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Industry Trends


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Industry Trends

  1. 1. India Shinning
  2. 2. India Shinning Registered a growth of 6.9% in 2010‐11, GDP grown up from $ 0.5 Billion in 2000 to $ 1.53 trillion in Billion in 2000 to $ 1 53 trillion in 2010. Growing GDP Investment growing @ 10.9% Annually. Rising Investments $ 37.76 billion FDI inflow In year 2010‐11 with growth Of 8.41% from year 2000. Robust Growth in FDI $ 1219, up 18% from the  Previous year, will further Go upto $ 1425 in next Fiscal. Growing Gross National Income Source; FICCI KPMG Report‐ 2011Note-The Indian economy expanded at its slowest pace in more than two years in the July-September quarter, hurt by high local borrowing costs and adeepening euro-zone crisis.
  3. 3. Urbanization Rise in IncomeHigh Literacy Retail Breakthroug Young h IndianKnowledgeEconomyE Exposure to Higher Media PurchasingSectorial PowerGrowths Entry of Foreign Players IncreasingExploding BrandMiddle Class Consciousness C i
  4. 4. Sectors to watch…USD 32 USD 28 USD 15 USD 23 USD 42Billion Billion Billion Billion Billion Source; on FICCI KPMG Report 2011
  5. 5. Insight: TelecomThe Indian telecommunication sector in India is  Revenues are projected to reach the third largest sector across the globe and the  h hi d l h l b d h US$ 45 billion  US$ 45 billisecond largest among the emerging economies  by 2012of Asia,. Indian mobile handset market is Growing at over 25 per cent for the last three  g p expected to show steady growth  p ygyears.  through 2015 when end‐user sales  will surpass 322 million units. 3G Campaigns Reach and growing Rural India driven by the lowest call rates in the world and dominated by low‐cost devices and dominated by low cost devices Source: IBEF, November 2011
  6. 6. Insight: Automobile•India, the worlds second‐fastest growing auto market, is in top‐gear growth.•Indias passenger car and commercial vehicle manufacturing industry is the fourth largest in the world.•Asia’s third‐largest passenger vehicle market.•World’s fifth‐largest bus and truck market (by volume). Maruti Suzuki held a market share of 48.74 per cent, Hyundai was around 18.10 per  cent, Tata Motors market share stood at 12.92 per cent, General  Motors India (GMI)  t Tt M t k t h t d t 12 92 t G l M t I di (GMI) and Honda Siel cars India (HSCI) had a market share of 4.40 per cent and 2.97 per  cent respectively during FY2011. BMW‐8042 Units, Mercedes‐6698 Units, Audi‐5,517 Units (Nov 2011). Volkswagen‐78,408 cars (Dec 2011) V lk 78 408 (D 2011) Source: IBEF, October 2011
  7. 7. Automobile• India is poised to become the third largest car market by 2020 after the US and India is poised to become the third largest car market by 2020 after the US and China.• Indian luxury car market is growing at an annual rate of 70 per cent and the sales for the same are expected to touch 150,000 units by 2020.• BMW Vs. Mercedes Benz Vs. Audi India.• V lk Volkswagen hopes to capture 10% market share in 2 years, spend huge amount in  h t t 10% k t h i 2 dh timarketing, infrastructure & promotions (also entering in pre owned car segment this year).• MB India spend 1000 cr in marketing & infrastructure in 2012.•PPeugeot reentry in India. t t i I di Source: IBEF, October 2011
  8. 8. Insight: RetailRetailers expanding presence, Retailers expanding presence Current market is  C t k tiadding new stores. estimated at US$ 550 Foreign retailers firming their  billion and is expected to plans for India entry increase to US$ 464  $ billion by 2013. Organised retail is estimated  at US$ 28 billion with around  7 per cent penetration. It is  projected to become a US$  j d b US$ 260 billion business over the  next decade with around 21  per cent penetration. 2003 2008 2013 Source: IBEF October 2010 Retail Market in India
  9. 9. The New Market Dynamics •Geographically- the Indian urban growth story that until now was driven largely by metros, is now moving beyond, into smaller towns where th b d i t ll t h the affluent profile is fast emerging. •The growing affluence levels, increased awareness due to media penetration, p improved connectivity and significant changes in consumption patterns with high aspiration levels of small-town India are compelling marketers to take notice of a new affluent class. •About 22 key urban towns are growing and getting bigger and more affluent according to the Indian Consumer Spectrum of Urban India Report by Indicus Analytics. Source- Ernst & Young, The New market Shehers Report
  10. 10. Consumption
  11. 11. The New Market Dynamics• A study of 100 cities in India’ consumption spending by PWC shows that metrosconstitute about 30 per cent of the total consumption market, this indicates that the keyurban towns, the rest of urban India and rural India together garner almost 70 per cent. , g g p• Affluent households tend to have lifestyles characterized by lesser physical work, greaterexpenditure on entertainment, less time spent on day-to-day necessities of householdchores and occupation.• A per G t As Gartner b i b h i report. N Y k 14 different types of people(similar buying behavior t New York, diff tt f l ( i ilbuying behavior). In Boston, nine and in Tokyo 11. In India, the diversity was astounding.In Pune, they found 213 types and in Hyderabad 171 types.• The traditional way of profiling an affluent consumer by demographics, psychographics y p g y g p py g por through SEC classification is passed. Now brands are mapping it by the number andkind of durables in a household.• SEC classification (based on level of education & profession of a family’s CWE (ChiefWage Earner) is no longer giving an accurate depicter of consumption disposition ofhouseholds.
