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Emerging Sectors in India
Transcript of Emerging Sectors in India
Current Economic Situation :->
Reserve Bank of India data (as on March 2012) states that Real GDP (INR billion) has increased from being 32,542(2005-06) to 52,220(2011-12) which is 60% higher .
IMF WEO Database shows a 38% increase in Real Per capita GDP Income from 2005-06 to 2011-12.
There has been a increase of 194% in the Exports from 2005-06 to 2011-12 according to Reserve Bank of India data.
A jaw dropping increase of 414% has been recorded in FDI inflow in the year 2005-06 to 2011-12.
India acquires second place in the real GDP from 2006-11 only after China.
How much are the markets fertile ?
Ongoing economic liberalisation and strong domestic demand back the Indian Economy.
Stable financial system is just one another factor through which is India is able to attract major players of the Global market to Domestic level.
THE BIGGER THE BETTER India's economy has been ranked Third largest in world.
Major Emerging Sectors in India :
ENTERTAINMENT & DIGITAL INNOVATION
LIFE SCIENCES AND HEALTHCARE
SKILLS AND EDUCATION
AVIATION : Taking Off Like Never Before
Major Players and their respective Market Share
Total domestic passengers carried between January and April 2013 were 20.289 million.
The air transport (including air freight ) in India has attracted Foreign Direct Investment (FDI) worth $449.26 Million from April 2000 To March 2013.
The aviation industry supports close to 0.5% of Indian GDP and some 1.7 million high-productivity jobs.
It is a major component of the country’s infrastructure. Large scale airport projects at Delhi and Mumbai have contributed to their development.
Current Developments :->
Jet Airways, India's second largest airline by market share, is in talks with Abu Dhabi-based Etihad airways for a strategic alliance in the light of the discussions, the two have been involved in various collaborative agreements.
The UN Aviation watchdog, which had clubbed India among 13 nations with the worst record of air safety oversight, has removed the country from its blacklist after a compliance audit of the Indian aviation regulator recently.
Kingfisher Airlines, one of the largest Indian airlines shut shop.
AirAsia announced its Indian low-cost subsidiary on 19 February 2013. The airline would be operated as a joint venture between Tata Sons and AirAsia, with AirAsia holding 49% of the airline. Lakshmi Mittal's son in law Amit Bhatia will take up 21% and Tata Sons will take up a stake of 30% in the airline.
FUTURE PROSPECTS :->
The market certainly has potential. less than 3% of indians fly. india’s market size is projected to multiply in the next ten years from the current 60 million to 450 million passengers
Though most airlines are losing money, india is among the fastest growing market. till 2011, it was growing in double digits.
The most promising segment is of no-frills carriers. airlines that can cut costs and improve efficiency will succeed.
Major growth is being seen in tier ii cities along with the metros.
Despite recent dip in air traffic, nobody doubts the fact that in long term there will be tremendous growth.
India With over 1.2 billion people, of whom 572 million are under the age of 24, is a country with the biggest youth population in the world.
Rising income levels and the change in consumer choices are creating a greater demand goods, cars, mobile phones, leisure items, travel shopping malls and Western brands. India matters, to world having millions of affluent brand conscious customers and a growing middle-class presents significant opportunities .
Acc to IEBF research India will have added 1 bn people - almost its entire current population - to the MIDDLE CLASS by 2039. A sizeable proportion of this expanding middle class hail from small town India and are emerging as a force to reckon with. They have deep pockets and a real desire to spend it on luxury goods
According to Standard Chartered Bank report 2011, there will be:
:-A five-fold increase in per-capita income by 2030 will give rise to a huge middle class
:-The breach of important income thresholds is likely to unleash huge consumer spending
ENTERTAINMENT & DIGITAL INNOVATION :->
The media and entertainment industry consists of many different segments under its folds such as television, print, and films. It also includes smaller segments like radio, music, OOH, animation, gaming and visual effects (VFX) and Internet advertising.
Entertainment Industry in India has registered an explosive growth in last two decades making it one of the fastest growing industries in India
Entertainment industry in India is expected to expand by 12.5% every year and is likely to reach US$ 20.09 billion by the year 2013
The Indian healthcare industry, which comprises hospitals, medical infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health insurance and medical equipment.
Valued at US$ 79 billion in 2012, and is expected to reach US $160 billion by 2017.
