The Changing Market Place

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The Changing Market Place

• Rajeev Karwal

Ethical, Profitable, Sustainable Growth
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Channel Choices

• Organized Urban Retail
• Rural Initiatives
• E Commerce
• Mobile Commerce

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Media Choices

• Conventional Media getting more specialized, In
  Movie, Re-emergence of Radio
• Experiential Marketing
• Festivals, Special Day Celebrations, Events,
• Web, Blogs, Email
• Mobile, Mobile Internet, SMSes

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Product Choices

• Mobile Phones and Digital Cameras
• Eating Out, Packaged Food
• Homes
• Foreign Travel

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Price Choices

• Plastic Money
• Mobile Money
• Finance Options

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Nation of Shopkeepers to a Nation of Shoppers

• Save now and Consume later to Affordable
  Indulgence
• 12 million shopkeepers
• Youth
• Working Women
• Power of the retailer

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Demographics

• Population 1,095,351,995 (July 2006 est.)
• Age structure (2006 est.) 0-14 years 30.8
  (male 173,478,760/female 163,852,827) 15-64
  years 64.3 (male 363,876,219/female
  340,181,764) 65 years and over 4.9 (male
  27,258,020/female 26,704,405)
• Median age (2006 est.) total 24.9 years male
  24.9 years female 24.9 years

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Changing demographic profile
Rich (Above Rs215000) Consuming
(Rs45000-215000) Climbers (Rs22000-45000)
Aspirants (Rs16000-22000)
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The Indian Retail Market
GDP US 691 Bn
Private Consumption US 460 Bn (64)
Public Spending US 71 Bn (11)
Gross Capital Formation US 160 Bn (25)
Retail US 258 Bn (56)
Non-Retail US 152 Bn (44)
Urban US 98 Bn (38)
Year 2004-05 Source NAS, Govt of India
Rural US 160 Bn (62)
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Private Consumption Growing Faster Than The
Economy

• US 157 Bn (About Rs 690,000 Crores) consumption
  to be added in the next five yrs.

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India Today is..
India today is
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Multiplier Effect on Retail
A multiplier effect on retail

• Large structural shift taking place
• Rising disposable incomes and better access to
  consumer finance
• Stable inflation scenarios, lower incentives to
  save

Urbanisation
Brands profusion
Growth
Media
Convenience
Consumerism
Working women
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Changing Consumer Psyche
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Youth has no Guilt of Consumption
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Growing Urbanization
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Into the spending mode..
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Urban Poor

• SEC C, D E comprise of 33 million plus urban
  Households (54)
• If able to innovate and create capacity, this is
  a significant market worth approximately Rs.
  250,000 crores
• Rural households would be at least 5 times more.

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Women will come into their own..

• India has the worlds largest number of
  professionally qualified women.
• India has more female doctors, surgeons,
  scientists and professors than the United States.
  
• India has more working women than any other
  country in the world. This includes female
  workers at all levels of skill from the surgeon
  and the airline pilot to bus conductors and
  menial labourers.

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Working Women

• The level of influence that women exert on
  purchase decisions is directly proportion to
  their increased financial independence
• This figure is lower only for the food and
  grocery where men play a larger role in working
  women families
• Even then it is interesting to note that certain
  male centric categories especially home
  entertainment is still dominated by men making
  the decisions more often than women.

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More Change in the offing
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Media Reach
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Retail Catchments
Over 44 million people entered Pantaloon formats
last year. The number is expected to be 80
million, 160 million and 300 million in the next
three years this represents 30 of Indias
population
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Consumer Goods
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Processed Foods
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Agri Related
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Blogs are making their own impact

• Just search for Rashmi Bansal blog in Google and
  it will yield over 59,000 results and search for
  Gaurav Sabnis blog to stumble upon over 66,000!!
• India Daily commented upon the silence of
  newspapers on the IIPM scam. Maybe, they are no
  sure what to do now, so publishing crap to
  downplay Indian bloggers. They are making a huge
  impact on the student community in India with
  their blogs unearthing the IIPM scam.
• There are hundreds of thousands of bloggers from
  India at this moment and they have impacted the
  Indian psyche well. The IIPM scam was unearthed
  following Indian bloggers initiative.