  12. 12. Tier 2 & Tier 3 town Opportunity • Emerging niche Tier 3 cities are richer than most existing Tier 1 and Tier 2 citiesSource: McKinsey Report – The Bird of Gold
  13. 13. Few Surprises… • 49 % of affluent individuals are educated in English, the other half has received its education in other languages. • Only 14 % speaks English at home and a large number amongst these watches TV in Hindi/regional languages. • 48 % of theses households have more than one CWEs. • Almost nine in ten individuals live in nuclear families and an average family size is of 4. • One in five of these households have two or multiple TV sets.Note: Weighted base Upper Middle-92.05 Lacs, Upper Upper Middle-7.63 Lacs & Rich 3.94 Lacs
  14. 14. Over the next two decades, India’s working‐age population will increase  by 240 million More  Consumers
  15. 15. The New Market Dynamics Media spends are moving towards non-metros, with the KUTs (key urban towns) and ROUI rest of urban India increasing their share of ad spends and volumes. The report pegs KUTs and ROUI to potentially command 40-50 per cent of India’s urban advertising spend. Source- Ernst & Young, The New market Shehers Report
  16. 16. Synopsis of household influence • The Nielsen UMAR report put a  figure of 2.6 million to households  with monthly incomes of over Rs  with monthly incomes of over Rs 40,000. • Capgemini‐Merrill Lynch World  Wealth Report 2010, there are 1.3  Lacs dollar‐high net‐worth  d dua s d a, ese a e individuals in India, These are  individuals who have in excess of  $1 million as investible surplus  annually. annually Source-Nielsen UMAR survey
  17. 17. Synopsis of household influence
  18. 18. Synopsis of household influence
  19. 19. Future is here;  Future is here;Rural IndiaR l I di
  20. 20. Sizable Market• 70 % of population amounts to 815 m, translating into  a total of 151 m households. The sheer base is  equivalent to the population of US, UK, France, Japan,  Italy and Germany put together.• Rural India contributes to over 54% of India’s GDP  which in itself is higher than the GDP of Switzerland.• Rural share is 55% of the total national MPCE. l h i % f h l i l C• Its non‐food item spends are equivalent to the urban  counterpart.• At the national level, the rural share is about 34% of  At the national level the rural share is about 34% of the total FMCG sales.• The urban consumer durable market is growing @ 10  %p % pa and the rural at 25%. %• The rural and semi urban markets contributed about  45% of the sales for the auto industry in 2011.• There has been a rise of almost 100% in the use of  mobiles by rural subscribers. (More subscribers than  countries like Brazil, Indonesia and Russia.)
  21. 21. Collectively Rich• Rural India is poor, backward, and illiterate and  largely consists of small farmers can not be  denied. But the fact also holds that this  denied But the fact also holds that this population generates 56% of India’s income,  has 64% of its consumption expenditure and  accounts for 33% of the national savings. This  accounts for 33% of the national savings. This individually weak segment is collectively a  force that is very rich.• NCAER estimates that lower income class has NCAER estimates that lower income class has  shrunk by 2/3rd in the last 10 years and  optimism for the next few years, income levels  are likely to rise even sharper.• Rural healthcare market in 2015 would be Rs  240 billion accounting for 24% of total market  share.
