There’s a flurry of activity in the marketplace involving brands, and marketers are leaving no stone unturned in getting their mantras right. Realising that consumer attention spans are getting weaker, brands are doing everything in their might to keep them more engaged than ever. Enter the research agencies, who have been deployed with the task of unearthing unknown facts and coming up with solutions that would have a way with the consumers. One such firm that’s making headway in the Indian market with its offerings is Synovate. Synovate is the market research arm of Aegis Group Plc that works in generating insights to help clients drive competitive brand, product and customer experience strategies. Synovate is among the top four custom market research companies globally and among the top three in India. The plan right now, according to Mick Gordon, MD, Synovate India is to scale up focus on the Indian market and make it a force to reckon with. In conversation with Johnson Napier, Mr. Gordon discusses his plans for the company and how India is on course to becoming a major gateway market for the company, globally. Excerpts…
Q] How would you analyse the growth of Synovate in India in the year 2010?
The research industry has been growing well throughout in 2010 and we were excited about growing in excess of the rate of the industry, which was approximately 20 per cent or so.
It was also an exciting time for opportunities for India looking outside. Our core business here is delivering market research services in the Indian market. A lot of it is for the international clients while a significant proportion is for the local clients. There is also another factor which is actually providing services to our Synovate business around the world. Globally, Synovate has staff strength of 6000 people and we are present in 64 countries, with the most recent office being opened in Vietnam. We also acquired the largest independent agency in Russia to make us one of the largest agencies in Russia.
We are also very active in a number of other markets – Brazil, China – which is a huge business for us, and, India.
Q] You stressed on Synovate laying more emphasis on international clients compared to local – what’s the split ratio between the two?
We’ve got to be clear as to how one defines local versus international clients. There are Indian clients who are effectively international; there are global clients who have such a substantial presence in India that one may call them local. For example, Hindustan Unilever – that’s almost a local business in itself. Then you have businesses that are primarily based outside of India but asking for research to be done in India. So depending on how you cut it, over half of our business comes from businesses that have a global component. It’s not unsurprising; there aren’t many research agencies who can even pretend to provide a global footprint. So those businesses are going to come to agencies like Synovate. There are the others but we pride ourselves in being the most integrated, globally. Our very key focus of the business is to enhance the global integration and provide genuinely unified services to businesses wherever they want to do their research globally.
Q] What makes India a standout market for Synovate?
One of the good things about the Indian market is apart from the growth story, we are also utilising the expertise and capabilities that are available in India to service the rest of the Synovate community globally. In Bangalore we have a staff of over 100 people; we’ve upsized for the third time in the city in a year. We are also expanding in Mumbai and Delhi. What is striking about India is that we have an incredible wealth of intelligent, highly skilled young people.
Q] What are the drivers that have fuelled the growth of research agencies in India?
There are multiple drivers for growth in the Indian market. Our business here is really about providing market research services in India. The driver for that growth is fundamentally the incredible increase in interest in the Indian market. That is driven by the growth and financial wealth being generated here and also relatively much lower growth in other markets. In absolute terms, perhaps there’s much more money in Europe but in terms of opportunity there’s much more opportunity for growth and new business in India than in markets that are relatively stagnant.
Q] Which are the categories that have been delivering above-par growth for Synovate in India?
Healthcare has been doing well for us. Automotive – private vehicles, commercial, agricultural vehicles have been reporting robust growth. The other key market for us is the fast moving consumer goods or the packaged goods market. We have been the traditional players in that space for a long time.
Also, we pride ourselves in being experts in testing new products, new concepts across a wide group of packaged goods and also consumer durables as well. There is a lot of money being spent on television sets, computers, ACs, etc so lots of work for companies from Korea, Japan, etc.
Another strong area for us is the financial services area for the same reasons – lots of money around, lots of people earning money, lots of young people who want to enjoy the products of their hard work and Banking Services, Loans, Credit cards are important in facilitating that. And this trend is not just in the metros but in the rural areas also.
