercedes but over the years that affair has slowly waned. I have always loved Audi’s all the way back to the Audi 4000 and the death trap 5000.  However, BMW’s were always absent from my mental list but that has slowly started change with the BMW 6 series and the recently launched 7 series. Many of the styling cues of the current  7 series have come from Chris Bangle who was put in charge of BMW design and for many years was the most hated car designer.  Sad to say, I was pretty vocal of past BMW designs but the 7 series has made up for it. Chris Bangle left BMW last year and their sales are doing very well…some vindication for him.

The Vorsteiner tuned 7 series is just breathtaking…they have taken a beautiful piece of machinery and made it even it even better without ruining it as most tuners do. Take a look at the picture gallery and prepare to drool.