By Kamlesh Tripathi

maggi maggi1


What MNCs should know #MaggiRecalled

High lead content in Maggi. Has sent Nestle into a tizzy of a lifetime. Vigorous tests are on, in the food labs of India. Soon anyone’s bluff will be caught if not already. And, it is not only for Nestle. But a reminder for all MNCs. That gone are the days. When you could serve a sub-standard and obsolete product in India and get away. But now the equations have altered and tables have turned.

    Today the literacy levels in India are at 74%. Most Indians, when they walk into a store have already made up their minds. About what they are going to buy and why. Consumer laws too have firmed up, even when they may not be as pungent as the US.

    India over the years has become a very attractive and money spinning sub-continent market for any MNC. With its newly rich population and the population explosion. In some ways it fares even better than the markets of the US. In fact serving the Indian market is like clocking a revenue equivalent to serving half of Europe. When we milk the geographical advantages of India’s neighbours.

    The Indian population as per 2011 stands at around 1.21 billion. Out of which around 830 million is rural and 380 million is urban. As compared to the total US population of 319 million. So, even our urban population is higher. Than the total population of the US. Our urban distribution is at 69% and rural 31%. Quite favouring, a smooth flow of goods and services across the sub-continent.

    With a population of 1.25 billion. On an average every seventh person in the world is an Indian. This has extrapolating advantages when you sell in India. In terms of scaling up a brand, brand recall or even name recalls of niche segments in prominent SKUs. And a big chunk of Indian population, are expats and NRIs. To them what is sold at home is acceptable in foreign lands too, from day one. So, a MNC, even gets a ready export market should it want to manufacture in India. Where, labour and cost of infrastructure is way below the western world.

    Although India’s population is three times that of the US. Its land area is only 1/3rd of the US (India 3287590 square km—US 9857306 sq km). That makes India a much more compact market than the US. Where, distribution costs are much lesser. And, an even more gleaming factor would be the population density. That directly triggers footfalls, and consequentially sales. The average population density of India is 364/km as compared to the US which is 90/square miles—again a favourable tilt towards India.

    Summing up. In times to come. Such large markets in confined clusters. That will give high footfalls will be a rarity. Therefore Indian consumers and markets need to be treated with a lot more prestige and seriousness by MNCs. As days are not far, when operating headquarters of many MNCs will move closer to the bulk of their consumers. Where, only China and India will be their likely destinations.

    So, MNCs should move around with bags. That have single pockets, and not bags with too many pockets or hidden pockets for various countries. As transparency is the wholesome virtue in present times. And last but not the least. The golden goose is very much there. But the MNCs shouldn’t try to kill it for short term gains.

    And brand ambassadors of MNC products. Need to verify complete details, before they sign up for any product.





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