Less Likely to Have a Civil War or Be on the Losing Side of a World War Than is China
Capitalism and Cow Worship
by Sala Kannan
[I recently spoke to] Perumal, our old cook from India.
As youngsters growing up in India, my mother always warned, "Perumal won't be here forever, you girls have to learn to cook." She worried that hiring help around the house was getting increasingly difficult. No one wanted those jobs anymore. What would we do if Perumal left? [...]
Perumal worked for my family in India for 26 years, [and now works for a restaurant in Malaysia at a much higher salary, to put his daughter through college. Said he], "maybe I'll come back to India someday and start a restaurant. It's not like before, you know. Everyone wants to eat out these days. I'll start a nice vegetarian restaurant." [...]
Perumal is right about it not being like before. The Indian middle class has grown so affluent that they can easily afford to eat out more often compared to a decade ago. In fact, according to a McKinsey report, the Indian food industry grew faster than the information technology industry over the last 10 years.
The fast food industry in India is even bigger business. India's fast-food industry is growing by 40% a year and is expected to generate over a billion dollars in sales this year.
Perumal is also on the money with his "nice vegetarian restaurant" idea.
My [former] cook, who has never set foot in a school, who knows nothing about marketing, has got it right.
Let me explain. Consumerism is big business in India. There will be 628 million middle-class Indians by 2015. And already, their net income has doubled over the last 10 years. Obviously, every multinational company now wants to sell in India. Some companies have failed and others succeeded.
The ones that failed did so because they were not sensitive to the cultural factors that affect consumer behavior in India.
Kellogg's introduced corn flakes in India in 1995. But the product failed miserably. It achieved less than 20% of its initial sales target. How could Kellogg's have gone wrong? Corn flakes are cheap, more and more Indian women are working and don't cook breakfast anymore, and people want a nutritious yet quick meal, right? Kellogg's seems like the perfect answer. [...]
Why, then, did Kellogg's suffer years of losses in India? [...]
Indians consume differently. Just like how what people buy in any country is defined by local culture. [...]
And in this case, Indians like HOT milk in their cereal. Kellogg's cereal is made for cold milk and didn't hold up to hot milk. It became soggy. Nobody wanted to eat it. For years, Kellogg's struggled in India. It was only after revamping its product and making a cereal suitable for hot milk that Kellogg's became profitable in India.
So here are some cultural quirks multinationals should keep in mind when marketing in India:
1. Indians like hot cereal.
2. Most Indians worship cows; part of the country is vegetarian.
3. Indians don't kiss (at least not in the movies).
It was point No. 2 that my cook Perumal drove home. You see, not only are many of us vegetarian, we are a cow-worshipping, non-beef-eating lot. About 20% of India's population is completely vegetarian, and about 82% does not eat beef.
Yet McDonald's revenue in India has grown a whopping 50% annually since 1997. How does McDonald's, the world's largest BEEF-based food chain, thrive and flourish in cow-revering, vegetarian India?
Enter the Maharaja Mac. A 100% ground lamb burger served with lettuce, tomatoes, special sauce, cheese, onion and pickles on a sesame bun. Other items include the Chicken Maharaja Mac, the McVeggie and the McAloo Tikki (with potatoes). The vegetarian items are advertised with a "100% pure veg" stamp on them.
Seventy-five percent of the McDonald's menu in India is Indianized. In 2001, McDonald's also introduced the Veg Surprise burger, a veggie burger with Indian spices. Not surprisingly, sales volume shot up 40%.
As for the flagship Maharaja Mac and the McVeggie, not only are they profitable, they are also politically correct burgers. Indian political activists are always eager to protest again so-called "cultural imperialism." And foreign-based fast food chains are easy targets.
Take KFC, for example. After an ambitious start in the late 1990s, KFC scaled back its expansion plans after major protests. KFC was accused of using illegally high amounts of MSG and frying its chicken in pork fat (India's 150 million Muslims don't eat pork). Activist groups protested outside the restaurant in Bangalore. [...]
KFC now has just one restaurant in India.
McDonald's has 58 restaurants in India[...] As Managing Director of McDonalds India, Vikram Bakshi says "When you go into any country, very clearly, you have to understand the culture; you have to understand how you intend to be relevant to the consumer in that country. I don't think any brand, no matter how big it is, can take the market lightly. And I think the biggest mistake is when you think you have a big brand and that everyone is overwhelmed by it."
I only know a bit about India, and not all of what I've learned is positive.
However, they are democratically organized, and there is at least a segment of Indian society that's forward looking, modern, and technologically-oriented. As Ms Kannan writes, Indians are rapidly becoming wealthy enough to have a consumer society, and Indian demand for gold jewelry was so great last year that it pushed the global price of gold above $ 500 an ounce.
If they can avoid having a nuclear war with Pakistan or China, a robust, creative, wealthy, technologically-advanced, friendly nation of a billion people will be a major driver for the benefit of humanity in general, and the U.S. in particular.
Think Japan times five.
The same might be true of China, if somehow China can peacefully transition to a modern nation - India's big advantage over China is that they're already a (mostly) modern nation, just a currently poor one, like the Czech Republic or Hungary.
China is more technologically advanced than is India, with the Chinese having better ICBMs, the ability to design and build their own computers and aircraft, and even a crewed space programme, the third-best on Earth. (Although their uncrewed space programme is rubbish).
However, their future potential is clearly much more stunted than India's.