For over a decade, the Indian consumer was classified as a high-income household or middle-class based on the educational qualification of the men in the family and the volume of assets in possession. However, the women’s role started evolving in the Indian family and thus a need appeared for a new format.
“Over time, India developed and ownerships increased significantly. So, the NCCS way of segmentation of social and economic capital became very volatile, says Shuvadip Banerjee, General Secretary, MSRI and Chief Digital Marketing Officer of ITC Ltd.
In 2014, New Consumer Classification System (NCCS) E and B were roughly around 50 percent in urban India. In 2024, it is 83 percent. Now when we look at the behavioral data, we see that what was the penetration of something which is mass or popular in the ACCDE segment AB segment penetration. As marketers, we concluded that people are downgrading, to the mass products, but it’s not the reality, it is because the definitions have shifted so much that is how we are seeing the data.
Therefore Indian Socio Economic Classification (ISEC) was the need of the hour. Research firms, advertisers, and measurement bodies are rapidly adopting ISEC to target households. It has replaced the old tool NCCS which was implemented in 2011.
ISEC is the first classification which has taken a woman into account. It is the first gender-neutral classification in this country,” MRSI, which devised the system.
While talking about the challenges of NCCS, Banerjee shared, “As advertisers and measurement people, we were struggling to use the social and economic capital segmentation. So we were using various other surrogates to arrive at that, because we were not being able to figure out whom to target in the premium segment. B
We need to relook at this, we finally ended with 3 parameters – the occupation of the chief wage earner, the highest educated adult male of the house but what became the designation of the highest educated lady of the house, that actually made the biggest difference, that brought in the angle of the social capital.
Even if I had a lot of money and I could buy what I wanted to, the refinement of the choices, was actually getting defined by the education of the lady of the house, intuitively right but mathematically now proven.
While talking about how NCCS segmentation varies from ISEC, Banerjee shared an example of mass toilet soaps and pointed that in the NCCS classification, the soaps are in the premium category but under ASEC classification, its in the lower part of the social economic classes, which it should ideally be.
Read More:India shifts to a new socio-economic classification system ISEC