India Today

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India Today
Prof. Atul Tandan Director, MICA
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(No Transcript)
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Introduction
Where the mind is without fear and the head is
held high. Where knowledge is free. Where the
world has not been broken up into fragments By
narrow domestic walls. Where words come out from
the depth of truth. Where tireless striving
stretches its arms towards perfection. Where the
clear stream of reason has not lost its way Into
the dreary desert sand of dead habit. Where the
mind is led forward by Thee Into ever-widening
though and action. Into that heaven of freedom,
let my Country awake
- Rabindranath Tagore Nobel laureate
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Know India
Population Ownership Consumption Media
Industry Entertainment Industry
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Population

• 2.5 of the worlds land mass
• 16 of the worlds population
• Every sixth person in the world is an Indian and
  every fourth person in Asia is an Indian
• India adds an Australia to its population every
  year
• Population projection for 2011
• For under 15 years 370 million
• For 15-64 years 747 million
• For 65 years 58 million
• 15 in the age group of 0-6 years

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Population

• Male and female literacy of 75.85 and 54.16
  respectively
• Male and female life expectancies of 62.3 years
  and 65.3 years respectively
• Overall literacy rate 65
• Current middle class of around 600 million people
• Nearly 40 of the population (402 million) are in
  the working age
• Indians urban working population is as much as
  the total working population of France and Italy

Thus India represents a young country full of
opportunities
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Ownership Consumption

• A market that grows by 30 million consumers
  every year
• 75 million Indian families own a television
• 35 million households own two wheelers
• Second largest producer of two wheelers, market
  size valued at 1200 million
• Every second urban house hold has a bank account
• Consumer finance market grown to 20 billion

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Ownership Consumption

• Indian Readers have a choice of 30000 odd
  magazines and newspapers
• Tele-density (cellular and fixed) 11 and growing
  at an annual rate of 40 against the world
  average of 15
• 75 million cellular subscribers and still growing
  at a rate of 35 per annum
• 5 personal computers for every 1000 people
• Largest producer of Cigarettes

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Rural Wallet
A fourth of the expense is on Groceries
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Media Industry

• Cable Television industry
• 1.2 billion currently in revenue terms
• Growing at approximately 15-20 p.a.
• Likely to be 3 billion by year 2010
• Share of print media in ad expenditure
• Globally 45
• India 55
• Ad. Expenditure to GDP ratio expected to increase
  to 0.65, comparable to other developing and
  emerging countries like Brazil, Indonesia and
  Thailand.
• Television software industry likely to be 3
  billion by 2008

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Entertainment Industry

• Projected size of entertainment industry 11
  billion by 2010
• Exports market size of 700 million exhibiting a
  strong growth
• Film market
• Expected to grow at 25 p.a. in the next three
  years
• Projected size of 4 billion
• Music industry will be 500 million in size by
  2010

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Entertainment Industry

• Radio (which receives only 2 of total
  advertising)
• Expected to grow to the international average of
  30 by 2010
• Size of market in revenue terms projected to be
  around 200 million
• Live entertainment and event management industry
• Growing at a rate of 50 p.a.
• Expected to be 300 million by 2010

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India A Statistical View
Macro Economic Indicators Engines of Economic
Growth Major Market Trends
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Selected Macro Economic and Financial Indicators
1980 2010
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Macro Economic Indicators

• Current growth in Real GDP around 7 and expected
  to grow by 8 by 2007, double digit by 2010
• Industry growth of 12
• Service sector constitutes nearly 52 of GDP
• Average Annual Growth potential of service sector
  in providing employment is 11 of total labor
  force
• Rate of Investment is 30 of GDP
• Rate of Savings is 30 of GDP

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Macro Economic Indicators

• Lowest ever bank rate of 6
• Low rate of inflation of 4 offers higher return
  on investment
• Relatively stable exchange rate
• Relatively stable stock market offering high
  return to most Foreign Institutional Investors in
  the long-run
• Foreign Direct Investment of around 45 billion
  constituting 1 of GDP
• Foreign exchange reserve in excess of 160 billion

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Macro Economic Indicators

• Low growth of 5 in consumer price index offers
  wide range of choice for purchasing
• Per capita income
• Currently PPP 3300
• Growing at nearly 6 p.a.
• Instability - lowest as compared to most Asian
  economies
• Total External Commercial Borrowing approvals
  during 2005-06 - 40billion
• Growth of exports 30 and 12 of GDP
• Growth of imports 48 and 18 of GDP

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Macro Economic Indicators

• FDI Inflows August 91 Jan 06

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Engines of Economic Growth

• A thoroughly professional PM
• Increased presence in geo-politics
• Rapidly rising education levels
• Accelerating rates of technological innovation
  and application
• Cheaper and faster communication dissolving
  physical and social barriers, both within the
  country and internationally
• Information made available in greater quantity
  and quality than ever before
• Opening up of new markets because of
  globalization

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Segmentation of Household (in mln)
Source NCAER
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New Consumer Shifts
Multi-directional market penetration with new
consumer shifts

• From higher income groups to lower income groups
• From urban to semi-urban and rural areas
• From male to female segments, also reverse is
  true as in personal care products
• From higher age groups to lower age segment the
  emergence of kid, young and clever kid

