Q&A | From East, consumer insights

The China India Consumer Insights Program, an initiative of the Yale Center for Customer Insights, was established by Professor K. Sudhir last year. The program’s first annual conference will be held this weekend, April 3-4, at the School of Management, featuring speakers from various business schools and international firms such as McKinsey & Co. and Infosys Technologies. Sudhir sits down with the News to discuss the drivers of the new program and how consumerism in China and India may exert gravity over the United States in the future.

Q: Why did you decide to establish the China India Consumer Insights Program?

A: People are often interested in China and India mainly because of the idea that these two countries export a lot. But the reason we are expecting a lot of growth is these places is not because of exports, but the promise of internal consumption.

First, we wanted to establish a multidisciplinary approach to understanding the consumer. Such an approach would involve economics, sociology and psychology. There was not any particular group or program that would excite people to do this kind of work, and we wanted to have a forum where you would have people coming from 30 different disciplines. The second goal of the program that we are keen on was to establish interactions between practitioners and academics in the U.S., China and India, and one way of accomplishing this goal is the annual conference. This year we will have the first conference here in New Haven, and we hope to host the next one in Beijing.

Q: The program’s Web site states four research issues of interest: Consumer behavior, savings and investment behavior, decision-making in organizations, and impact of China and India on the rest of the world. Could you clarify what you mean with the last one?

A: The basic idea is something we should really think about: For the last 50 years, the U.S. basically set the rules, but now the world is more willing to listen to what the Chinese government has to say. It is important to understand this as a result of the change in consumption patterns of the Chinese and the impact it has on the rest of the world. It would be interesting to take the changes happening on the macro level and think of them in micro terms. It is useful to start people thinking about these questions, although we may be far away from answering them at this point.

Another benefit of studying these economies is more think. The Tata Nano car produced in India, for example, can potentially inspire American carmakers to produce and sell at lower costs.

Q: What are some of the differences and similarities between China and India?

A: There are a couple things that we should definitely consider. The major similarity is that India and China are like Europe — not like the U.S. — because they both have very diverse cultures. In terms of differences in macro level, the Chinese are ahead in terms of every economic indicator. It is ironic because when these countries gained their independence in the 1950s, India was ahead, but it did not take China long to catch up, and the wealth is more distributed in China.

Here, cultural factors are also important, particularly the issue of economic inequality. Because of its communist past, China presents all its citizens, including men and women, with equal economic opportunity. On the other hand, India has a more unequal social structure, and it is difficult to engage the big number of Indians occupying the lower end of the social ladder in the economy.

Comments