India's vast cultural and regional differences result in distinct consumer demands, even within seemingly identical product categories, including the pressure cooker or the ceiling fan, and this poses challenges for businesses operating at scale, said Anuj Poddar, Managing Director & CEO of Bajaj Electricals, on Wednesday.

Share Market Live

NSE

Speaking at the PwC CEO Dialogues hosted by CNBC-TV18, Poddar said: “All my growing up years in Mumbai, I had seen pressure cookers with a lid that goes inside. If you go to the south of India the lid is always outside.”

“I don’t think it has a fundamental difference on the cooking but the south Indian homes will have a lid on the outside, in the western homes, they will have lid on the inside. So that changes the whole mould, the R&D, the supply chain etc.,” he said.

He noted that the diversity in consumer preferences extends beyond pressure cookers and mentioned even the ceiling fans, whose colour, speed were factors that consumers saw differently in different parts of India.

“Even the fan that will sell in south of India will not sell in north of India and vice-versa. Consumers have their strong preferences and behavioural tendencies and beyond the functional needs there are these diversities that exist,” he said.

This diversity in consumer behaviour poses a challenge for companies seeking to cater to a wide range of preferences while operating at scale, he said.

“I look at McDonalds product and then I look at the local restaurant Shiv Sagar which has such a long menu. How will Shiv Sagar ever become McDonalds? If I want to give everything to everybody, I will never build a company of scale. So we need to find a confluence between this need to personalise and yet operate at a scale at some kind of common homogenous platform or whatever we call it.”

A wish for reviving demand

A pause in interest rate hike and inflation could push up demand and spur spending among people in the next two quarters, hopes Poddar.

Citing his company’s strong Q4 results, Poddar said this had come against strong headwinds. Demand was not there and we had to really work hard for it.

He said that they discovered that the per capita GDP was not really a proper metric to gauge demand and found that median GDP was a better metric.

“The top 1% is consuming. The median is not looking so rosy. That’s where the challenge lies. Can we get the median up rather than the average? That’s when we unlock the demographic dividend,” he said.

Poddar then noted that the interest rate hikes in the past several months had hurt the common man’s pocket. Net disposable income has come down due to this.

Also read: Bajaj Electricals Q4: Healthy growth, Rs 500 crore fund raise, Rs 4 dividend declared

In this regard, he said he wished for a status quo on the rate hikes and inflation. If done, this would improve demand and people could be seen spending in one or two quarters.

(Edited by : Pradeep John)

First Published:May 24, 2023 6:47 PM IST