India A Country with limitless potential
Document Sample
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!
