‘Let’s think about what should be the centre of gravity of ‘global’… it has got to be us, India and China’

Because I am sick and tired of everybody discussing the India opportunity and the Indian market from the lens of economics, or macro economics, or capacity, sales, industrial production — from the economics of the supply side basically. I’m saying that markets are made of consumers. I’m saying to companies that your topline is equal to how many people buy, how much they buy and at what price.

I want to put the focus on the fact that the Indian market opportunity is about people. So let’s look at people.

• What are the myths about Indian consumers that MNCs must tackle in order to win in the Indian marketplace?

The first assumption is that emerging markets like India and China are much like what developed markets were 20 years ago. Like what America was 20 yrs ago. And that they will follow exactly the same trajectory of development that the developed markets did once upon a time. I think that’s completely incorrect because never before in the history of humanity have you had so many poor people subjected to so much aspiration, so much communication, so much real time technology. Also, never before have you had such a big mass of people who have actually seen their incomes rise.

What this means is that my child today will not play with a Rubik cube though that may have been what an American child played with 20 or 10 years ago. My child will go straight to Internet games. If you put this through the rich country, poor country filter, it doesn’t work.

I’m saying let’s think a little bit about what should be the centre of gravity of ‘global’. Lots of MNCs tell me they will now work with global standards and global solutions and I say to them that if you just look at the data on where the future economic and demographic growth will take place, the centre of gravity has got to be us, India and China.

• But surely companies have found for some time now that the Indian market has not behaved as they initially expected it to. What’s prevented a change in strategy or a mid-course correction?

I would say it’s a mindset that what we do in the West is actually the global standard and everybody will do it. If I’ve already invented it and if I’ve already proven it and if I already have all those investments, then why do I have to reinvent the wheel for you?

So just the notion that you have to start doing it completely differently here means that there is a cost involved, an effort. I think C.K. Prahlad says it very well: MNCs will change the emerging markets forever, but the reverse is also true. Like a cola company’s model worked in Mexico, it worked on Poland, so the assumption is it will work here. But it won’t work here because there are just not enough outdoor toilets and people will not drink more cola. The GDP may grow, but the number of outdoor toilets perhaps may not.

• You say the small consumer at the bottom of the buying pyramid plays a significant role. But why should companies invest in the bottom of the pyramid?

A fundamental point in the book is that the demand structure of India is different. We’re a lot of people, consuming a little bit each and that adds up to a lot. That’s why we are like that only.

In the bottom of the pyramid, there are 600 million or more people, earning less than a dollar a day. But together we control almost 30 per cent of a trillion dollar economy. So there is money in the bottom of the pyramid. There are lots of people consuming a little bit each, who live in the boondocks and who are hard to reach.

They are important because they are financially worth it. They are important because the rates at which our incomes are growing, they will soon be your point consumer.

If you build loyalty with them today, they will be with you in the future. And I think they’re also important because if you can make the quality if their life better then isn’t that what business is all about?