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India A Country with limitless potential

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					Welcome to India - A
country with limitless
potential
                     Topics
   India – A Consuming Economy
   Trends in office products business
   Current distribution channel for office
    products
   Current and future potential demand of
    office products
   Buying behavior in various corporate sectors
   India, the future’s biggest market for office
    products
    Why India – A Consuming Economy ?

          Rising GDP growth
                         8
                         7
                         6
                         5
                 % age




                         4
                         3
                         2
                         1
                         0
                             1900-1950          1950-1980           1980-2002          2002-2006

Sources: 1900-1990: Angus Madison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001), 2000-2005 Finance
Ministry
    Slowdown in Population growth

               2.5

                2

               1.5
       % age




                1

               0.5

                0
                     1951-1980         1981-1990          1991-2000         2001-2010
Sources: 1900-1990: Angus Madison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001)
   Growing Literacy


              80
              70
              60
              50
      % age




              40
              30
              20
              10
               0
                          1950                1990   2000   2010(proj.)


                   Source: Census of India (2001)
   Exploding Middle Class
                 400
                 350
                 300
                 250
      Million




                 200
                 150
                 100
                   50
                    0
                             1980              2000          2010(proj)
                Source: The Consuming Class, National Council of Applied Economic Research, 2002
     Poverty Decline

        50
        45
        40
        35
% age




        30
        25
        20
        15
        10
         5
         0
             1980   2000   2010
Growing                   Per Capita Income

                 6000

                 5000
 EUR per annum




                 4000

                 3000

                 2000

                 1000

                    0
                            1980       2000   2020*
                  Source: World Bank          * MGI
   Growing Productivity

   High Growth in Service sector, IT, ITES,
    Bio Technology, Telecom, Retail

   Annual salaries across the board growing at
    15% YoY
     The Shape of the Economy

          Industry                           Industry
           26%-      Service                  28.1%     Service
                      54%                                56.6%


                                                                       Service
                                                                       Agriculture
                                                                       Industry

    GDP: 443 billion EUR (2005-06)    GDP: 642 Billion EUR (2010-11)




Source – Planning Commission report
A Billion Buyers Marketplace
           Trends In OP Business
   Office Supplies market estimated to be huge in
    India (6.4bn EUR)
   95 % market is unorganized growing at a pace of
    10%
   5 % market is organized growing at a pace of 40%
    per annum
   Major global brands have entered Indian market
Unorganized 95 %
Organized Stores 5%
   Industry estimates the over all market to grow by
    15% approx.
   Certain categories are growing at the rate of 30%
    such as office furniture, ribbon, toner, cartridges,
    electronics, Computer hardware's
   Average per employee per annum consumption is
    around 84 EUR of office stationery
   Dependence on multiple suppliers in current
    system
   Gap between MRP and net landing to
    retailer is as high as 30 to 40 %

   Market operating price keeps fluctuating

   Pressure on margins is on the rise

   Imports are on the rise in key categories

   Major Indian manufacturers are entering
    into organized retail
   High brand loyalty

   9 tier 1 cities are having 70 to 80 % consumption
    of office products, Greater Mumbai, Delhi NCR,
    Banglore, Chennai, Hyderabad, Kolkata,
    Ahmedabad, Pune, Chandigarh

   Organized suppliers are offering proper
    replacement policy to satisfy customers

   Key to success in OP business is strong supply
    chain management
       Distribution Channel In OP
   Complex
   Manufacturer
   Importer
   Large Format Retail Chain
   Regional Distributor
   Town Distributor
   Wholesaler
   Retailer
                                                 Office Products


                       MNC/IND Mfg
                                                                                Importers



               Traditional                   Modern
                  Trade                       Trade
                                                          Wholesaler   Distributor      Retail
                                                            8%             8%         Chain 50%
                   Regional
                  Distributor
                      4%

                                                                   Retailer 30%
          Whole                      Town         Large Retail
         Saler8%                Distributor 8%    Chain 40 to
                                                     50%
                Retailer 30%



* Margin in percentage of MRP                      End Consumer
Current & Future Potential Demand
   Current OP market is estimated to be 6.4
    billion EUR

