'Bharat will continue to drive the growth of Indian economy'
Non-Metros: Driving the Economic Resurgence’: An esteemed panel discusses the contribution of Bharat—the tier II and tier III—to India’s growth story amid the Covid-19 pandemic
A webinar was held on January 13, 2021, which looked at ways in which Bharat will be the acme of growth of the Indian economy after the pandemic clears up, by exchange4mediageroup in collaboration with the Dainik Bhaskar group.
The panellists, Mr. Abhinav Iyer, Head of Marketing & Strategy, Muthoot Finance; Ms.Divya Karani, CEO, Dentsu X India; Ms. Kaacon Sethi, Chief Marketing Officer, Dainik Bhaskar Group; Mr. Mohit Joshi, CEO, Havas Media Group India; Mr. Satyajit Sengupta, CCSMO - Sales & Marketing, Dainik Bhaskar Group; and Mr. Shirish Agarwal, Head – Brand & Marketing Communications, Panasonic India, discussed how ‘Bharat’is likely to steer the economic revival from the pandemic. The panel also examined ways in which tier-II and tier-III cities have emerged as drivers of growth.
The topic of discussion was ‘Bharat: The Festive Momentum Continues’. The session was moderated by the Co-Founder of exchange4media Group, Mr. Nawal Ahuja. The panellists shed light on the economic recovery the country is going to witness in the next few months and the impact of this growth on the media and marketing ecosystem.
Mr. Ahuja, in his opening remarks, recounted the state of affairs in the immediate aftermath of Covid-19 when there was large-scale reverse migration to non-metros as people returned to their hometowns and the white-collar workforce continues to operate from these small towns as the work from home policy remains in force given that they can easily avoid paying rent for their accommodation in the metros.
He said that a stringent lockdown in metros meant that the impact on economic activity was also severe. However, the impact on non-metros was not that severe. Newspaper circulation is back to pre-COVID levels in non-metros and the regions also lead the GST collection.
According to Mr. Ahuja, the paucity of blue-collar jobs in the metros has forced the workforce to stay in their hometowns which in turn has driven consumption in Bharat. This was also aided by agriculture, which had a good run last year. In Bharat, a large number of people are employed by the government, because of which the issue of jobloss was not as acute as it was in the metros.
Mr. Ahuja first posed a question at Mr. Iyer on how his company has fared since the market opened up and lockdown restrictions were lifted.
Mr.Iyer said that Muthoot Finance had very little to complain about as the last nine months had been pretty buoyant for them.
“Even the year before Covid was quite challenging for many sectors, but we saw a 51 per cent growth in profitability and we grew from Rs 2100 crore to Rs 3200 crore in our PAT last financial year,” said Mr. Iyer.
He added that once their services resumed after lockdown, they closed the first half of 2020 with 29 per cent growth in profitability and 30 per cent growth in the book size. He said that Muthoot Finance has a sharp focus on non-metros, semi-urban, and rural areas traditionally. More than 70 per cent of its 5,330 branches are concentrated in these markets.
“So this new debate about non-metros playing a bigger role in economic contribution has always been the case with us considering that Indians make up 23 per cent of the global gold demand. More than two-thirds of this demand is from the hinterlands,” he declaimed.
Mr. Iyer said non-metros have always helped the company in pulling the averages as nearly 55 per cent of new customer acquisition happens from these areas.
Mr. Ahuja then asked Ms. Kaacon Sethi about the over-indexing of English language, to which she replied that English newspapers were unavailable for a long period of time because of which English readers moved on to other mediums.
Ms. Sethi said that this long gap led to a change in the habit of English newspaper reading. (This was not the case in non-metros).
“In Bharat, the social fabric is different; the lay of the land is different. And most of the newspapers were able to bounce back within a month. The circulation is close to 85-90 per cent now, depending upon the market,” Ms. Sethi explained.
She conveyed that the habit of reading a newspaper remains very strong in these markets. She also talked about trust metric and the credibility of newspapers as a medium which goes a long way in connecting the audience with advertisers.
Moving on to Ms. DivyaKarani, Mr. Ahuja asked her whether the current growth is going to last and whether it will lead to a change in the composition of economic metrics, to which she responded that it was too soon to comment.
She said that the traction is driven, in many ways, by very specific trends which have been there for a long time. “Media is a great leveller.”
“Consumers in metros and non-metros are almost in parity, notwithstanding certain nuances. Non-metros mimic metros, and in some cases, surpass it. For example, two-wheelers and televisions,” Ms. Karani clarified.
She added that the lower penetration of durables and consumables translates into the fact that there is much headroom in the smaller towns.
In reading the data, Ms. Karani cautioned against base effect and the trends, which are an outcome of the metro lockdown and the agriculture upsurge: “We need to monitor carefully what is happening.”
Mr. Ahuja asked Mr. Shirish Agarwal about the changes in the growth metrics the consumer durables industry is undergoing Mr. Agarwal replied that the sector was the fastest to bounce back in the new normal.
“When the market started opening in July, sales grew by 20 per cent, and as the festive season concluded, there was 35 per cent growth across categories,” he stated.