  22. 22. Market Characteristics• The telecom industry, FMCG MNCs,  Commercial banks, Consumer  , durables looking at this mass as a big  opportunity.• Some Rural Initiatives; HUL (Shakti) Some Rural Initiatives; HUL (Shakti),  ITC (eChoupal), Tata (Tata Kisan  Sansar).• I h l f In the last few years, the  h Government is increasing its fund  allocation for rural development  multifold.• Many of big MNCs like P&G, Marico,  g g Nokia allocating budgets for  improvement in rural distribution  channels.
  23. 23. Final Note• Product‐ Innovative products to suit the rural  note.• Price‐ Almost all subscribe to ‘Value for Price Almost all subscribe to  Value for  Money’.• Pl Place‐ C Conventional distribution network  ti l di t ib ti t k may not be effective. and
  24. 24. Promotion-Established hE t bli h d channels are not th l t the mode… BTL will lead lead.
  25. 25. Ever Wondered What Goes on Behind  Closed Doors? l d ? Consumer Behavior C B h i
  26. 26. All of “Me” All of “Me” Online in Different  in Different Spaces With a  Wi h y Variety of  People
  27. 27. Trends influencing advantaged consumer  behavior  b h i Rising individualism is leading to confident  Rising individualism is leading to confident and empowered consumers opening up to  personalised networks and expressions Rising affluence, aspirations is driving  ffl d consumers to seek premium brands that  dial up uniqueness and delivery exclusivity Consumers in India have a holistic approach  to physical and emotional wellbeing and  they are seeking healthier lifestyles Rising urbanisation and lack of time is causing  consumers to lead fast and flexible lives but  also on the other hand make time meaningful
  28. 28. Across the Globe, Women are the biggest emerging market in the history of the planet- Indra Nooyi hi f h l
  29. 29. Biggest emerging market‐WOMEN ‐ Accounts for 2/3rd of total consumers Accounts for 2/3 of total consumers  spending pie ‐ Makes majority of spending decisions ‐ Dissatisfaction rate is very high (40%)  compare to men(20%)‐ Boston Consulting  Group 2011 p ‐ Control $12 trillion consumer spends  annually  ‐ Unlike men the womans purchase Unlike men, the woman s purchase  decisions are not impulse oriented
  30. 30. We all fondly hum the song “Wedon’td ’t need no education” b Pi k d d ti ” by Pink Floyd… y In reality the time has come to acknowledge the power of k l d th f Young…
  31. 31. • Peer Groups, better education, easy  accessibility to media and greater exposure  to the things are making children more  t th thi ki hild aware of the world of brands.• Classified in 3 age groups: 3‐7 years, 7‐12  years & 12‐18 years & 12 18• Avid watchers of ads: bandwidth to watch  TV (2‐3 hours) is higher than adults (30‐60  mints average) i t )• Spends nearly Rs.291 crores as pocket  money, 84 percent of parents took their  children along with them for shopping and  hild l ith th f h i d admitted that they influenced major  purchases such as television sets(71%),  cars (66%), mobile phones (67%) and  cars (66%) mobile phones (67%) and computers (70%).• Engagement‐ Kids love fantasy, heroes,  over the top action, glam, romance,  over the top action glam romance Bollywood, tribe etc. 
  32. 32. Personalized Technology that can engage customer with a brand th t t ith b dTechnology which aims at personalizing the customer’sengagement with a brand will take the forefront while the onethat delivers generic and invasive communication will be largely g g yineffective and eventually obsolete.Now technology being able to map consumption pattern it is gy g p p pnow possible to gauge affluence by mindset mapping, throughcredit card usage, financial investments and lifestyle indicators.
  33. 33. Social Media Engagement is MUST Engagement is MUSTThe proliferation of information, inventive methods of reach and ease of connect would make Social Media impossible to  d f t ld k S i l M di i ibl t ignore.
