MUMBAI: Post Covid the urban middle class, once the cornerstone of the consumer goods market, has become the smallest cohort. In contrast to Urban, Rural is buoyant and is increasing consumption, bolstered by good monsoons in 2024 and diverse income sources. What shapes aspirational brands is their perceived ‘difference’. Driving ‘difference’ at a brand level will be critical. Going forward, media planning must begin with consumers and their media consumption habits and preferences. While Gen Z remains a key target consumer segment for many brands, brands must avoid against broad generalisations.
Kantar, a marketing data and analytics company, today released its ‘India at Crossroads’ report, offering a look at the forces set to shape the future of marketing in India in 2025. The report draws on insights from Kantar experts, supported by extensive attitudinal and behavioural data. It provides critical guidance for marketers navigating a rapidly evolving landscape marked by social and demographic shifts, unpredictable consumer sentiments, and the continued acceleration of technology.
Key strategic recommendations for marketers in 2025:
– Recenter Brand Narratives on culture and people: Focus on creating meaningful differences that resonate with consumers’ evolving identities.
– Adopt a dynamic media planning approach: Balance campaign reach with cost efficiency, adapting to the distinct attention characteristics of various media channels.
– Stop treating Gen Z as one monolithic cohort: Move beyond demographic generalizations and uncover the nuances to craft relevant and winning experiences for Gen Z.
– Explore consumer identity intersections: Avoid oversimplified assumptions; identify deep motivations and uncover new growth opportunities by understanding the complexity of consumer identities.
– Harness the power of democratised access: Utilise digital platforms and develop relatable stories that connect with diverse consumer segments.
– Balance influencer and digital advertising: Integrate influencer content with traditional linear TV digital ads to maximise brand awareness and purchase intent.
Kantar envisions three possible scenarios for India’s future in 2025, ranging from a continuation of 2024’s trends to significant economic disruption or more rapid growth. Whatever the macroeconomic challenges, to capitalise on emerging opportunities, brands must focus on sizing the intersections of consumer identities and building brand difference. In doing all this, storytelling will remain key in connecting to consumers; while the way stories are told may evolve, emotions will remain the glue that binds them.
Kantar foresees the following trends influencing winning brand strategies in India in 2025:
1. India’s Socio-Economic shifts
Post-Covid, India’s socio-economic landscape has altered significantly. The urban middle class, once the cornerstone of the consumer goods market, has become the smallest cohort. Real incomes have been under pressure leading to stagnating consumer confidence. Consumption in the urban areas has slowed more sharply than in rural regions.
2. Positive Rural Sentiment
In contrast to Urban, Rural is buoyant and is increasing consumption, bolstered by good monsoons in 2024 and diverse income sources. There is a surge in spending on small indulgences such as soft drinks and convenience products. This is fuelled by growth in adoption of digital services – both payments and openness to online commerce. According to Kantar’s Rural Barometer 2024, Digital Payments have grown from 38% in Dec 22 to 43% in Jul 24, E-commerce Delivery from 14% to 23% and Gaming Platforms from 4% to 12%.
3. Aspiration driving premiumization
India is in a demographic and cultural sweet spot. Smaller families, women practicing self-love, and Gen Z establishing their own identity are all driving aspiration. But the mix of aspiration is changing and so are the entry points in the aspirational ladder. What shapes aspirational brands is their perceived ‘difference’. Driving ‘difference’ at a brand level will be critical.
4. The Attention Economy and Media Consumption
Indian consumers continue to split their time between traditional and digital media, but levels and quality of attention vary by channels. The different attention characteristics of media channels and their reach, influence the role of media channel in the purchase funnel. It is a trifecta of Incremental Reach, Attention and Expected Brand Outcome that has implication not just for the media mix, but also for communication and creative developments. Going forward, media planning must begin with consumers and their media consumption habits and preferences.
5. Rethinking Gen Z: No Room for Broad Generalizations
While Gen Z remains a key target consumer segment for many brands, Kantar warns against broad generalisations. This demographic is highly diverse, and their motivations cannot be fully understood through simplistic or algorithm-driven personalisation. Successful strategies must focus on understanding the intersectionality of Gen Z’s identities and motivations to craft relevant experiences that truly resonate.
Deepender Rana, executive MD, South Asia, Insights Division, Kantar, commented, “As we look forward to 2025 and beyond, India indeed finds itself at a crossroads. This year has proven to be a challenging one for many brands and categories, with volume growth slowing down and consumers unable to take further price hikes. Yet, some brands and categories have prospered, growing shareholder value 1.5 times faster than average, by driving meaningful difference and connecting deeply with consumers. Through this report, we want to inspire brands and arm them with the data and insights needed to break through a general slowdown and be winners.”
Soumya Mohanty, MD, chief client officer, South Asia, Insights Division, Kantar, added, “The future of marketing in India will be the ability to embrace complexity and make trade-offs. The need to avoid generalisations and creating own data and insights will provide the competitive edge as we move forward into 2025.”
