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India Today

India Today. Prof. Atul Tandan Director, MICA. Know India. Population Ownership & Consumption Media Industry Entertainment Industry. Population. 2.5% of the world’s land mass 16% of the world’s population

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India Today

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  1. India Today Prof. Atul Tandan Director, MICA

  2. Know India Population Ownership & Consumption Media Industry Entertainment Industry

  3. Population • 2.5% of the world’s land mass • 16% of the world’s 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

  4. 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 • Indian’s urban working population is as much as the total working population of France and Italy Thus India represents a young country full of opportunities

  5. 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

  6. 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

  7. Rural Wallet A fourth of the expense is on Groceries

  8. 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

  9. 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

  10. 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

  11. India: A Statistical View Macro Economic Indicators Engines of Economic Growth Major Market Trends

  12. Selected Macro Economic and Financial Indicators 1980 – 2010

  13. 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% oftotal labor force • Rate of Investment is 30% of GDP • Rate of Savings is 30% of GDP

  14. 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

  15. 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

  16. Macro Economic Indicators FDI Inflows August ‘91 – Jan ‘06

  17. 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

  18. Segmentation of Household (in mln) Source: NCAER

  19. 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

  20. 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

  21. 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

  22. 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

  23. 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

  24. Major Market Trends • Shifting Determinants of Development • Manufacturing to Services to Value Added Services • Capital Resource to Knowledge Resources to Intellectual Supremacy

  25. Knowledge Resources • Technology • Organisation • Information • Education • Skills All combined, is the broader framework of IMC industry.

  26. 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.

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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

  32. 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

  33. 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

  34. Brands In India

  35. Brands in India

  36. Brands in India

  37. Brands in India

  38. Top Ten Indian Brand’s ‘05

  39. India’s Largest Brands

  40. 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

  41. Indian Retail Industry * Projected Figures

  42. Fashion and Lifestyle * Projected Figures

  43. 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

  44. 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.

  45. 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……..

  46. India Everywhere!!

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