Waking up to the Dhoni effect

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With the growing rich and middle class spilling beyond the metros, the face of the urban market place is steadily changing. The report, The Dhoni Effect, identifies a phenomenon where rapidly growing smaller towns are taking centre stage. The research by Ernst & Young highlights the growing affluence levels, increased awareness due to media penetration, improved physical connectivity and significant changes in consumption patterns with high aspiration levels in smaller towns that are now compelling marketers to take notice of the needs of this growing marketplace.

For the purpose of this research, the country was divided into four sections—the six metros (Mumbai, Delhi, Bangalore, Hyderabad, Chennai and Kolkata), the Key Urban Towns (KUT) which are the twenty two cities for the purpose of the study, while the Rest Of Urban India (ROUI) constitute urban cities other than KUTs.

So far, the urban growth story has been largely driven by metros. But this is now moving beyond into other towns that mainly include KUT and ROUI.

According to Ashok Rajagopal, partner, Media and Entertainment Practice, Ernst & Young, “We are witnessing a whole new opportunity in the KUT and ROUI where the rising affluence levels and changing consumption patterns are opening doors to service the new aggressive opportunity. As a result, Indian marketers are remapping their spends to better align themselves with this paradigm shift in the demographic focus.”

Though the metros still score the highest on the affluence index, KUT are found to be half or three-fourth levels of the affluence of the six metros. While individual KUT towns do not score as high as metros, in terms of relevant population, the high scores on future growth potential push up the KUT in the overall ranking. Hence, the analysis highlights that high potential for KUT, such as Chandigarh and Jaipur that rank higher than metros like Chennai and Kolkata.

The report also brings to fore, a slight disconnect in terms of cities that are growing faster/spending more and indicates where the advertisement spends are going. Metros, which constitute about 30% of the approximately Rs 74,000 billion consumption market of the 100-odd cities mapped, however still garner the giant share of the print spends analysed.