Advertising & Practical Thinking

The advertising profession is cold and cruel. The power of practical thinking is a perfect antidote.

Wednesday, February 21, 2007


Just returned from a trip to India.

Found the country to be so different from just two years ago, when I was there last.

India has changed. All for the better.

Yes, the major metropolitan areas -- New Delhi, Mumbai (Bombay), Madras (Chennai), and Bangalore seem to be more crowded. There is a simple reason for this. Villagers from surrounding areas migrate to the cities with hopes of finding jobs – domestic, construction and other forms of labor.

Another form of migration has been that of international brands. Practically every major (and not so major) brand is available today in India. Not just in the major cities but also in the remotest little towns and villages. I was in the northeast corridor (where India is surrounded by Bangladesh, Bhutan and China) for a few days and was pleasantly surprised to find anything from Gillette’s Fusion razors to Dove shampoo at tiny roadside stores.

The Indian retail sector is very different. Only about one percent of retail sales originate from the organized segment. The rest is from small to tiny stores that are one or two-man operations. However, the landscape is beginning to change.

Shopping malls are emerging in all the major cities. They are filled with practically every major US retail chain. These malls have become the place for the younger generation to hangout every evening. And just like in the US, strip malls are emerging.

Luxury goods manufacturers have found a brand new market. Nokia sells a handset at $10,000. Louis Vuitton is going to open a manufacturing plant in the southeastern city of Pondicherry. This facility will serve India and the rest of Asia.

Supermarkets are sprouting all over the country.

Wal-Mart is entering India in collaboration with an Indian company later this year. It is not sure if Wal-Mart will be the dominant (if at all) brand at the storefronts.

The transportation sector is growing at a phenomenal rate. Those who were riding bicycles are now riding scooters. Those who were on scooters are now on motorcycles. Women on scooters weave their way through the crowded streets. Middle class families have at least one car per household.

One of the things that amazed me was the vast improvement of the air quality, especially in Delhi. High polluting vehicles have been banned. A most rigid emission control system has been instituted that has contributed dramatically to the improvement.

Every major Japanese motorcycle manufacturer and automobile manufacturer has their brands manufactured in India. Ford is in India and GM plans to manufacture 200,000 cars starting in 2008.

The highway system is beginning to fall in place. I was driven down the Bombay – Pune Highway for about 75 miles. For the most part it was like a drive on any Interstate in the US.

In Delhi a brand new underground train system has been completed, and has won the acclaim of practically every mass transit system across the world.

Less than 20 years ago, there was only one domestic airline and that was owned and run by the government. Today there are nearly a dozen private airlines. Even the Delhi airport has been privatized. Domestic airline travel is projected to grow at an annual rate of nearly twenty percent and it is projected that the domestic airlines will be ordering nearly 400 new aircrafts before 2015.

The telecommunications sector in India has the highest annual growth rate in the world. Within a few years, there will be over 500 million cell phone users.

Construction of residential units, office complexes, and hotels is growing at a staggering rate. Because of soaring real estate costs, hoteliers are constructing four and five star hotels so that costs maybe recouped at a faster rate by charging higher room rates. Condominium (called “flats” in India) values have appreciated by 300% in just the last three years.

But all is not necessarily rosy. There are problems. Basic infrastructure development is behind schedule. There is congestion and with the increase in motorized transportation, navigating the roads is difficult. There are power and water supply problems. However, these are problems that have been recognized and solutions are being found.

India. A land of over one billion people, with nearly 450 million who are middle or upper middle class. A land of opportunity.