Feature | Businesses signals slowdown; Will it impact the advertising business...

The last few months have seen a lot of up and down happening on the economic number scale in the West. As another recession looms over the western nations, slow growth there, is bringing in inflation in the Indian economy. Reports and experts suggest tighter working bands post the festive season in India.

Adgully caught up with people from a cross section of businesses and sectors to get a 360 degree perspective on the projected slowdown, its effects on product launches, advertising spend and marketers' minds and strategies.

Himanshu Chakrawarti, CEO, The Mobile Store is of the opinion that the projected slowdown will have different effects on different industry. "As the GDP softens, pressure will increase or decrease marginally on each sector. Sectors like food and groceries will continue to work and spend as usual, since they deal with basic needs that need to regularly spoken about. Also, some other sectors like mobiles and electronic goods will continue similarly, but spends will later depend on sales post the festive season as well", he said. Adding further Chakrawarti said, "On the other hand, luxury and semi ' luxury segment along with automobiles will be affected to some extend or may be even show a sizeable decline."

Leading to an interesting tangent, a report published in The Economic Times highlights that the Indian luxury market grew at a healthy 20% during last year, reaching a size of $5.8 billion, despite signs of the reemergence of a global slowdown, (CII-AT Kearney report on Indian Luxury). The luxury electronics and car segments have seen a growth of above 35%, while fine dining has seen a whopping 40% growth in this period. All of these segments have seen higher growth than expected in the last one year. Apparel and accessories, watches and personal care have also seen robust growth, between 24-30%.

Dirk Dedekind (Head of Marketing), BSH Home Appliances Pvt Ltd Head at the India launch of Europe's largest home appliances brand strongly puts his point, "The fact that we are launching in India right now, clearly indicates that we do not see a slowdown. We believe that there is an affluent section in the market, in cities like Bangalore etc, who see the benefits of the products usage and secondly, compared to our other competitors, we are not that unaffordable." Speaking from the marketing point of view, Dedekind said, "Our launch before the festive season is a prudent decision because this is the time when a lot of buying decisions happen. Thus, launching in a quiet period does not make good business sense."

Reports and experts suggest tighter working bands post the festive season in India. Skepticism is creeping in the businesses in terms of new product launches and spends quantity and patterns. Speaking on this point, Dinesh Jain, CEO, Hover Automative India Pvt. Ltd said, "If one looks at the overall market, it has been slowing down due to the higher interest rates and high inflation rates. But being a new entrant in the country, for us the opportunities are tremendous. Yes, such temporary hurdles will effect in the short run, but we are here to stay for long. That is why, one would see that with the launch of Nissan Sunny, we have not changed any of our plans, even in the product launch per say." Pointing that their advertising and marketing spends will be as the market demands, Jain further added that, " We are not going over the top or very conservative when it comes to advertising, since it's a new product, and we have lots of hopes form it. But post the festive season, we'll have to wait and watch about the apprehensions and projections made on the Indian markets."

In an attempt to get a media perspective to the point of discussion, Adgully learnt that cynicism or uncertainty in terms of product launch or advertising spends is not any issue for media businesses. Anooj Kapoor, Executive VP & Business Head SAB TV said, "From October end till December we have a very aggressive launch pattern with 2 -3 new dailies in the line ' up. Over all, the economic scene is a little weak as of now and post Diwali, there may be even a huge drop in the advertising spends. However, looking at the GRP and TVR charts, we are an advertising medium that come across a safe and steady option and therefore they continue to invest with us. Also, we offer the advertisers a unique platform to appeal to the entire family and male centric TG in one go. With this distinctive combination, whether spends are more or less, it does not affect SAB much."

On similar thoughts, Ashish Bhasin, Chairman, India, and CEO, South-east Asia, Aegis Media said, "I think India will not see a recession, but there might be some elements of a slowdown. The growth may slowdown, for a quarter to two or maybe evens a year. But it won't be a recession as it's projected. The period from October to December is very crucial and needs to be monitored very carefully. If it pans out as expected (from a consumers buying and purchasing patterns), then we are on a healthy track. But if for some reasons there are any hurdles, then we shall definitely feels its impact for more than 2 -3 quarters."

Thus, with a bag full of mixed opinions and thoughts, it is only a wait and watch game that all, consumers, business outfits and advertisers need to do to understand and design their strategy and roadmap, not only for the next quarter, but the next year as well. | By Ankita Tanna [ankita(at)adgully.com]

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