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E Commerce

• Most e-commerce sites have been targeted towards
  the NRI's with Gift delivery services, books,
  Audio and videocassettes e.t.c..
• Major Indian portal sites have also shifted
  towards e-commerce instead of depending on
  advertising revenue.
• The web communities built around these portal
  sites with content have been effectively targeted
  to sell everything from event and movie tickets,
  the grocery and computers.

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E Revolution

• Indian Banks too have been very successful in
  adapting EC and EDI Technologies to provide
  customers with real time account status, transfer
  of funds between current and checking accounts,
  stop payment facilities. Speed post also plain to
  clone the federal express story with online
  package status at any moment in time .
• The stock exchanges coming online providing a
  online stock portfolio and status with a fifteen
  minute delay in prices. The day cannot be far
  when with RBI regulations we will able to see
  stock transfer and sale over the Net with
  specialized services like swab and etrade.
• 'Digital signatures' and verification processes
  over the Internet may not be far behind.

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Internet Users Country Ranking
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Mobile Subscribers
Source iSuppli, compiled by DigiTimes.com, April
2007
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M Commerce Target Market

• 38.5 million Internet Users
• 45 million credit card and debit card users
• 100 million mobile phone users
• 440 million bank accounts in India
• 1 billion worth of online commerce
• 5 billion retail commerce
• 10 billion worth of credit card transactions

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M-Commerce - The Commerce of Convenience

• Telecom leaders like Reliance and Airtel have
  taken the lead in offering m-commerce services.
  From bill payments to airline and railway
  ticketing to booking movie tickets and other
  random services, they offer it all.
• M-Commerce in India is on a huge growth path and
  hybrid m-commerce service providers such as
  Paymate now offers innovative services
  never-heard-of before.

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Passengers Traveling
As many as 1,421,007 foreign tourists visited
India during January-March this year as against
1,242,282 in the first three months in 2006.
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The Rural Story

• The rural India offers a tremendous market
  potential. A mere one percent increase in Indias
  rural income translates to a mind-boggling Rs
  10,000 crore of buying power.
• Nearly two-thirds of all middle-income households
  in the country are in rural India. And close to
  half of Indias buying potential lies in its
  villages.
• Increasing brand awareness

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E - Chaupal

• Taking the Internet to the villages and
  empowering rural India with information at the
  click of a button is what best describes ITC's
  much acclaimed initiative - e-Choupal
• ITC's unique web based initiative offers farmers
  of India all the information, products and
  services they need to enhance farm productivity,
  improve farm-gate price realisation and cut
  transaction costs. With the e-Choupal farmers can
  access latest local and global information on
  weather, scientific farming practices as well as
  market prices at the village itself through this
  web portal - all in Hindi. It also facilitates
  the supply of high quality farm inputs as well as
  purchase of commodities at their doorstep

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Loans EMIs

• We are slowly becoming comfortable about
  borrowing
• 11 of the sample said that pay EMIs, thats
  still low by international standards
• East and west are relatively low on credit buying
• Highest proportion of EMI payers were from the
  Cities of south like Bangalore, Chennai, Madurai,
  and cities Chandigarh, Jaipur and lucknow,
  ranging from 14-24

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Reasons for taking a loan

• Top reasons were buying a home and vehicle

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Some Ownership numbers

• Arrived veterans are the highest in most
  lifestyle categories of personal use such as car,
  house, vacations abroad etc. Balance seekers come
  next.
• Average ownership age is decreasing esp. for home
  and vehicle ownership

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Strengthening Retail PowerBrand Vs Retailer
Loyalty

• Overall brand loyalty scores are way above
  Retailer Loyalty scores, this being most
  prominent for Appliances and electronics category
• But the fact that retailer loyalty exists in
  significant numbers and scores over the
  indifference to brand/retailer statement, shows
  that retailers have begun to make a mark, and
  today are more than the commoditized shops of
  yesteryears, with a definite brand identity of
  their own

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Thank you