Not Just FMCG

…But almost everything

I am on the verge of seeing a paradigm shift here. We, as analysts, always talk on the product life cycle, and how a product burns out its life in the market. But, at this juncture I am witnessing a shift in the consumer behaviour now. The “Desi Boyz” is ruling back. Be it FMCG goods, or simple white goods, or mobile sales, or auto sales, things seem more “Desi” now.

If we look back in 1991, during the period of Rajiv Gandhi, when the then finance minister Dr. Manmohan Singh, had opened the gates cautiously to non-domestic goods, lot of people had jumped into acquiring the non-Indian made goods due to prestige issues, status symbol, a feeling of association coupled with compulsive desire to buy non-Indian goods. People thought that that was the best idea.

21 years hence, and in the 21st century, the things are different. Starting from a shaving gel like Vi-John to cars like Nano, from Mapro fruit products to Karbonn mobiles, everything speaks the final words: “We are Desi”.

When the foreign players tapped the Indian market, they forgot one thing- that in the coming years 70% of the Indian population in the rural sector will be exposed to the gifts of technology, and to decide not to invest or even failure to expose them to the growing technology will lead to a sales dip, both by volume and revenue. Nokia per say, had this oracle see true in this year, and other companies are yet to follow.

The question is of quality here. The question is of internal association here. The question is of the longing effect “Wow” per say in short time and less price. The question is of penetration in the minds of semi-urban and urban areas, as the non-domestic players are busy to mint money in the urban areas only. Now how can others tap those is the question?

Here is some food for thought:

  1. Taxation strategy from the government should be different for domestic and non-domestic players, such that for every sale, a percentage goes to the infrastructure development
  2. Domestic players gets more exposure to the rural places for sales
  3. Non-Domestic players can reach to the urban masses only, with some amount of restrictions to the non-domestic players in the semi-urban and urban areas

I request for the “status quo”. Probably an attempt to gather the back-taxes through GAAR has only lead to Vodafone’s ire for the 20, 000 crore back-tax, and an outlook for India reduced from Fitch and S&P. Non-Domestic companies are looking for small term gains for investment, thanks to the improving economy of the USA and the fading lights in the EU, as if it was not enough to route investments through Mauritius to avoid double taxation. Opening to short-term gains, will pull out Pandora’s Box for India, and the flow of cash would stem after a short interval, rather than looking for long term gains where the money ebbs later. Let me tell you this, there has to be a path where the global investments are taken care of. And that has to come from BRICS, although we see that momentarily Brazil, Russia and India are losing their value in currency. The fact is nothing has gone wrong, except FIIs drawing money from the “Streets”.

Time to come back, I guess instead of taking the burden of the world at this moment, India should work on how to devise a method to close the deficit in expenditures. Oil has a value, and a compounded inflation growth does not help a country or a political party to be a beneficiary in this matters.

I hope someone admires these thoughts!

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