  34. 34. EVERYONE
  35. 35. LinkedIn: Hi, I’m 42 years old, Senior Executive  Director with Fountainhead! I’m interested in  keeping up with industry news and business  k i i hi d db i competition. Twitter: Hi, I’m 32 years old, HOD with Hi, I m 32 years old, HOD with  Fountainhead and I enjoy following to be  followed. Interesting, I’m starting to meet  new people on Twitter. Its like my personal  new people on Twitter Its like my personal news feed. Also I ordered my new MAC right  from their twitter page, big shout out to my  customer service rep! customer service rep!Facebook: Hi, I’m 27 years old, AM with FH and glad my job allowed me back on Facebook! Girl, got to go – Sara just posted photos from the event last night. What did she wear?What did she wear? Social Media Consumer Profiling
  36. 36. Soc a ed aSocial media It’s a long termIs not a One  CommitmenT !Night Stand… Remember…… Remember
  37. 37. Customer Expectations Be very clear as to the specific superiority  Think about their  of your product or service and then  A superior publicise it aggressively whole experience.  whole experience. product/service / Always keep the  customer happy  Treat the  Keep your word.  If you  customer On time  promise to produce a  like royalty within budget product on a particular  date at a particular cost, Think about a way to  then that needs to happenmake people feel that  you are making an  Customer  Expectation  Find the most quick  effort for them Get personal Fix it now,  Fix it now, and effective solution  discuss it later then invite the  customer to assist  with the post‐mortem Generosity of  Generosity of Consistency To have loyal customers means to be a  To have loyal customers means to be a spirit and reliability person that your customers can rely on  Find a way of keeping  for consistency of product, and  people interested and  adherence to the promised schedule engaged with you
  38. 38. new positions likely to get created in  organizations Chief Experience Officer p Chief Attrition Check Officer & many more…..
  39. 39. The Digital Landscape in India Digital Users 100,000,000 people online in India Digital Consumers 83,700,000 people on social networks with  83 700 000 people on social networks with 42,687,000  building relationships with brands Digital Advocates , , 63,400,000  write about brands whilst  78,800,000 read and are influenced by these  comments Digital Customers 85,900,000 people use Digital to research  85 900 000 people use Digital to research products and services they go on to purchase
  40. 40. Internet penetration is relatively low in India, however those who are  online are very active in connecting & talking about brands, and  online are very active in connecting & talking about brands and researching them online Global India Internet 30% 8% Penetration % of Internet users % of Internet that: users that: Go online daily 68% 45% Are brand fans on SN 33% 43% Write about brands  47% 63% online Research brands  81% 80% online
  41. 41. Among the digitally connected, Internet for leisure is narrowing the gap  between itself and traditional media, likely due to the rise in social  between itself and traditional media likely due to the rise in social networking Daily users (%) 46 47 45 33 31 28 Internet for leisure TV Radio Internet for work Newspapers Magazines
  42. 42. Mobile phones are fast catching up with PCs at home and Internet café  as a preferred means to access Internet as a preferred means to access Internet Used in last month (%) 53 48 30 16 7 5 PC at home PC at work PC at school/university PC at Internet café PC elsewhere Mobile phone
  43. 43. Internet access on mobile phones has been adopted in large numbers by  males and younger users males and younger users Total Male Female Share of weekly time online (hrs) 16-20 21-24 25-34 PC: home PC: work/school 35-44 45-54 55-65 PC: Internet café PC: Elsewhere Mobile Other device
  44. 44. Entertainment and communication take up the majority of Indian users’  time online  time online Share of time for Social networking & connecting online activities Communication C i ti in average 1.5  Email 2.9  week (hrs) 1.7  Multi‐media & entertainment Online gaming 6 1.6  2.7  Personal interest Entertainment Shopping 2.0  Pre‐purchase & browsing 2.2  Knowledge & education Information 1.3  News, sport & weather 1.4  2.1  Personal admin 2.1  Management Planning and organising
  45. 45. Indians are open to learning about brands online, and they also see  Social Networks as a good platform to make purchases Social Networks as a good platform to make purchases • Talk to me/sell to me – where should your focus be across markets? SN ‐ Good place to learn about brands SN ‐ are/would be a good place to buy products (%) 62 63 65 63 62 65 60 59 61 58 59 61 58 59 61 60 56 57 Total Male Female 16‐20 21‐24 25‐34 35‐44 45‐54 55‐65 * *Caution: Low base
  46. 46. Travel attracts the maximum online research followed by consumer  durables such as TV & New Car durables such as TV & New Car % researching online % researching at all 84 82 78 76 76 73 73 74 69 51 53 54 42 41 44 44 38 40 Cleaning Food Personal Hygiene Alcohol Presc. Med Credit Cards New Car TV Travel
  47. 47. I love Beautiful  Il B if l women,Love them more when  they move y
  48. 48. Video will Rule Video will Rule 2012● Over 10 Times higher eye ball ratios Eyeball Ratio  Number of times the ad is viewed/Number of times the ad is servedEyeball Ratio =Number of times the ad is viewed/Number of times the ad is servedFor a banner ad this ratio is 0.1‐0.4. For video ad it is as high as 0.90● Over 15‐20 times higher Eyeball attention time
  49. 49. Gen X & Gen Y‐ We know G G Y k them better the bette Now
  50. 50. Gen Z Born after 2000 and weaned on  smartphones, these kids are the first true  h h kid h fi digital natives. For many families, this  gadget‐savvy group that’s up on all things  Web is the go‐to source for information,  giving Gen Z major influence over  household purchasing decisions and  household purchasing decisions and behaviors. This generation is also more brand aware than any before it (by age 4, a  child can recognize hild i almost 100 brands).
