Sunday, October 25, 2009

The new Bangalore phenomenon

The new Bangalore phenomenon

A new, uber-rich layer is seeping into Bangalore's social and financial life, changing the city's contours. With high-flying jobs, salaries in crores and multiple houses and cars, this creamy layer has created a new Bangalore where there is a constant need to meet their demands of options and upgradation. Shrabonti Bagchi and Sindhu Murthy talk to experts to find out how the city has accommodated them

Shrabonti Bagchi and Sindhu Murthy

Software consultant Sudip Banerjea, 38, moved to Bangalore from Portland, USA about a year ago. Having lived in the US for almost two decades, with only intermittent visits with his family to his parents living in a small town in West Bengal, Banerjea was apprehensive about the move, especially on account of his two children, aged 10 and three. "I didn't know if we would get good schools for them, good day-cares, good nannies, good places for them to play and hang out at, the kind of creative activities that they were used to in the US," says Banerjea, a trifle abashedly.
Within a month of moving to Bangalore, Banerjea and his wife had realised that most of their fears were unfounded—the India they had left behind 20 years ago was not the same, and Bangalore was far better equipped to meet their expectations and demands than they had ever imagined.
Banerjea's discovery is perfectly in line with a recent survey conducted by market researchers The Nielsen Company that found Bangalore to be the second most affluent city in India after Delhi. While that survey may have opted for a bird's eye view of the city's financial clout and taken into consideration a larger group of people driving the city's economic graph upwards, there are those who believe that the kind of services and standards Banerjea found in Bangalore are driven by a certain breed of Bangaloreans who comprise probably the top 10-12% of Bangalore's professional class.
Enter the New Bangaloreans, the yuppies of Bangalore (buppies?). According to sociologist Professor GK Karanth, this creamy layer of Bangalore is driving the kind of economic and social change that makes it possible for returning NRIs such as Banerjea to feel right at home.
Brand-strategy specialist Harish Bijoor's idea of this financially and socially empowered New Bangalore is straightforward and emphatic. "New Bangalore is about those with purchasing power—those who do all their buying without a second glance at the price tag," says Bijoor. He says shopping at a Bangalore supermarket can be an eye-opener of sorts for people used to thinking of Indians as thrifty and conservative spenders. "When you shop for FMCG goods, you notice a large proportion of people not even glancing at the rear of the pack for the price. When the composition of people who do this crosses the Plimsoll Line of acceptance, a new city with a new consumptive ethos has emerged," he says, and he firmly feels a certain segment of Bangaloreans has crossed the line between a simple fulfillment of needs and luxury.
This is the Bangalore that thinks nothing of upgrading to the latest 'It' car of the moment, spending a lakh on a well-made suit, of booking a 5-lakh holiday on a whim, of dropping in to UB City of a weekend afternoon and walking out with merchandise worth multiple lakhs, of spending good money on 'perishable pampering' such as a day spent at a lavishly appointed spa or blowing up the equivalent of a middle-class monthly salary on a good meal at a tony restaurant.
The very existence of a luxury retail mall like the Prestige Collection at UB city, which threw its door open in 2007 amid much fanfare and was only the second large-format luxury retail outlet in the country at the time, speaks volumes about Bangalore's purchasing power. The Bangalore of yore had its classy, premium outlets for designer clothes and accessories such as Ffolio, sure, but they largely catered to a select circle of people who were 'in the know.' The UB City stores, from Burberry and Louis Vuitton to Stella McCartney and Salvatore Ferragamo, made it possible for anyone with a platinum credit card to walk in and walk out with a box bearing the name of an uber-luxury international brand.
"New Bangalore is the young urban professionals in aerospace, IT, biotech, automobile design. Well, their drivers are buying high-end phones, so you can imagine what is happening to the people who employ them," says communications consultant and DNA columnist Arun Katiyar.
According to financial analyst and consultant Shyam Sunder, MD of PeakAlpha Investment Services, there's nothing surprising about the fact that the New Bangaloreans exist. There are plenty of people in the city who earn upwards of Rs50 lakh a year—typically, CEOs and MDs and heads of sales and marketing at top IT and management companies—and Sunder would pit them squarely in the New Bangalore segment.
But, cautions Sunder, don't be deluded into thinking that the buppy is only into frivolous buying—cars and expensive clothes and gourmet food every other day. There are two major spending areas, he says, where the buppy reveals some of the far-sightedness of his much less prosperous ancestors. "Saving up a considerable amount for their children's education, preferably abroad, and buying real estate are two hallmarks of this category," says Sunder. He says people in this income category routinely plan for their children to go abroad for higher studies, generally right after school, and put away generous amounts of money for this purpose through their children's school years—with a 6-year foreign education costing anywhere between Rs3 crore to Rs5 crore.
This, says Katiyar, is also reflected in the kind of premium schools that the city now boasts of. Astronomical fee structures notwithstanding, expats living in Bangalore, returning NRIs and high net-worth professionals do not hesitate on spending lakhs on quality schooling for their kids.
The other big area of some really whopping spending is real estate. Unlike a previous generation of affluent people who waited till they were close to retirement before investing in a house, the New Bangaloreans waste no time in acquiring property. According to Sunder, they think nothing of buying a one-crore property, the EMI of which would be close to a lakh — and plunging into the next buy once that loan comes close to being paid off.


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