The 2011-2016 Outlook for Non-Wood Bookstacks and Other Non-Wood Shelving in India by ICONGroup


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									   The 2011-2016 Outlook for Non-Wood
 Bookstacks and Other Non-Wood Shelving
                 in India

                         Professor Philip M. Parker, Ph.D.
                       Chaired Professor of Management Science
                     INSEAD (Singapore and Fontainebleau, France)                                ©2010 ICON Group International, Inc.

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                                        About the Author
Dr. Philip M. Parker is the Chaired Professor of Management Science at INSEAD where he has taught courses on
global competitive strategy since 1988. He has also taught courses at MIT, Stanford University, Harvard University,
UCLA, UCSD, and the Hong Kong University of Science and Technology. Professor Parker is the author of six
books on the economic convergence of nations. These books introduce the notion of “physioeconomics” which
foresees a lack of global convergence in economic behaviors due to physiological and physiographic forces. His
latest book is "Physioeconomics: The Basis for Long-Run Economic Growth" (MIT Press 2000). He has also
published numerous articles in academic journals, including, the Rand Journal of Economics, Marketing Science, the
Journal of International Business Studies, Technological Forecasting and Social Change, the International Journal
of Forecasting, the European Management Journal, the European Journal of Operational Research, the Journal of
Marketing, the International Journal of Research in Marketing, and the Journal of Marketing Research. He is also
on the editorial boards of several academic journals.

Dr. Parker received his Ph.D. in Business Economics from the Wharton School of the University of Pennsylvania
and has Masters degrees in Finance and Banking (University of Aix-Marseille) and Managerial Economics
(Wharton). His undergraduate degrees are in mathematics, biology and economics (minor in aeronautical
engineering). He has consulted and/or taught courses in Africa, the Middle East, Asia, Latin America, North America
and Europe.

                                         About this Series
The estimates given in this report were created using a methodology developed by and implemented under the direct
supervision of Professor Philip M. Parker, the Chaired Professor of Management Science, at INSEAD. The
methodology relies on historical figures across states or union territories. Reported figures should be seen as
estimates of past and future levels of latent demand.

Some of the methodologies and research approaches used in this report have benefited from the R&D Committee at
INSEAD, whose research support is gratefully acknowledged.                                                   ©2010 ICON Group International, Inc.

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    Contents                                                                                         v

Table of Contents
1       INTRODUCTION                                                                             9
     1.1      Overview                                                                           9
     1.2      What is Latent Demand and the P.I.E.?                                              9
     1.3      The Methodology                                                                   10
        1.3.1   Step 1. Product Definition and Data Collection                                  11
        1.3.2   Step 2. Filtering and Smoothing                                                 12
        1.3.3   Step 3. Filling in Missing Values                                               13
        1.3.4   Step 4. Varying Parameter, Non-linear Estimation                                13
        1.3.5   Step 5. Fixed-Parameter Linear Estimation                                       13
        1.3.6   Step 6. Aggregation and Benchmarking                                            14
2       SUMMARY OF FINDINGS                                                                     15
     2.1   The Latent Demand in India                                                           15
     2.2   Top 100 Cities Sorted By Rank                                                        16
     2.3   Latent Demand by Year in India                                                       19
3       ANDAMAN & NICOBAR ISLANDS                                                               20
     3.1   Latent Demand by Year - Andaman & Nicobar Islands                                    20
     3.2   Cities Sorted by Rank - Andaman & Nicobar Islands                                    21
     3.3   Cities Sorted By District - Andaman & Nicobar Islands                                21
4       ANDHRA PRADESH                                                                          22
     4.1   Latent Demand by Year - Andhra Pradesh                                               22
     4.2   Cities Sorted by Rank - Andhra Pradesh                                               23
     4.3   Cities Sorted By District - Andhra Pradesh                                           28
5       ARUNACHAL PRADESH                                                                       34
     5.1   Latent Demand by Year - Arunachal Pradesh                                            34
     5.2   Cities Sorted by Rank - Arunachal Pradesh                                            35
     5.3   Cities Sorted By District - Arunachal Pradesh                                        36
6       ASSAM                                                                                   37
     6.1    Latent Demand by Year - Assam                                                       37
     6.2    Cities Sorted by Rank - Assam                                                       38
     6.3    Cities Sorted By District - Assam                                                   41
7       BIHAR                                                                                   44
     7.1    Latent Demand by Year - Bihar                                                       44
     7.2    Cities Sorted by Rank - Bihar                                                       45
     7.3    Cities Sorted By District - Bihar                                                   48
8       CHANDIGARH                                                                              52
     8.1   Latent Demand by Year - Chandigarh                                                   52
     8.2   Cities Sorted by Rank - Chandigarh                                                   53
     8.3   Cities Sorted By District - Chandigarh                                               53
9       CHHATTISGARH                                                                            54
     9.1   Latent Demand by Year - Chhattisgarh                                                 54
     9.2   Cities Sorted by Rank - Chhattisgarh                                                 55
     9.3   Cities Sorted By District - Chhattisgarh                                             57
10      DADRA & NAGAR HAVELI                                                                    60
     10.1  Latent Demand by Year - Dadra & Nagar Haveli                                         60
     10.2  Cities Sorted by Rank - Dadra & Nagar Haveli                                         61
     10.3  Cities Sorted By District - Dadra & Nagar Haveli                                     61                                            ©2010 ICON Group International, Inc.
 Contents                                                                                   vi

