‘Young Consumers have Smart Perspective on How to Spend Money’
--MANI RAJ DAHAL ,Country Manager ,The Nielsen Company Nepal Pvt Ltd
It is very important to assess how the market is doing and what the current trends of consumption are to revisit the consumers. Nepal is still an unexplored market in many fields and, therefore, it offers possibilities of market expansion to companies. It is worthwhile to mention here that the spending and consumption habit of consumers are positive in Nepal, despite the huge political problems the country is going through.
Rising Consumerism
There is a tremendous potential in the country for companies to expand their products and services.
The swelling consumerism has seen the introduction of a range of new products like ready-to-eat snack foods, breakfast cereals, textures vegetable protein foods and so on. Different brands of the same item and attractive packaging vie for the consumers’ attention.
Spending Capacity
The increased spending capacity of consumers is really a good sign in the Nepali market. The inflow of remittance and tourism have contributed to increase the income of consumers. The purchasing power of consumers has a direct impact on the market expansion.
Every investor asks some questions before starting a business: how big is the market and what are the possibilities of growing? And the scenario in Nepal is not so bad. Though Nepali market is not that big, there’s enough room for new companies and brands.
Youth Focused Market
At present, the consumption of Nepali young generation forms a thriving market. Young consumers are usually impressed with branded and quality goods and services then being purely price sensitive . Companies and service providers can take advantage of this to further set up their brand image.
The young generation enjoys a staggering amount of purchasing power in the country due to foreign employment and inflow of remittance. Young consumers not only have money, but also have smart perspectives on how to spend money.
Consumerism and Socialisation
It is really interesting to mention here that Nepali culture has changed over the years due to technology and consumerism.
Our socialization process has changed, compared to some years ago. Lifestyle and consumption habits are considered to be the main reason for the socialization and it is obvious that the process of socialization has changed throughout the last one or two decades. For instance, we can take café culture, business in Valentine Day or may be English New Year.
Nepali Products
Entrepreneurship is something that will help the country to achieve sustainable development. The chances of entrepreneurship are very high in Nepal, all we need is creative minds and creative ideas. In Nepal, the chances of branding local products are very high. Nepali people are very much habituated to consume Nepali food and drinks trend and young entrepreneurs can establish Nepali brands of that sector. The typical Nepali style goods are also making their brands .
Price Hike Impact
It is an interesting fact that in Nepal, despite the frequent price hike of Fast-moving Consumers Goods (FMCG), the market has not seen a drop in the demand of such goods. This indicates that consumers have got the capacity and are willing to pay more for the products of their choice of consumption.
Products of High Demand
• Lifestyle products
• Gadgets
• Essential commodities
• Fuel
• Automobiles
‘When you build your own brand you are able to command a premium rate’
--JOYDEB CHAKRAVARTY ,Managing Director ,JWT-Thompson Nepal
Some experts say that Nepal is still an untapped and unexplored market. Do you agree?
Nepal was first country in the region to be exposed to international brands. Some 30 years back, India did not have the access and exposure to the brands that were here in Nepal. Nepali consumers have always been exposed to these kinds of international brands for last 30-40 years. So, when local brands try to enter this market they find it a challenge because consumers benchmark it with international brands that they have already used. It could be in any category, but the consumers give it a fair trial and if it does not meet their expectations then they have no hesitation in rejecting it. The Nepali consumers are very discerning indeed!
Can you please tell us some major differences in the consumers’ behavior in the past and present?
Today the consumers have a different kind of exposure because of the reach and penetration of the international media. This has had very large impact to the consumers’ psyche. When you look at the way people dress, we see they are following the world’s leading trends. Nepali consumers’ tastes and trends have evolved over the last couple of decades. Look at the way they have embraced new technology, new gadgets and even smart phones. Look at two wheeler sector, earlier people went for something functional but not anymore. Now they want a higher-end bike to go with their perceived self-image. People have a much higher level of aspiration now, and want to show that through their material possession.
What are the practices of the companies regarding study of consumers’ buying behavior in Nepal?
Client and organizations in Nepal are talking about research. Although, they might not always employ a professional research agency, they might want to do research in-house, through their own team, which is not the right way to do it, but it still goes some way. Earlier there a few companies who actually believed in market and consumer research but that’s changed. We now see that clients and companies are talking about research, which is a very positive sign.
How is the branding practice in Nepal? How important is branding from your perspective?
Branding has caught on over the last two decades. Everything now seems to be branded. I am just not talking about the consumer goods, but commodities which at one time were sold loosely are now branded. Companies have now come to realize and appreciate that when you build your own brand you are able to command a premium rate.
What is the media consumption habit of Nepali consumers right now?
If you see the ownership in the durables likes colour television (63% in 2012 Vs 13% in 2003), radio, refrigerator and mobile phones have drastically increased. Ten years back the national media was primarily radio based but today there are more people watching television than listening to the radio. Obviously radio has not been able to catch the imagination the listeners, while television has caught on despite having more than 350 FM radio channels in Nepal. The print too have taken its toll, readership has gone down over the last ten years even though literacy has gone up. The reason could be the high cover price of newspapers. The usage of the internet has gone up drastically from 2% in 2002 to more than 25% in 2012.
How do you envisage the importance of advertisement to catch the emotional side of consumers?
If you are unable to connect with your customers on an emotional level, you will not be able to engage with them meaningfully. Consumers today have many interests and they are not waiting to see your advertisements! Unless you are able to make an emotional connection with your customers; make your advertisements distinctive, emotional, entertaining and engaging otherwise you cannot hope to catch their attention.
What are the contributing factors in the quality of advertisements? What are the reasons behind low quality of advertisement in Nepal?
Over the last few years the quality of advertisements has not matched the expectation of the Nepali consumers. There are many reasons for that, no one wants to take a ‘risk’ and everyone wants to ‘play safe’. Companies feel that if they come up with a “creative” advertisement it might go over the head of their audience. There is very little the advertising agencies can do in that kind of a scenario. This is also compounded by the severe shortage of creative people in the advertising sector. Moreover, top quality advertising production – especially films cost huge amounts of money. The market here is very small compared to other countries in the region.