   Current Growth 15%

   Broad categories
        Office stationary
        Electronics
        Office furniture
        Business service
Sub categories & contribution
                    Copy Paper 20%
                    Paper Products 6%
                    Office Furniture 15%
                    Ribbon,Toner,Cartridge 6%
                    PC Hardwares 8%
                    Electronics 15%
                    Writing Instruments 5%
                    Adhesive 3%
                    Filing Supplies 5%
                    Visual Presentation 2%
                    Desk Accessories2%
                    Packaging Supplies 2%
                    Secretarial Supplies 2%
                    Forms 1%
                    Envelops 2%
                    Business Services 2%
                    Pantry Food 1%
                    Leather & Canvass Product 3%
                PC Hardware
   Notebook PC market growing much faster then
    desktop
   SOHO sector contributing to notebook growth
   Portability rather then mobility number 1 reason
    for sustained growth
   Desktop future growth likely to come from SMB
    enterprises
   HP is the market leader with 21.6% market share
    followed by HCL at 12.3% & Lenovo at 10.3%
Toners, Ribbon & Ink Cartridges
   Market estimate 0.38bn EUR
   Year on year growth 30 %
   HP has the highest market share
   HP has 1000 original cartridge stores
   Remanufacturing and Recycling industry
    largely unorganized and fragmented
   Cartridge world has entered the market
              Office Furniture
   Market estimate 1bn EUR (approx)

   YoY growth – 30%

   India tops in furniture imports

   Import duty rationalized

   Growing demand of office space
              OP market future projections
               14
               12
               10
Billion EUR




               8
               6

               4
               2
               0
                    2007   2008   2009   2010   2011   2012
Office Products Buying Behavior

                      Buying Behavior




Small Organization   Medium organization   Large Organization
            Macro Parameters

   Rate Contract/ Rates
   Method of buying
   Levels in decision making
   Storage space
   Personal relationship
   Service
   Add on benefits
   Strength of the vendor
      Factors              Small Org.      Medium Org.           Large Org.
Mode of Ordering     Via Phone          Phone/Mail/Fax         Mail/Fax/Web
Inventory Norms      No Inventory       Backup Stocks          Backup Stocks
Frequency of         As & when          Twice in a month       Once in a
Orders               required                                  month
Delivery Time        1 hour             24 hours               2 to 3 days
Pricing              Competitive        Competitive            Very
                                                               Competitive
Ownership            Self interest      Self as well as employ Company
                                                               interest prime
Brand Loyalty        Very high          High                   High also open
                                                               for new
                                                               products
Levels in decision   Single             Two                    Various levels
making
      Factors            Small Org.            Medium Org.            Large Org.
Quantum of buying Small quantities          Small quantities       Bulk quantities


Payment Terms       7 days Needs to be      Adhere to credit       Adhere to credit
                    reminded                period 15 to 20 days   period 30 to 45
                                                                   days
Vendor Strength              ----           Strong vendors with    Very strong
                                            warehouse              vendors with
                                                                   warehouse
Service               Expect fast service   Expect excellent       Expect excellent
                                            service                service


Rate Contract                ----           6 months               1 year contract
    Why India Will be the Biggest OP
               Market ?
 1.12 bn population
 Youngest nation in the world over 890
  million people below 45 years
 Remains young nation beyond 2050

< 20 years population 442mn currently
< 20 years population 479mn by 2050
 10 million finishing school, 6 lakhs engineers
  3 million graduates per annum
   Literacy likely to hits 100 % in coming years
   English speaking population more then whole
    Europe
   Highest working population
   India ranked 1st in global retail development
    index
   India is rated among the top 10 FDI
    destinations
   Middle class likely to be 600mn by 2025 (MGI)
   One of the fastest growing economy in the world
   India projected GDP by 2050 is 44 Trillion EUR
   Key sectors contributing to extra ordinary growth
    will be – Telecom, IT, ITES, Biotechnology,
    Health, Education, Insurance, Banking & Retail
   Sizeable presence of MNC’S Intel, IBM, Cisco,
    Motorola, Nokia, Samsung, LG etc.
Come.. explore.. be a part of the
   great Indian opportunity!

          Thank you!

				
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