11      DAMAN & DIU                                                                    62
     11.1  Latent Demand by Year - Daman & Diu                                         62
     11.2  Cities Sorted by Rank - Daman & Diu                                         63
     11.3  Cities Sorted By District - Daman & Diu                                     63
12      DELHI                                                                          64
     12.1  Latent Demand by Year - Delhi                                               64
     12.2  Cities Sorted by Rank - Delhi                                               65
     12.3  Cities Sorted By District - Delhi                                           66
13      GOA                                                                            69
     13.1   Latent Demand by Year - Goa                                                69
     13.2   Cities Sorted by Rank - Goa                                                70
     13.3   Cities Sorted By District - Goa                                            71
14      GUJARAT                                                                        72
     14.1   Latent Demand by Year - Gujarat                                            72
     14.2   Cities Sorted by Rank - Gujarat                                            73
     14.3   Cities Sorted By District - Gujarat                                        78
15      HARYANA                                                                        84
     15.1  Latent Demand by Year - Haryana                                             84
     15.2  Cities Sorted by Rank - Haryana                                             85
     15.3  Cities Sorted By District - Haryana                                         87
16      HIMACHAL PRADESH                                                               91
     16.1  Latent Demand by Year - Himachal Pradesh                                    91
     16.2  Cities Sorted by Rank - Himachal Pradesh                                    92
     16.3  Cities Sorted By District - Himachal Pradesh                                94
17      JAMMU & KASHMIR                                                                96
     17.1  Latent Demand by Year - Jammu & Kashmir                                     96
     17.2  Cities Sorted by Rank - Jammu & Kashmir                                     97
     17.3  Cities Sorted By District - Jammu & Kashmir                                 99
18      JHARKHAND                                                                     101
     18.1   Latent Demand by Year - Jharkhand                                         101
     18.2   Cities Sorted by Rank - Jharkhand                                         102
     18.3   Cities Sorted By District - Jharkhand                                     106
19      KARNATAKA                                                                     110
     19.1  Latent Demand by Year - Karnataka                                          110
     19.2  Cities Sorted by Rank - Karnataka                                          111
     19.3  Cities Sorted By District - Karnataka                                      117
20      KERALA                                                                        125
     20.1  Latent Demand by Year - Kerala                                             125
     20.2  Cities Sorted by Rank - Kerala                                             126
     20.3  Cities Sorted By District - Kerala                                         130
21      LAKSHADWEEP                                                                   134
     21.1  Latent Demand by Year - Lakshadweep                                        134
     21.2  Cities Sorted by Rank - Lakshadweep                                        135
     21.3  Cities Sorted By District - Lakshadweep                                    135
22      MADHYA PRADESH                                                                136
     22.1  Latent Demand by Year - Madhya Pradesh                                     136
     22.2  Cities Sorted by Rank - Madhya Pradesh                                     137                                   ©2010 ICON Group International, Inc.
 Contents                                                                                   vii