The Indian healthcare sector is expected to grow at about 15 percent year-on-year
The growth of the Indian healthcare sector is further driven by the 300 million strong middle class population with significant disposable income, which is likely to demand superior healthcare services
LIFE SCIENCES AND HEALTHCARE
Can you see the Difference ??
India Retail Sector :
The tourism industry of India is economically important and grows rapidly. The World Travel and Tourism Council calculated that tourism generated $121 billion or 6.4% of the nation's GDP in 2011
It was responsible for 39.3 million jobs, 7.9% of India's total employment. The GDP of the tourism sector has expanded 229% between 1990 and 2011
The sector is predicted to grow at an average annual rate of 7.7% in the next decade
According to provisional statistics 6.29 million foreign tourists arrived in India in 2011, an increase of 8,9% from 5.78 million in 2010
India is ranked fifth among countries with the fastest growing tourism industry.
1)ORGANISED:corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.
2)UNORGANISED:the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors
Is the Unorganised Sector able to cater needs
of Modern Indian Consumer ??
SKILLS AND EDUCATION :->
Change in the Customer Behaviour :
Traditional: Save & Buy Vs. Modern: Shop till you
Mentality drop Mentality
The Modern Indian Customer :
1)Orientation to Western / Developed Markets
2)Expert Variety of Choices
3)Aware of Quality Standards
The Indian education system is one of the largest in the world. The education sector is divided into two main segments; the core segment comprises of schools and higher education, while the non-core comprises of coaching classes, pre-schools and vocational trainings.
Realising the fast growth of education sector in India, many private companies are looking for relevant acquisitions and alliances in this space.
Major investments are being seen in the areas of pre-schools, private coaching and tutoring, teacher training, the development and provision of multimedia content, educational software development, skill enhancement, IT training and e-learning.
Indian retail has evolved into a major growth opportunity:
1)Retailing Industry in India is estimated at INR 15.5 trillion growing at CAGR of 15 to 20 %
2)Organized Retail accounts for 5-8% which is lowest compared to its peers in BRIC countries –Brazil (38%), Russia (33%) and China (20%)
3)The retail and wholesale sector in India accounts for approx 14% of GDP
4)In terms of employment, the sector is second largest employer providing over 10% of all formal jobs
Supported by Strong Economic Fundamentals
1)India has witnessed a robust growth rate of 9% p.a. from 2005 to 2008 and an impressive growth of 6.7% in 2009 despite the global downturn
2)72.2% of India’s population resides in rural areas. High agriculture growth rate offers huge potential.
3)Households forming ‘rich class’ have grown at CAGR of 35% during and that of ‘Major consuming class’ have grown at a CAGR of 11 %.
KEY PLAYERS IN INDIAN RETAIL SECTOR
AV Birla Group
has a strong presence in apparel retail and owns renowned
brands like Allen Solly, Louis Phillipe, Trouser Town, Van Heusen and Peter
England. The company had investment plans to the tune of Rs 8000 – 9000
crores till 2010.
is a subsidiary of the Tata group; it operates lifestyle retail chain, book
and music retail chain, consumer electronic chain etc. The aggressive expansion of Trent is expected to help the company clock a top line of Rs 5,000 crore in the next two to three years from the Rs 1,844 crore it posted in 2011-12.
K Raheja Corp Group
has a turnover of Rs 6.75 billion which is expected to cross US$100 million mark by 2010. Segments include books, music and gifts, apparel, entertainment etc.
has more than 300 Reliance Fresh stores; they have multiple formats and their sale is expected to be Rs 90,000 crores ($20 billion) by 2009-10.
has 450 stores across the country and revenue of over Rs. 20 billion and is expected to touch 30 million by 2010. Segments include Food & grocery, e-tailing, home solutions, consumer electronics, entertainment,shoes, books, music & gifts, health & beauty care services.
RETAIL IN INDIA - A CHALLENGE
The retail industry in India is growing at a significant pace. However, there are several problems faced by the industry. The major challenges for the organized sector include:
Taxation laws that favor small retailers.
Different structure of sales tax in different states.
Multi-point octroi collection.
Lack of trained workforce.
Problems of supply chain and logistics.
High cost of real estate.
Limited land available at prime locations.
Scenario ofThe Indian Renewable Energy Market
Most developed renewable energy market in South Asia, with an annual revenue of about $185 billion.
Third most attractive country to invest in renewable energy.
The demand-supply gap in power is currently at 10.3% and is one of the key drivers of renewable energy .