  51. 51. Mobile is everything for the customerHow personal ? Very ! A mobile phone or its wiser – Lose wallet ‐ report in 26 hours;  p cousin ‘the smart phone’ is the phone lose mobile ‐ report in 68  the customers wallet, minutes  computer, camera, social – 60% of married mobile owners  60% of a ed ob e o e s hangout, a gaming d i h t i device, wont share w/spouses (Unisys) mobile bank and yes a phone – 68% of teens wont allow  parents to see phone contents  parents to see phone contents too. Use of location based (Wired) services, e-money, mobile – 6 out of 10 people sleep  advertising and e-commerce w/cellphone in bed (BBDO) in bed (BBDO) will increase manifold. – 70% use their phone as alarm  clock (Nokia)
  52. 52. India has more mobile phone users  than  India has more mobile phone users than people with access to toilets 54
  53. 53. Mobile is everything for the customer Wake Up p Commute Work Commute Unwind 7am   8am     9am 6pm     7pm           10pm TV Radio Radio TV InternetNewspaper Newspaper Newspaper Internet Outdoor Outdoor MOBILE
  54. 54. Mobile is everything for the customer•With more than 800 mn mobile subscribers, India has more mobile phone users than people with access to toilets. •Some 13 billion adverts are already sent to mobile devices in India every month.•Two‐thirds of all Indian e‐commerce comes from mobile devices
  55. 55. Wherever, Whenever, Whatever Some    Experiences And Results that Created Happiness Scope  Exposure  ROI Creativity Human And the  Internet  I t t
  56. 56. • 12.1 Crore Internet users• 9.2 crore urban areas• 2.9 crore rural areas• Active users 9.7 crore• Urban 7.3 crore• Rural 2.4 crore
  57. 57. Composition of audience and time spend
  58. 58. Reach of key categoriesinternet advertising, at $300 million, has already overtaken advertising on radio.
  59. 59. Not an end of TVNot an end of TVNot in IndiaNot as of nowN t f
  60. 60. Over 550 channels killing each other Source : TAM
  61. 61. 236 208Projected CAGR (2011‐2015)• Circulation : 2%  183• Advertising : 13% 162 143 126 108 110 100 85 69 65 67 68 70 71 72 74 60 64 48 54 2005 2006 2007 2008 2009 2010 2011 (P) 2012 2013 2014 2015 (P) (P) (P) (P) Circulation Advertising *Source : KPMG
  62. 62. Phase III licensing to bring in more players (more than 600 stations in 250 cities across the country)
  63. 63. Gen ZConsumer Engagement Platform 2012Consumer Engagement Platform 2012• Bollywood Generation Z (also known as Generation M, the Net Generation, or • Hollywood the Internet Generation) Born after 2000 and weaned on smart Internet Generation) Born after 2000 and weaned on smart • Live Music phones, these kids are the first true digital natives. For many families, • Cricket this gadget‐savvy group that’s up on all things Web is the go‐to • Soccer source for information, giving Gen Z major influence over household  purchasing decisions and behaviors. This generation is also more  brand aware than any before it (by age 4, a child can recognize  y ( y g , g almost 50+ brands).
  64. 64. things to watch in music; 2012 Source ‐
  65. 65. 100 things to watch in 2012 Source ‐
  66. 66. Disclaimer Some of the contents/creative’s used in this presentation has been downloaded from different p sources.I would like to thank all the sources from which these contents/creative have been taken.
  67. 67. Innovate, set new trends and stay fresh and focused