In India, the Unilever towers over all other consumer product brands. Procter and Gamble is starting to make some gains having responded to the needs of the Indian mainstream. Its Gillette Guard razor, for example sells about 44 million units a year. At a retail price of just 30 cents per razor. Blades cost 10 cents. This seems low until you note that India’s largest selling brand, according to GCI Magazine, sells at 3-4 cents a blade.

What this means

To play in the mass market in India, you need to design and sell product that meets the needs of the Indian consumer at their wallet size. This does not mean making shoddy product, but rather using the best minds to squeeze costs out of every aspect of manufacturing and materials.  We call this approach frugal engineering or frugal design.

Timex  is considering making India a global sourcing base to reduce manufacturing costs, a senior executive said. Currently, Timex has its global manufacturing hubs in Hong Kong, China and Japan. “A high-level team is working on a project to identify what all can be imported from India and what will be the cost benefit,” said V.D. Wadhwa, managing director, Timex Group India told the Daily Mint.

For Middlebury, CT based Timex, which operates across 100 countries, India is the only geography where it has a design center and a manufacturing base catering to the local market. Wadhwa said it is important to manufacture in India and meet part of the global requirement with the appreciation of dollar and higher wage costs. Manufacturing in China is no longer cost-effective.

What this means

For supply chain executives,  who wish to diversify beyond China, India is becoming increasingly interesting.

In American today there is a bit of a rush toward India. “The 1.4 trillion dollar economy, growing at 7 percent. They like India. The last three US presidents have visited India, much more so than before.” All this is true.

But some foreign companies have been doing business in India since the early 20th Century. (And I don’t include the colonials of the British East India company).

General Electric supplied a hydroelectric plant in over a hundred years ago. And Nestlé began India operations in 1912.  According to Consumer Goods Technology,Nestlé’s first sales agents in India began work in Chennai and Kolkata in 1912. Today, the company directly employs 6,000 people in India  and tts products are sold in more than 3.5 million outlets across the country. Nestlé recorded sales of CHF 1.4 billion in India in 2010. Its most popular brands are Maggi, the country’s leader in instant noodles, and Nescafé instant coffee. I grew up in (admittedly tea-drinking)north India thinking that coffee and Nescafe were the same thing.

What this means to new entrants:

You’re the new kids on the block in India. Be prepared to pay your dues before you can succeed. In most markets in India, there are smart local and foreign companies who can run you over if you don’t go fully prepared and with good advisors.

India : the 3rd largest men’s luxury jewelry market

Fancy bracelets, rings, studs and chains are fast becoming part of the fashion statement for India upscale city-dwelling males, who have already added fairness creams to their repertoire. The following comments are excerpted from The Economic Times

Jeweler C Krishniah Chetty & Sons’ managing director Vinod Hayagriv’s workstation is a vantage point for the goings on at his diamond boutique in Bangalore. “Take a look around the room,” he says referring to the number of men at the store. “Men are probably much more comfortable participating in jewelry shopping now than ever before.”

“Wearing light-weight gold jewelry is becoming a fashion amongst youngsters,” says Rahul Singh, retail and marketing head at Kolkata-based Shree Ganesh Jeweler House, which recently rolled out a men’s jewelry range under brand Gaja.

No wonder then that India has overtaken the U.S. to become the third-largest men’s luxury jewelry market in the world according to researcher Euromonitor International. The researcher estimated the Indian men spent almost $200 million on this sector in 2011 and may increase their spend by as much as 36 percent in the next year.  “Although it’s a niche market, it is growing. Nobody can ignore it now,” says GR Radhakrishnan, MD of GRT Jewellers, which pegs his share of men’s jewelry at 20-25%.

“The metrosexual man is driving this demand,” says Orra Director and CEO Vijay Jain. Men in their late 20s and 30s are the biggest consumers, say jewellers. More men are independently venturing into jewelry stores today than ever before.  Many are there to buy gifts for their partners.

For top diamond jeweler Gitanjali Group, men account for almost 42% of its sales. The average purchase value of these consumers has also doubled in two years while spending by women grew by 20 percent. A senior executive at Forevermark, a De Beers brand, says that most of these independent purchases are being made on Hindu fall festivals such as Karva Chauth and Dhan Teras.

As GRT Jewelers’ Radhakrishnan says, “It seems men today do not lose as much patience as they did at jewelry stores earlier.”

What this means

Men in India don’t necessarily behave like men in other BRIC countries or in the West. Also today’s urban men behave differently from their fathers and even their older brothers.  Not so long ago, most jewelry in India was custom crafted by small store owners. Western companies addressing categories that affect both men and women, would be smart to question their basic assumptions before making investments in India’s consumer market.

When I immigrated to the United States, one of the snack foods I began to enjoy was microwave popcorn. My American born kids grew up with it during their elementary school years. But we missed it on trips back to India. Some time ago, we began finding ACT II popcorn on the shelves in major Indian cities. This is a product of Nebraska-based giant ConAgra Foods, Inc. and they entered the Indian food market  via a minority investment in India’s Agro Tech Foods Ltd (ATFL).

A few weeks ago, ConAgra   became the majority owner of ATFL) increasing its ownership of shares to more than 50 percent, through the $10 million purchase of existing shares from a third party.

“ConAgra Foods has enjoyed a strong partnership with Agro Tech Foods, dating back to 1997, and we believe strongly in its business model and leadership team,” said Gary Rodkin, CEO, ConAgra Foods. “Expanding our International business is a key part of our strategic plan, and India represents an attractive growth market for ConAgra Foods. We will continue to work with Agro Tech’s management team to expand its business and our investment in this important region.”

Agro Tech Foods is a public  company that markets food and food ingredients to consumers and institutional customers in India. The company’s products include Sundrop branded edible oils, shelf stable pudding and peanut butter, Crystal branded sunflower oil, Healthy World branded dried green peas, and, based on a license from ConAgra Foods, ACT II branded popcorn.

What this means

Sicne Agro Tech Foods has enjoyed consistent EPS growth for the last five years,  from 6.60 rupees/share in 2007 to 13.04 rupees/share in 2011 and since the company reported an 11 percent increase in net sales, and a 26 percent increase in profit after tax, it was not a bargain buy for ConAgra. But I think it is a sensible purchase given the projected growth in consumer packaged food sales in India over the next decade.  The middle class population and the spending per capita are rising to create a virtuous spiral that your company should probably also consider!.