Q] In your opinion, have clients woken up to the importance that research agencies bring to the table?
I think there is a huge thirst for expert analysis. We do a lot of work for global businesses that are present in India. So some consistency in terms of the tool they use for measurement are very important. So for example, our brand value calculator is finding increasing acceptance amongst clients. In particular we are finding that it’s a very important tool where we have client partners that want to use that tool across the whole of the globe. The same is true about our Market Quest tool which is our key product test tool. Actually for a global market agency like Synovate, it is actually about getting more and more effective and providing consistency across the globe – that’s what we are about and that’s what we want to deliver. We also have complimentary services in a number of other areas. We have some specialist solutions in terms of segmentation in terms of qualitative research – looking at motivation semiotics, which is very exciting. The relevance of this to India is that there is a huge appetite for that kind of stuff.
Q] How do you see Synovate moving away from the metros and reaching out to consumers in tier 2, 3 towns and rural areas given that the action for marketers has shifted there?
One shouldn’t underestimate the continued significance of the big tier 1 towns and even tier 2 but there are a number of clients that are looking out right into the rural community. We’ve always had a big presence that stretches right across India. We have field centres in 14 locations across India. From those field centres we have field teams that work out in rural communities within states locally. That’s something we are continuing to develop because when you are working with agrochemical businesses, with social research areas the community you want to talk to are out and active in the rural area. The other ways of reaching the consumer is by telephone, mobile, internet, etc.
Q] Are you leveraging the digital platform well enough to promote your wares?
We use social media at several levels. We do research projects which are specifically designed for the digital environment. Creating communities to talk about product services, the brand experiences, etc. We’re working with some media companies where we are helping them understand young adult Indians. A lot of that work is done via digital media because that’s a great access point. We are also using digital media as an output, as a communication with our client. So it’s a very powerful and growing tool. We also have large dedicated community panels for some of our products. But it won’t in the short term be a substitute for research by any means. Probably some low income groups or from the rural setting or some of the old income groups who are not going to get a hold of digital media. Such times we prefer meeting them face to face.
Q] While research agencies play an integral part in decision-making process for a client, what are the challenges that impede your survival in India?
The foremost challenge is that of developing enough skilled resource – the business is growing so fast that it’s a challenge for all of the industry and inevitably there is a degree of cannibalisation because of this. We have a very large PG intake every year. Also there is a big challenge in data collection – quality and accuracy. The authenticity of data collection is a huge challenge for a simple reason: the country is a diverse one with multiple languages, cultures that creates more physical distance - infrastructure problems, low pay…so one has to be aware that there are risks and there will be problems but one has to have systems to identify those problems and clean them out. Technology will help here. It can help in analysis of data received, data collected…the speed at which the data arrives that gives an opportunity to analyse the data quickly and identify if there are questions, doubts and go back and recheck.
Q] What is the road ahead for Synovate in India?
As a business, Synovate is very optimistic and excited about what can be achieved in India. India has been identified as one of Synovate’s gateway market which means that it is seen as a priority market to provide services to our major clients. This requires substantial investment to ensure we can achieve that in the most effective way possible. Our plans are to make key investments in resources to ensure that we have the expertise across our offerings – in terms of our resources, infrastructure and even physical infrastructure. Which is why we are making substantial investments in property this year and even larger investments in property in 2012. We would also be looking at other opportunities to grow – partnerships, M&As, etc.
Q] By when do you see India emerging amongst the top-3 markets for Synovate globally?
We have about 10-12 gateway markets and India is one of those. These are markets that may be big for us like the US to the ones that are not big but provide ample opportunity for growth like India. I don’t expect the growth to slow down. If we get the right partnerships and editions into our business then we could achieve a healthy growth rate. But in terms of organic growth, I think 30-40 percent is a very positive but realistic target.
