India’s consumer market has often been dismissed by the world, and often enough, even by its own business elites, as “has potential, shows promise, but not there yet”’. To be fair, India’s sales pitch for foreign investment in the first two decades after liberalisation focused on the future potential of its consumer market and maintained that while it was still small, it was guaranteed to explode soon. But today, three decades after liberalisation, even when the performance of India’s consumer market has fulfilled the promises made about its potential on so many counts, the verdict and label of “not there yet” have not gone away.

The “not there yet” verdict is usually based on milestones and metrics created by global business consultants, who believe that there is a universal path of evolution hence a singular pattern of development that all markets in the world follow. India has defied this theory and evolved and developed in its own way; and because it did not match up to the global norms of what a developed market should be like, it did not get the benefit of the doubt or the investment depth it deserved. For example, conventional wisdom has it that there is a globally proven threshold of average per capita income that a country must have for its consumption/consumer markets to take off and on that count, India is seen to be not there yet.

However, several successful big and small businesses in India have stood this flawed idea on its head, and innovated products and business models to crash the cost of supply and offer consumer-delighting performance at consumer-affordable process, profitably. This has enabled consumption to “take off” at far lower per capita income levels than ever experienced by the developed world.

To take another example, India’s retail environment has often been dismissed as not being evolved enough because of the millions of small so-called mom-and-pop shops spread around the country. Everywhere else in the world, small shops gave way to large-format modern physical retail very early in a market’s development journey. India has performed poorly on this metric of market evolution. Its mom-and-pop retail shops continued to flourish, grow and serve consumer needs better using cell phones, WhatsApp and digital payments. Distribution supply chains went digital decades ago, making even the smallest, remotest shop’s sales and inventory visible. India has leapfrogged and mostly bypassed the era of large-format physical modern retail.

The same small shops are now networked and even more digitally empowered, and are being serviced by a new breed of digitally smart wholesale distributors offering a range of services that are value-added and increase return on investment (ROI) for all the participants in the chain. All this is happening alongside vibrant e-commerce and the hybrid “phygital” business model (e-commerce platforms supplemented by networks of small stores) is emerging as the way to win in the Indian market of the future.

“Not there yet’ was also the verdict given on the Indian consumers’ sophistication and ability to appreciate the value of brands, based on the metric of (poor) sales of global brands which are famous elsewhere. The fact is that India has had an increasing number of successful home-grown brands in both B2B and B2C markets that consumers perceive as adding more value to them. The Indian market has been seen as yet to develop because it is mostly below the developed market norm, or even the norm of other emerging markets, when it comes to the per capita consumption of a range of popular consumer goods, like breakfast cereal or Tetra Pak milk. The fact is that Indians have less expensive options for both that they perceive as being better. Yet India laps up global brands of cell phones.

Another popular metric of consumer evolution is the extent of the Westernisation of a culture. India has been a laggard on this metric because it has practised, over millennia, how to absorb external influences and evolve in its own unique way. Market analysts have often commented on the slow transition of Indian women from traditional Indian wear to Western wear, using that as a metric of consumer modernity. What they miss is the fact that a near-universal modern Indo-Western look has emerged across India comprising knee-length or longer tunics worn on top of leggings or various kinds of Indo-Western trousers. Indian women have already embraced, en masse, the benefits of convenience and mobility of Western wear while retaining the social and physical comfort of traditional Indian wear.

Indian and global business analysts have constantly benchmarked and compared the Indian market to other markets in the developed Western world or to Mexico, Vietnam or China and pronounced it to be “not there yet”. In the meanwhile, India has evolved in its own leapfrogging, indigenous way and marched to the beat of its own drum. It is amply proven now that the Indian market will never become like ‘someplace else, somewhere else’. It is also very clear now that the ugly duckling Indian consumer market, contrary to expectations, will not transform into the familiar beautiful swan of Western developed markets; instead, it has transformed into its own version of a big, valuable ugly duckling. It needs to be understood on its own terms and not in comparison to any other place or based on any stock theory of market evolution. As CK Prahalad wrote in the foreword to the first book of this series, We Are Like That Only: Understanding the Logic of Consumer India, “Consumer India has its own logic, listen to the logic of Consumer India, from within.”

Excerpted with permission from Lilliput Land: How Small is Driving India’s Mega Consumption Story, Rama Bijapurkar, Penguin India.