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27 November, 2014 04:23 IST
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Source: rss | 27-Nov-14
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As India's economy continues to grow, shopping habits are evolving in kind, particularly among Low-Income Value Explorers (LIVE), a group once referred to as the ''deprived'' class. The LIVE demographic is mobilizing to become First-Time Modern Trade Shoppers (FTMTS), according to Nielsen Research

By 2015, Nielsen estimates that these two segments alone will drive an additional USD 3 billion of Fast-Moving Consumer Goods (FMCG) sales in India.

Adrian Terron, executive director, Nielsen India details the unique characteristics of LIVE and FTMTS segments and outlines the strategies necessary to grow them.

An estimated 10 million LIVE households live in urban India, earning an income of less than Rs 72,000 annually. Spending one-fifth of their household expenditures on FMCG (USD 2.4 billion), this massive growth segment is expected to contribute disproportionately to FMCG growth, rising by 50% in the next three years to USD 3.6 billion.

''Confident and buoyed by a sudden rise in incomes, half of LIVE households have already migrated to branded products,'' said Terron.

''For manufacturer and retailers, this move is not about share gain, but rather expanding the base for branded product sales. With an increasing number of shoppers still forming their relationships with brands, more than half are predisposed to in-store influences, and 40 percent like to try new things. Now is the time to create and continue a relationship with this shopper segment.''

''For shoppers seized by aspiration and insecure about their well-being, modern trade is an indulgence that imparts a sense of progress. Today, five percent of their household budget is spent at modern trade, which is expected to grow to reach USD 175 million USD by 2015,'' Terron added.

Nielson suggests strategies to win with First-Time Modern Trade Shopper (FTMTS):

Simplify the navigation. Retailers can help new shoppers overcome the anxiety of being overwhelmed by too many in-store interruptions.

Make product connections. Clear associations between similar and complementary products remind shoppers to consider and buy them.

Offer the right range. With nearly one-in-two shoppers looking to switch brands, category assortment strategies help align consumers with changes in brands and packaging.

While new and premium products are the routes to drive loyalty to modern trade, the arrangement of products on the shelf will differentiate retailers. By redefining the range of assortment and winning the confidence of the FTMTS, retailers can expect to gain an additional USD 100 million annually.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.


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