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Madhukar Sabnavis: The Indian middle class

Is this class disappearing or getting redefined?

Madhukar Sabnavis 

A few years ago, my wife and I were returning home in a Honda City, after watching a Manna Dey concert and dining in an Italian restaurant in a five-star hotel, to our two bedroom owned apartment in central Mumbai when my wife innocently said, “We are very middle-class people”. It made me wonder that if we are middle class, who is upper class? Deeper, is middle class a demographic definition or a psychographic one? Is calling oneself “middle class” in India a badge everyone enjoys wearing irrespective of their earning and lifestyle?

In any unequal numerical distribution, there will always be a “middle” — either by the mean or by the median. The shape can vary from an “hour glass”, where the middle bulges to a “pyramid”, where the middle is a smaller size to the larger lower base and yet bigger to the convergent top. However, the truth is that in any “free, capitalist” society (maybe in any system, perhaps), people want to move up in life and there is continuous push for every group to move up. Simultaneously, the people on the top have the urge to do better to distance themselves from the rest. So, to define a middle class by income earned is always possible. And to affix a number to it is equally easy, once the arithmetic is done. But is this actually the middle class and what’s special about this class? Why is this group so special to everyone — sociologists, marketers and administrators?

When India opened up in 1991, the big attraction for marketers — both national and global — was the “big Indian middle class” estimated to be anywhere between 300 to 400 million and growing. The rich were anyway enjoying many of the western comforts even pre-liberalisation. As product markets have grown over the last two decades, many marketers have tapped not only this group but more — a segment of people below — that which have either moved up or been reached by more suitable product offerings. In fact, the number of rich has since then grown too. There have been many discussions on whether the Indian middle class has lost its values with consumerism and the acquisition frenzy, and what needs to be done to ensure that the class retains its core. In fact, an eminent sociologist on a TV programme recently defined the middle class as the “carriers of values and upholders of culture” — underlying within this thought the self-imposed burden on the middle class to remain where it is and restrain itself from the better things in life.

There is often confusion between “Indian” values and “middle class” values. The importance of “family over individual”, “hierarchy over equality”, “co-existence over cooperation and competition”, quest for “education and power over wealth”, “celebrating sacrifice and duty over success and achievement” — are all more “Indian” values rather than really “middle class”. Moving up the income chain doesn’t necessarily mean abandoning these values. Study the richer families — the proprietary-run business houses that have acquired lots of wealth — and they adhere strongly to many of these values.

This brings me to three values that have particularly come under the scanner in the last few years — austerity, integrity and humility. Austerity has taken the biggest beating with growing consumerism. However, “austerity” was a middle-class value of compulsion rather than choice. Indians have always enjoyed the good things in life — Lakshmi is worshipped on Diwali — and it was only the Victorian-Gandhian era that made it a glorified virtue. And it continued to be celebrated in a scarcity economy. Once unshackled, it’s not surprising that the Indian middle class felt liberated to enjoy and spend in the last two decades. Similarly, integrity is a relic of the Gandhian/scarcity era. “Means justify the ends” has always been the Indian principle of living — Krishna and Chanakya are the cultural icons of this. Jugaad has always been part of our lives. Ostentatious consumption has always been frowned upon in Indian society and continues to be seen so. The biggest spends are reserved for occasions solemnised by society like marriages and childbirths — and that remains true and will continue to remain true of Indians across income classes. Humility continues to be a value that is cherished in the world of consumerism.

Finally, one interesting truth about Indians — we are very assimilative. Just as India socially and culturally, over the years, has been able to absorb and adapt the best of different religions and nation states into our way of life, economically too India has, over the last two decades, been able to take in western products and customs and adapt them to our own use without losing our values. Joint families have given way to extended nuclear families; arranged marriages have evolved into arranged love marriages; pizza has become paneer tikki pizza and dark chocolate has become bitter-sweet rather than just bitter! This will continue to happen.

If marketing is a mirror of society, an interesting thing is happening in India. It’s happened in the US. The mid-market in many categories is feeling the squeeze. Consumers are either trading up to better quality products delivering higher order benefits or trading down to more basic products where the performance price equation is more favourable. With the emergence of technology that is democratising quality, there is a need for constant innovation to ensure higher price brands deliver more value. This trade up/trade down is determined by the category’s importance to the consumer. While mid-market brands continue to be big because of historical, “habit” reasons, they have a clear choice to make — move up or move down. In the 90s, most marketers looked at India as a three-price-point market — price, value, quality — now it’s moving towards two. Is this a reflection of the disappearance of the “traditional middle-class market”?

As India evolves, it appears the middle class, as we have known it in the second half of the 20th century, is disappearing. Across India, people are looking to better their lives materially and moving up the acquisition chain — demanding more, wanting better products and living richer lives. Indian cultural values, however, will not disappear as people move up. Desire and values can and will coexist and it’s important for sociologists to accept it and live with it rather than bemoan it. For marketers, it means there will perhaps be just two segments — quality and price — and a rich culture that can be dipped into to connect with consumers.

Something worth thinking about.

The author is country head-discovery and planning, Ogilvy and Mather India. The views expressed are personal. Comments at: madhukar.sabnavis@ogilvy.com

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First Published: Fri, September 03 2010. 00:37 IST
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