However, every day 700 new runners are consciously choosing to push the envelope of their endurance. They have to soak in their sweat, wear their heels, deprive themselves of all excesses, even sleep, to feel the pain that most seasoned marathoners say eventually transcends into the zone of endless bliss. restraint This cohort tends to be social loners or absolutes but there is a sacred bond that unites them all. It’s almost tribal. From billionaire to bus driver, gonzo or geriatric, brass to chartered accountant or engineer to endocrinologist, the road is a great leveler and when their sneakers hit the asphalt they all become the same. An athlete steeped in experience. For a few hours they forget their social credentials of being a parent, a partner, a professional, and strive towards a goal they have set for themselves.
And guess how much they are working on in India alone – Rs 3,000 crore. Not my fairy tale estimate but that of Vivek Singh, a former rugby champion who together with his brother Anil, organizes four of our best marathons in the country including the largest participatory sports spectacle on Sunday which passed which was held in Mumbai, under the auspices of their company. Procam International. “There is a shift in collective consciousness,” Singh told me. “People who have never won a single medal in their school or college are dreaming of a medal around their neck.” Even outcasts can become outliers.
From food to fashion, travel to theme parks, cinema to concerts, the Experience Economy is underpinned by the idea that consumers increasingly prefer immersive experiences to goods, thereby creating economic value for who provides those experiences. There is a strong correlation between the increase in discretionary spending, the transition of the population towards the middle to high income strata and the psychological need to seek diverse exposure. What did Apple do? Add a super camera to your phone and kill privacy – every “moment” of your life captured and shared instantly on social media for validation. Netflix went one step further and broke appointment viewing. Nespresso and Starbucks made the foam that capitalized heavily on these opportunities using their products that revolutionized the user experience.
And this is an area where our demographic dividend begins – By 2030, 78% of India’s population is expected to fall into the middle and upper class groups, up from 54% in 2018. And as our per capita consumption doubles from $2,000. to $ 5,000 and even higher, the share of the wallet of discretionary purchases will also see a quantum leap. And on top of the pyramid, there will be experiences. Selling on cheap data, as internet penetration hit more or less ~50%, post-Covid India was hungrier than ever. He wants to mix, feel, touch, taste, smell, swirl, see, slurp, swirl, move, like and break into ecstasy. Turn on, turn on and go, but at your convenience. But we are still only about scratching the surface. Technology will help and foster the experience ecosystem in high growth emerging economies like ours. Until recently, we were all passive audiences. Spectators of gladiatorial sports; now we all want a piece of that meat, nee pie, nee action. We want to cross the finish line, sing along with 1000 others or jump out of a plane to feel like Mission Impossible. Some are even willing to sacrifice fun just to make it to that starting line. Endorphins, anyone?
If consultants PWC, Momentum Worldwide, Beyonk and Seigel + Gale are to be believed, the market size of the experience sector is $150 billion and growing. In India too, live events are expected to fetch over $2 billion soon. This is a relatively price elastic segment as well. About 16% is the price premium for good customer experiences but 76% of consumers globally pay for experiences over material goods and $98 billion has been left on the table by corporations that failed to deliver experiences.
In India, travel and hospitality, wellness and fitness are the two biggest segments of this experiential experiment. Mahindra Holidays, with its bespoke holiday packages, is expecting occupancy to cross 85% after Q3FY23 against 74% during the pre-pandemic era. About 84% of domestic travelers are thrill seekers, close to 79% are looking for romantic getaways. They are willing to pay significant premiums for authentic and personalized elements. But technology, UI/UX and the recall of the experience play a central role in their attachment. Personal wellness is a $188 billion spending space today with a CAGR of 25% expected through 2027 but uniquely enough, it does not have easy discovery as it is highly dependent on referrals. Therefore, the providers of the experience become as important as the experience itself. And finally, even though only 1% of the $800 billion in retail spending is on luxury, it still IS the largest contributor to spending in the experience economy. Consumers are increasingly willing to let go of their purse strings for a lux experience either by owning a branded product or spending a fortune on an outing, or perhaps a meal at Massimo’s in Modena.