As per Mr. Agarwal, this is due pent-up demand as people who were not able to buy during lockdown made their purchases later. There is a need for comfort, convenience and multi-tasking, and with limited domestic help, consumers are looking for appliances that can ease their life and this has boosted sales.
“In metros, we see people opting for the premium range post-Covid. But when you come to tier-II and tier-III towns, it is incumbent upon the brands to expand their lineup to cater to the needs in these markets,” Mr. Agarwal articulated.
He also went on to say that one must also introduce products at the right price point so that they can convert the needs into a purchase.
Bringing Mr. Mohit Joshi into the discussion, Mr. Ahuja asked him about his work with marquee clients and their thoughts on economic recovery.
Mr. Joshi concurred with the other panellists as he went on to confirm the growth being witnessed by the agency’s clients from Bharat. He gave the example of brands like MPL, Dream11, PhonePe, Khatabook, Swiggy, Oyorooms, Philips Lighting, Voltas Beko, Hyundai, KIA, among others, which reaped the benefits of demand from non-metros.
“This growth is there to stay because metros are saturated, the competition is huge, and the complexities of the consumer are also huge,” Mr. Joshi proclaimed. He said that 2021 should see a good response from non-metros.
Mr. Satyajit Sengupta, when asked about the insights on change in advertising patterns in smaller markets, said that many advertisers had to forcibly look beyond the metros as non-metro markets were coming back faster.
“Auto, FMCG, durables, mobile phones, everything seems to have sold in non-metros over the last few months. What we took out was that advertisers are looking at the huge potential now, which they were not earlier,” Mr. Sengupta elaborated.
He said people are trying to understand these markets and customize products, and their role is to facilitate this understanding and provide a higher return.
“A big way of sustaining this is to give confidence to advertisers that there is a huge market beyond metros. That is our endeavour,” Mr. Sengupta said.
He shared that the newspapers have been delivering a massive response in a budget which was less than before, as advertisers were deprived of hefty budgets. They managed to devise solutions and discovered that the newspaper was providing a good response.
He said that his newspaper was tracking app downloads, and the number of calls that they got after an advert ran in the newspaper.
“We understood our own products and markets much better. It is now up to us how we translate this understanding, this delivery mechanism, and help advertisers utilize this potential in a better way,” Mr. Sengupta concluded.
With print experiencing growth, Mr. Ahuja asked Ms. Karani her thoughts on print usage in vernacular markets and where things were headed.
“We need to give marketers credit in reading the market. Media mix is constantly evolving and sifting. Reading through contrarian trends is what marketers need to do. There has never been a more exciting time to be in media and marketing because it is constantly changing,” she said.
She added that though media penetration is increasing, there is a deficiency of trust as media was supposed to be the bellwether of reporting things, but we see so many cases of fake news being spread. For Ms. Karani, it has moved beyond English versus Language debate now.
Mr. Ahujathen asked Mr. Shirish Agarwal about the impact of Covid on the relationship between print and consumer durables segment, as the category has been advertising in the medium quite considerably.
Mr. Agarwal said that every touchpoint plays an important role in the decision-making of the customer. It can be divided into three phases: pre-purchase, search, and purchase.
He added television works best in the first stage as it gives the maximum reach but print helps in the first and final stage where you can announce the offers immediately.
“But the search stage is very important for consumer durables because they know they are locking themselves for a longer period of time. And these days, this search is happening on digital platforms,” Mr. Agarwal told Mr. Ahuja.
Mr. Ahuja asked Ms. Sethi to delineate the ways in which language newspapers can take advantage of the opportunities provided by the disruption of Covid-19.
She said that Covid has shone a spotlight on these markets, which were hitherto unknown, but that one must not talk of them as if they are a new subject.
“Marketers are going where the business is and it does not matter whether it is metro or non-metro. I am glad this opportunity came about and the need has been discovered. It behoves the advertiser to feed that need,” she added.
She said she is looking forward to the budget and government initiatives in these markets,
Towards the end, Mr. Ahuja asked everyone what 2021 holds in store in terms of advertising spends.
Mr. Iyer said that spends and growth are expected to move northwards with a recalibration of market prioritizations, as the customer in non-metro needs greater awareness about better value propositions.
“From an urban perspective, digital adoption is getting expedited. So it is about offering features like the convenience of loan at home or making payments online. In non-metros, it is about looking at a better alternative,” said Mr. Iyer.
Mr. Sengupta informed that 90-95 per cent of the revenue of FY19-20 has come back and he is hoping that it touches 100 per cent in the next few months.
He will be looking at providing the best services efficiently as more advertisers flock to them and take the products to the audience. He also intends to focus on delivery on a sustained basis so that advertisers are instilled with confidence.
Mr. Joshi said that this was a year of hope and it will lead to an increase in spends at large. “I am hoping this year gives back our days of glory or at least pre-Covid levels. We have got positive indications from our clients so the marketing budgets should be back.”
He added that the year will be of meaningful media, which would mean more purposeful campaigns, regional content, targeted content, mobile and vernacular content, along with trusted forms of communication.
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