• Puranika Narayana Bhatta

Broadening Of The Base

‘Global Cities by 2035’, an Oxford Economics publication has become quite well-known. Its prediction that the Top 10 fastest growing cities in the world over the next 16 years, will all be Indian, has ensured its popularity in our country. Rate of economic growth in cities with smaller bases will be faster than extremely large city-economies. However, what grabbed my attention was the diverse set of cities in the list, across multiple states and with widely different current sizes. So, we reviewed searches on our ‘locator’ platform, to see if data from the last two years, support such possibilities.

What is happening across states?

At the country level, like-to-like enquirers have grown by 40% from Jan-Jun 2017 to Jul-Dec 2018. Rapid growth of data connections on mobile phones is definitely a factor in enabling this growth in absolute numbers. It gets interesting when one does the first level of drill-down at the state level.

  • The Top 8 states have remained the same in this period.

  • As is to be expected, Maharashtra and Karnataka lead the charts due to higher disposable incomes, coupled with higher internet awareness in these states.

  • However, Uttar Pradesh and Tamil Nadu with their large populations with increasingly higher disposable incomes and internet awareness, have started to become larger portions of the pie.

  • The most important observation is that enquirers from beyond the Top-8 states has grown from 27% to 33%; an implied growth rate of double that of the top states.

What is happening within states?

Now we examine if the broad-basing trend holds good within states too. Let us look at the state of Tamil Nadu, which not only moved into the Top-3, but increased its share of the pie too. We find a similar pattern.

  • The large industrial towns of Chennai and Coimbatore lead the charts due to higher disposable incomes, coupled with higher internet awareness in these states.

  • Districts beyond the Top-8 have increased their share of the pie from 21% to 28%, clearly indicating that there is a broad-basing of locator queries.

In state after state, we find that this theme of ‘broad-basing’ repeats consistently.

However, each state is quite different in the ‘breadth’ part of the ‘broad-basing’. We noted that Karnataka was second across the last couple of years. Here too districts beyond the Top-8 grew from 9% to 14% in the period under consideration. However, Karnataka’s peculiarity is the dominance of one district. Bengaluru’s share in this period has reduced from 80%, to 73%.

What is happening within a city?

We examined data from Bengaluru across 124 areas in the same period.

  • While Bengaluru dominates the proceedings in Karnataka, no single area within the city contributes even 10% of the enquirers

  • Hotspot maps to the ‘IT Corridor’ comprising areas of Electronics City, HSR Layout, Bellandur, Marathahalli and Whitefield; areas coupling higher disposable income and technology savviness

  • However, one can see ‘older’ Bengaluru areas like Indiranagar and Jayanagar continue to be important

  • Visually, one can see lesser dominance of a few areas on the map of Bengaluru; as apartment complexes in newer areas of Bengaluru get occupied, brands are setting up their stores and getting enquirers in these areas.

Depending on the target audience of a brand, the area for growth may be a Vijayanagar with about 5% of the population or an area like Rajajinagar with almost 30 colleges. It is evident that a brand with the right mix of tools and people, allowing very granular analysis, can truly deliver ‘hyperlocal’ experiences and to capture market-share. This is especially so, as caution needs to be exercised while using data at aggregate level for driving granular decisions. As an example, we have found customers using apartment units as a proxy for population. In a city where 15%+ of housing units are unoccupied, several peripheral areas have vacancy rates of 50%+. So, execution at granular level didn’t match plan.

From most of the data we have examined over the last few years, it is clear there is ‘broad-basing’ of the enquirers across our ‘locator’ platform and hence of economic activity. However, anyone looking for a cookie-cutter approach across states or districts or cities of India, needs to tread with great caution. While a strategy can be broadly global, execution needs to be truly ‘hyperlocal’.