This is the third in a series of entries that Alfred Romann will post from India in the coming weeks.
As India’s middle class grows, it creates new markets for a whole range of consumer goods, from mobile phones to cars.
For manufacturers across the globe, the prospects are bright. After all, there are some 700 million poor people across the country and they are all potential buyers if their incomes grow.
All these people have more pressing problems than when they will buy their first microwave oven but that’s a discussion for another post.
Despite – or maybe because of – widespread poverty, India has incredible opportunities for mass producers like China. Corporations such as Haier are expanding their markets by leaps and bounds powered by growth that is expected to hit close to 10% this year.
However, Haier’s ambitions come up against a deeply-held belief on the streets of Delhi, Mumbai and Hyderabad that Chinese goods are cheap and poorly made.
It is interesting to note what Indians buy as they grow richer.
Market studies by Haier, a successful global supplier of home electronics and white goods, show that the first thing on the shopping list is entertainment, most likely a new or first TV set. Second is a new set of wheels, maybe a scooter. Third, finally, is a refrigerator. Air conditioners are somewhere below, and microwave ovens feature well down the list.
It is an unusual pattern, but one directly linked to one of the biggest challenges facing the country: poor infrastructure. What good is a fridge that only works the few hours a month when the electricity is on?
Better to have a TV and snatch what valuable hours of prime time are available.