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New Consumer Shifts

• From functional to convenience goods
• From unbranded to branded products
• From need-based buying to joy buying
• From physical products to concept selling
• From low price to high-end products
• Spending leisure time on whatever is available in
  high fashioned entertainment
• Increasing consumer awareness on products and
  product value
• Leap-frogging sunrise areas

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Major Market Trends

• Attributing illusory USPs to brands to gain
  market penetration
• Promotion acquiring increasing value
• Emergence of e-business as a major market force
  while IT, Telecom and Biotechnology continue to
  invade the market place
• From BPO to KPO
• Ascendancy of product quality in buyer buying
  behavior impacting product improvement

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Major Market Trends

• Increased firm (and brand) mortality leading to
  fast restructuring of market segmentation,
  product composition and producer organizations
• Volatility of market structures and price,
  improved delivery systems and customer-service
• Up-gradation of delivery systems with perceptible
  consumer-orientation

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Major Market Trends

• MNC invasion in a large number of product markets
• Markets becoming more competitive and more
  oligopolistic at the same time
• Change from sellers market to buyers markets
• Driven towards Value for Money Approach
• Injection of monopolistic power through
  strategically designed USPs and brand building

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Major Market Trends

• Shifting Determinants of Development
• Manufacturing to Services to Value Added Services
• Capital Resource to Knowledge Resources to
  Intellectual Supremacy

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Knowledge Resources

• Technology
• Organisation
• Information
• Education
• Skills

All combined, is the broader framework of IMC
industry.
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Selected High Employment Potential Sectors

• Telecommunication
• E business and Outsourcing
• Entertainment
• Banking and Insurance
• Electronic and Information Technology
• Marketing Communications
• Education
• Retail Trade
• Fashion Industry
• Hospitality Industry
• Healthcare and fitness

Thus a greater scope exists in IMC industry.
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Telecommunication

• 8th largest network in the world 3rd largest
  among the emerging economies (after China and
  Korea)
• 250 million line basic telephone network
• 75 million cellular mobile network
• Average annual growth rate
• 30 for basic services
• More than 100 for cellular and internet services

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Telecommunication

• Projections for number of connections
• 175 million connection by 2008
• Investment opportunity of
• Approximately 80 billion by 2008
• 120 billion by 2010
• Move towards Value Added Services

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E-business Outsourcing

• Total e-commerce revenue in India expected to be
  around 10 billion by 2007
• By the year 2007
• 40 million internet connections
• 100 million internet users

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Entertainment Industry

• Milestones and Achievements
• From two state run channel in 1990 to close to
  340 channels currently
• 54 million cable and satellite homes which
  translates to 270 million viewers
• More than 1000 movies produced in a year
• Granted an Industry status

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Entertainment industry

• Requirement of at least 20000 screens in India as
  against 12548 currently
• 1500 new multiplexes screens expected to be set
  up in the next 2-3 years
• 100 FDI in the film industry permitted
• Industry raised 40 billion from capital market
  during the year 2005
• Accounts for 20 of worldwide 40 billion
  animation business due to inherent advantages
  like IT skills and cost competitiveness

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Banking Insurance and Financial Markets

• 290 commercial banks including 40 odd foreign
  banks
• Over 70000 branches throughout the country
• Roughly 40 million shareholders
• India has the third largest investor base in the
  world next to USA and Japan
• Assets under management with the Indian Mutual
  Fund Industry in excess of 70 billion
• Cumulative net investment by FIIs in Indian
  securities more than 30 billion
• Size of Life Insurance Business 350 billion
• Size of Non life insurance 175 billion

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Electronics and Information Technology

• Software sector growing at a rate of 58 p.a.
• Software exports expected to grow to 100 billion
  by 2010.
• Around 200 out of the Fortune 500 companies
  outsource their software requirements to Indian
  software companies
• Expected to generate revenue to the tune of 130
  billion by 2010
• IT enabled services sector will generate 25
  billion by 2010
• Leading companies like GE, American Express, HSBC
  Royal and Sun Alliance, Le Meridian have set up
  their call centres in India

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Brands In India
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Brands in India
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Brands in India
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Brands in India
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Top Ten Indian Brands 05
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Indias Largest Brands
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Indian Retail Scenario Salient Features

• Contributions to GDP 13
• Employment Generation 11 of total work force
• Current size of the industry US 6 bln.
• Addition of half a million dollar every year to
  organised retailing
• Organized retailing 3 of total sector
• 13 million retail outlet
• Recognised as a potential sector but yet to
  receive the industry status
• FDI retailing - Actively under consideration

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Indian Retail Industry
Projected Figures
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Fashion and Lifestyle
Projected Figures
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Some Examples..

• Moser-Baer World's third largest optical media
  manufacturer the lowest-cost CD-Recorder
  producer
• Hero Honda Largest motorcycle manufacturer in
  the world.
• Component Suppliers to 15 leading automobile
  giants

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Even Automobiles

• Rover is marketing 0.5 mln. Indica cars of Tata
  in Europe
• Aston Martin contracted prototyping latest luxury
  sports car to an Indian-based designer.
• Suzuki Hyundai India set to make India global
  small car hub
• Ford presented Gold World Excellence Award to
  India's Cooper Tyres.

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Success is Infectious

• World Largest
• Bharat Forge - single-location forging facility
• Hindustan Inks - single stream fully integrated
  ink plant
• Essel Propack - laminated tube manufacturer
• And many more..

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India Everywhere!!