Utilization of renewable energy sources is still relatively low in India, thus presenting excellent business potential.
According to the Indian Government the renewable energy sector grew to $19 billion from 2008 to 2012
-renewables making up 20% of the 70,000 MW (total additional energy requirement)
Been attracting over $3 billion every year in renewable sector
building refineries that can process and burn it into ethanol
energy carried by ocean waves, tides, salinity, and ocean temperature differences.
Two types – 1. Wave power
2. tidal power
Enhanced geothermal systems
Experimental solar power
Concentrated photovoltaics (CPV) systems employ sunlight concentrated onto photovoltaic surfaces for the purpose of electricity generation.
Thermoelectric, or "thermovoltaic" devices convert a temperature difference between dissimilar materials into an electric current.
What Is Needed To Exploit This Tremendous Opportunity?
Effective strategies and implementation plans
A clear understanding of the Indian renewable energy market structure and its dynamics- number of suppliers/competition
-government policies and incentives
-key bottlenecks and barriers etc.
• Insights into the existing sales channels for the incumbent players in the market.
• Understanding the key levers for sales and marketing success in the industry
• Estimates of the possible sales targets by a new entrant
• Estimates of investments required for a defined scope of operations.
• Government policies in the context Indian market entry by foreign firms
• A step-by-step roadmap of how to start off operations
Up to 80 percent accelerated depreciation for renewable energy investments
Relief in customs duty, excise duty and sales tax
Exemption from Central Sales Tax, and customs duty concessions on the import of material, components and equipment used in renewable energy projects Soft loans
Government policies covering wheeling, banking, buy-back, and third-party sale of power
Generation-based incentives for solar and wind power projects
FOREIGN INVESTMENT POLICY
Foreign investors can enter into joint venture with an Indian partner for financialand/or technical collaboration and for setting up of renewable energy-based power generation projects.
Liberalised foreign investment approval regime to facilitate foreign investment and transfer of technology through joint ventures
Proposals for up to 74% foreign equity participation in a joint venture qualify for automatic approval
Various chambers of commerce and industry associations in India can be approached for providing guidance to the investors in finding appropriate partners
Foreign investors can also set up a liaison office in India
Government of India is also encouraging foreign Investors to set up renewable energy-based power generation projects on build-own-operate basis
What exactly retailing mean ??
Retailing is the interface between the producer and the individual consumer buying for personal consumption, this exclude direct interface between the manufacturer and institutional buyers such as government and other bulk consumers
F D I
Is it just Investment ?
International bank for reconstruction and development(IRBD) and United
nations conference on trade and development (UNCTAD). “FDI refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy. It is non-volatile, non-debt creating and results in economic development, modernization and employment generation in the economy”.
Impact of FDI in India
SECTOR WILL BECOME MORE ORGANISED:
a recent study by CII and Boston Consulting Group estimated that the Indian retail sector would grow to US$ 1.25 trillion by 2020.
: FDI in retail will attract big retail giants in the country who will bring big money to contribute towards infrastructural developments in the country.
CREATES MORE JOBS
: When big retail giants like Wal-Mart, IKEA and TESCO etc. come to India for expansion of their retail business they need more man power resulting in creation of more jobs.
with the entry of big retail giants in the retail sector, the retail sector will become more competitive and transparent
ALL THE PARTIES WILL BE BENEFIT
: FDI in retail will provide benefits to all the parties viz.. Consumers by better quality at lower price, farmers with greater transparency and corporate with greater profits.
Cheaper production facilities:
FDI will ensure better operations in production cycle and distribution. Due to economies of operation, production facilities will be available at a cheaper rate thereby resulting in availability of variety products to the ultimate consumers at a reasonable and lesser price.
Availability of new technology:
enables transfer of skills and technology from overseas and develops the infrastructure of the domestic country. Greater managerial talent inflow from other countries is made possible. Domestic consumers will benefit getting great variety and quality products at all price points.
Future Prospects :
In the last four year, the consumer spending in India climbed up to 75% By the end of the year 2013, the organized sector is also expected to grow at a CAGR of 40%. The total number of shopping malls is expected to expand at a CAGR of over 18.9 per cent by 2015.
Thus it can be said that FDI in retail could change
the face of Indian retail by offering quality goods at lower prices to the consumers.
In addition to this, the presence of global retailers in Indian retail industry will further enhance exports from India as they would also source Indian goods for their international outlets in a big way leading to a remarkable increase in Indian exports.