At the start of the year, I had made five predictions for 2024. Now that we are in the middle of the year, let’s see how they are panning out:
Prediction No 1: India GDP to grow 6 pc and global GDP to grow around 3 per cent.
As we hit mid year, the forecast is even better for the Indian economy. According to the RBI, it is predicted to close at 7.2 per cent growth. A poll of global economists puts it at 6.5 per cent. A lot will depend on the next two quarters. Meanwhile, the UN World Economic Council says the global economy will grow around 2.6 per cent. Indian GDP growth concern is consumption. We are not seeing consumption grow as fast. This is a result of retail inflation at 4.7 per cent of which half is constituted by food. The bright spot continues to be GST collection. Last year total GST collection was ₹20.18-lakh crore, which is about ₹1.6-lakh crore every month. Gross tax revenue grew by 13.5 per cent which is very good. This means that the economy is getting more formal now and penalty of bad governance is high. This will favour brands over price in the long run and we will see opportunity to build many B2B brands. The communications industry should see this as their next big opportunity instead of pitching for the same brands and accounts as they do today.
Prediction 2: Sensex to hit 80,000 by December 31, 2024
I under called this. The Sensex was 72,240 on January 1, 2024. On July 1, it was 79,476. This is a peculiar trend where the top 30 companies are lifting the market, their profits are good, but we are not seeing significant investment and significant job creation.
Banks are doing well as NPAs are coming under control. Bank’s gross NPAs are at an all-time low of 2.8 per cent.
All the CEOs say they need thousands of people, but we don’t see thousands being hired. These pronouncements seem to be more for effect. If someone were to analyse all the investment announcements made in various state investment forums, various job creation announcements and check the actuals, we will be in for a rude shock.
According to CIE, unemployment is at 7.6 per cent in March 2024. The stock markets seem insulated from other data points now, but sanity must replace exuberance sooner than later.
Prediction 3: Freebies will dominate politics and marketing. Abuse will be high
This is true on every account. The Election Commission of India has accounted for $550 million in cash this year vs $400 in 2019 elections. The most common freebies involve bus travel, rice, and electricity.
Marketers are doing the same. I look at ABC — attitude, behavior and commitment. Freebies in marketing aim to change behavior in the hope of affecting attitude and gaining commitment. This is clearly not deliveringfor brands and every brand is in overdrive on promotions.
Ideology for a political party and what the brand stands for are important. You cannot stand for promotion/discounts only. The cheapest is never the most popular over time.
Abuse has hit a new level. Abuse in politics has been bad these elections. The worst abuse however was for Hardik Pandya, and it was just wrong. Now there is a tendency to abuse anyone who has a different point of view. And ex cricketers are leading the charge. Anything an Englishman says, or a Pakistan ex cricketer says is fodder for abuse. At the root of this is tribalism. This emotion around tribalism is crossing the line. If we don’t watch out, we will have English football type hooliganism.
Prediction No 4: Smart Housewife
The housewife is spoilt for choice and is the most wanted consumer for brands and service providers. She is playing extra smart as she divides her attention between brands, never giving her brand loyalty to anyone for a long period of time.
However, marketers continue the old stereotype advertising around housewives. They need to think of a new paradigm as the 30-year-old housewife is dramatically different today. The first step marketers have taken is to show the housewife in an attire other than a saree. Can they now do a mindset change please!
One data point for consideration by marketers – Double Income no kids (DINKS) families are growing by 30 per cent per annum. This is not an urban phenomenon; this lifestyle is adopted by 42 per cent of rural nuclear families compared to 22 per cent of urban families (Source: Gitnux market data)
Prediction No 5: The Employee Employer Relationship
While the job market is tough and 40 is the new 50, employees have more control than ever before. Employees seek flexibility as a given, flexibility around working hours, location and days at work.
When employers do not offer flexibility they have attrition, especially amongst women. Every employee needs to be pampered and loved today; the old hierarchy approach of power distance will not work in days to come.
Engagement is low across sectors and some sectors like Edtech have been burnt. It is a fact that more than 50 per cent of employees need reskilling immediately. Either they will do it on their own or a company can invest in them. A company investing in them has a better chance to retain them.
I believe the employee is the master of choice today.
(Shiv Shivakumar is Operating Partner at Advent International)