North Indian Vs South Indian Luxury Consumer Behaviour — know them closely
Many countries within a single country — definition of India (for people yet to skilfully unlock its diversity).
India is the second-largest nation by population and it is estimated that its population will exceed China’s population by 2024. World Bank estimates that India’s population will be around 1.73 billion by 2050, as opposed to the current 1.32 billion.
Home to 29 states and seven union territories, India is a land of diverse languages, climates, traditions and culture.
Culture characterizes the ways of living of people, their beliefs & value systems, customs & traditions, institutions, languages, use and adaptation of technology, art and is considered as the total of knowledge and other capabilities and habits acquired by man as a member of the society.
Culture has always been a predominant determinant of understanding consumer behaviour. India, being the land of diverse cultures, has noteworthy reverberation on the psyche of consumers and their buying behaviour.
As per the world trade review of 2018 — luxury brands are increasingly entering the Indian market, proving the country’s potential as a destination for luxury products and accessories. According to the Associated Chambers of Commerce and Industry of India, the luxury market is worth $18.5 billion and has the potential to reach $100 billion.
Given the opportunistic land, India could parallelly be a challenging one for an international brand to get into because of its kaleidoscopic world.
While we do have dominant metro cities like Delhi, Mumbai, Bangalore — they don’t holistically define the diverse Indian consumer personas and companies remain unaware of the undiscovered consumers in the two-tier and three-tier cities.
This blog will help you understand broadly the difference between consumer mindset and buying behaviour amongst the North and South Indians. We have tried to highlight the effect of cultural indicators, socio-cultural beliefs on buying habits and thought process of Indian consumers.
North India & South India — The cleave between the two lands
Demographics — let’s get them straight
While India is a young nation compared to China and the US, a report by SBI predicted that the country might be heading towards a population divide by age within, with a younger North and an elder South.
Income and Development
According to a study conducted by research firm Kantar Worldpanel, it states that the five southern states of India could very well be another country, given their largely divergent development path over the decades, compared to the northern States. They have not only attained superior progress in improving various indicators of social development but also on the economic prosperity of their people.
South India is more urbanised, economically progressive, more holistically developed and culturally sound which thereby influences their consumption behaviour.
“Nearly 33% of the households in these southern states are SEC A and B households, i.e. of a higher socio-economic class. This is higher than the rest of India that has 24% of households. The south has a per capita net state domestic product (NSDP) beyond Rs 130,000, as against a national average of Rs 85,229” as per research by Kantar Worldpanel.
The above demographics and socio and economic conditions further define and distinguish the consumption behaviour.
Investing in Large ticket size products
It is observed that north Indian consumers spend on large ticket size items are much higher than in other parts of India. North India adopts a more outside-in approach, this has been reflected through their spending more on clothing and lifestyle products.
Who is more Tech-savy here?
As expressed by retailers and industry professionals at the Inaugural and Keynote Session at the inaugural edition of the North India Retail Summit (NIRS), it has been seen that West and South India embrace technology at a much faster pace as compared to North Indian. This stands predominantly true in the case of preference for CODs over digital payments indicating their hesitancy on electronic transactions. However, consumers overall are believed to be open to and embrace e-commerce and technology.
Who do we expect Loyalty from?
On the question of brand loyalty, the North Indians are largely loyal to brands and stores that understand what consumers want. There is a strong requirement of creating an association with a particular store and the salesperson who will always offer a consistent and personalised service to their customers.
Distinct Factors that influence the two worlds
As per a research study on “Impact of Cultural Dimensions on Apparel Purchase Behaviour “Comparison of North and South Indian States”, it was found that the North Indian consumers are “Quality Conscious”, “Materialistic” and “Status-Conscious” followed by “Masculine and Power influence”, which has a positive impact on the amount spent on their purchases. The purchases are usually decided and made with consent by the head of the family and most often by the male member only.
On the contrary factors like “Quality Conscious and Traditional” along with “Emotional and Confirmative” purchase is seen to have a positive effect on the amount spent on purchases by the South Indian consumers.
Yes — only if you speak in our Language!
Consumers in South India are very loyal to their native languages. We see language playing a dominant role in South India as a part of advertising and other communication campaigns.
However, as North India has always been subject to its diverse culture and communities, English stands as a recognised language for the people.
Similarities between the two geographies
Indian consumers have always been and remain value-conscious buyers. However, the recent consumer behaviour highlights the shift from value-for-money based consumption to money-for values-based consumption. This means, that consumers from both — North India and South India, though not in the same proportion are gradually willing to upgrade for premium and the right proposition irrespective of the fact that they need to shell out more money for it.
This shows the overall up-gradation in the consumption and lifestyle pattern.
Indians are gradually shifting their perspective on how they consume. However, the consumer still remains distinct across various regions.
A brand entering the Indian market needs to be well aware of the various Indian Consumers who are driven by unique cultures.
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