Western brands face a new challenge. Their consumer markets are facing constraint and austerity. People want more from products at less cost. How can a brand innovate under these circumstances?
They should look to India, according to Navi Radjou, executive director of the Centre for India & Global Business at the Judge Business School at the University of Cambridge.
‘If you can innovate in India, you can use the same model to innovate anywhere in the world,’ says Radjou. And now these Indovators are inspiring Western brands.
The key is getting the right combination of market drivers. ‘Indian innovators are like mixologists,’ says Radjou. ‘They mix four key ingredients: diversity, liberty, connectivity and scarcity.’
Diversity points to the wide difference between the rural and urban population. Liberty refers to the democracy of Indian politics. Connectivity is about how the population is now highly connected with mobile phones. ‘There are a mind-boggling 700m mobile phone users in India,’ says Radjou. And scarcity refers to how healthcare and education are still lacking around the country.
‘The result is a cocktail like dynamite,’ he says.
Some brands already have this mix perfected, he believes. ‘Companies in India are coming up with cancer vaccines at a fraction of the cost of those in the West. And they are available to a large number of people too.’
Technology brands are indovating too. Mobile manufacturer HTC has targeted the Indian market with its handsets that use the Google Android operating system. This open-source system lets people personalise their devices more than with other, closed systems. ‘People need this customisation,’ says Radjou. ‘HTC is selling like hotcakes in India.’ Another Indovator is the Nano car brand.
More, for less, for more
As well as the correct mixture of ingredients, there is also a key formula. Indovators create products that have more value, at less cost, for more people, or M4L4M – a term originally coined by engineer Dr R A Mashelkar.
Now, in an age of austerity, this principle has a significance beyond India. Indovation is being reversed. ‘The Western model of innovation has been about adding more features to products, which are then sold for more money,’ says Radjou. ‘But now people are interested in the opposite. Frugality and affordability are becoming important in the Western mindset.’ As a result, brands need to come up with a solution that has more value, at less cost, for more people.
LS:N Global explores how Western brands are being inspired by innovations in emerging economies in our Anarconomy Decade macro trend.
Top five take-outs
1: Get the right innovation mix. Think of the balance between scarcity of resources, connectivity, liberty and democracy.
2: Learn from Indovators. Western markets, in an age of austerity, have much in common with India.
3: Create more value, at less cost, for more people. Frugality is creeping in, and consumers want more from the products they buy.
4: Design from the bottom up. Design simple, intuitive and cognitively fluent products for the masses.
5: Think about customisation. How can you create value through products that can be tailored to individual needs?