Cavelossim Beach, Goa, India
07 April 2008
Top media and advertising executives are touting the rise of the India's smaller cities and towns as the country's fastest-growing consumer market. Raymond Thibodeaux files this report for VOA from Cavelossim Beach in the southwestern Indian state of Goa.
This is GoaFest, an annual three-day event in which the leaders in media and advertising present awards for the country's best ad campaigns and talk about marketing trends. But there does not seem to be much talking going on at the moment, just loud music and dancing as the sun dips into the Arabian Sea.
This year's theme is the rise of India's smaller cities and towns. When it comes to selling cell phones, televisions, cars and condominiums, industry analysts say that smaller cities and towns are the country's fastest-growing consumer markets, nearly double that of India's largest 10 cities.
For some analysts, it is a sign that India's economic boom is starting to filter down to the lower middle class and the poor.
Jagdiv Bakshi is the main organizer for this year's GoaFest. He also heads Contract Advertising agency in Mumbai, ranked as one of India's top ad agencies.
"What is really working here is basically human ambition," he said. "I mean, all human beings love to look after their own, do well, be praised, all those good human values. I think people in the small towns have the same ambition as people have in large towns. They just want to do better and better and better. And do better for their children. Given that India is the happening story of the moment with [nearly] 10-percent GDP growth, I think it is the smaller towns that are growing faster than the metros. And that is what India's story is about at the moment."
A recent market analysis by Ernst & Young showed that after the 10 largest cities, India's next 25 population centers, such as Bangalore, Hyderabad, Pune, and Thiruvananthapuram, are fast becoming key consumer markets.
Ernst & Young says the hottest-selling item in the smaller cities is skin-lightening creams for men. In the past two years, skin-lightening creams have ballooned into a $75-million industry.
Apparently, that surprised many in the advertising industry, but not Kamal Basu, who heads the India branch of the advertising conglomerate Saatchi and Saatchi, which handles Oil of Olay and other name brand grooming products.
He says that in India, fair skin conveys status.
"We have done a lot of research in this area and it is all about appealing to the opposite sex," he explained. "It is, 'How do I make myself attractive towards the opposite sex?' And fair [skin] is a big, big driver in that space. What is emerging new is the variety of grooming products: hair gel and various skin lotions and things like that. And people spending far more dollars than they were earlier on grooming products for themselves."
Whether it is skin-lightening creams or mobile phones, more and more of India's advertisers are finding it difficult to ignore small towns.
India's six largest cities garner about 60 percent of advertising revenue, estimated at roughly $3 billion. But as the fortunes of the country' smaller cities rise with the economy, that is bound to change.