     22.3    Cities Sorted By District - Madhya Pradesh                               147
23      MAHARASHTRA                                                                   157
     23.1  Latent Demand by Year - Maharashtra                                        157
     23.2  Cities Sorted by Rank - Maharashtra                                        158
     23.3  Cities Sorted By District - Maharashtra                                    167
24      MANIPUR                                                                       176
     24.1  Latent Demand by Year - Manipur                                            176
     24.2  Cities Sorted by Rank - Manipur                                            177
     24.3  Cities Sorted By District - Manipur                                        178
25      MEGHALAYA                                                                     179
     25.1  Latent Demand by Year - Meghalaya                                          179
     25.2  Cities Sorted by Rank - Meghalaya                                          180
     25.3  Cities Sorted By District - Meghalaya                                      180
26      MIZORAM                                                                       181
     26.1   Latent Demand by Year - Mizoram                                           181
     26.2   Cities Sorted by Rank - Mizoram                                           182
     26.3   Cities Sorted By District - Mizoram                                       182
27      NAGALAND                                                                      184
     27.1  Latent Demand by Year - Nagaland                                           184
     27.2  Cities Sorted by Rank - Nagaland                                           185
     27.3  Cities Sorted By District - Nagaland                                       185
28      ORISSA                                                                        186
     28.1   Latent Demand by Year - Orissa                                            186
     28.2   Cities Sorted by Rank - Orissa                                            187
     28.3   Cities Sorted By District - Orissa                                        190
29      PONDICHERRY                                                                   194
     29.1  Latent Demand by Year - Pondicherry                                        194
     29.2  Cities Sorted by Rank - Pondicherry                                        195
     29.3  Cities Sorted By District - Pondicherry                                    195
30      PUNJAB                                                                        196
     30.1   Latent Demand by Year - Punjab                                            196
     30.2   Cities Sorted by Rank - Punjab                                            197
     30.3   Cities Sorted By District - Punjab                                        201
31      RAJASTHAN                                                                     205
     31.1   Latent Demand by Year - Rajasthan                                         205
     31.2   Cities Sorted by Rank - Rajasthan                                         206
     31.3   Cities Sorted By District - Rajasthan                                     211
32      SIKKIM                                                                        217
     32.1   Latent Demand by Year - Sikkim                                            217
     32.2   Cities Sorted by Rank - Sikkim                                            218
     32.3   Cities Sorted By District - Sikkim                                        218
33      TAMIL NADU                                                                    219
     33.1  Latent Demand by Year - Tamil Nadu                                         219
     33.2  Cities Sorted by Rank - Tamil Nadu                                         220
     33.3  Cities Sorted By District - Tamil Nadu                                     239
34      TRIPURA                                                                       260
     34.1   Latent Demand by Year - Tripura                                           260                                   ©2010 ICON Group International, Inc.
 Contents                                                                                   viii

     34.2    Cities Sorted by Rank - Tripura                                          261
     34.3    Cities Sorted By District - Tripura                                      261
35      UTTAR PRADESH                                                                 263
     35.1   Latent Demand by Year - Uttar Pradesh                                     263
     35.2   Cities Sorted by Rank - Uttar Pradesh                                     264
     35.3   Cities Sorted By District - Uttar Pradesh                                 280
36      UTTARANCHAL                                                                   297
     36.1   Latent Demand by Year - Uttaranchal                                       297
     36.2   Cities Sorted by Rank - Uttaranchal                                       298
     36.3   Cities Sorted By District - Uttaranchal                                   300
37      WEST BENGAL                                                                   302
     37.1  Latent Demand by Year - West Bengal                                        302
     37.2  Cities Sorted by Rank - West Bengal                                        303
     37.3  Cities Sorted By District - West Bengal                                    312
     38.1   Disclaimers & Safe Harbor                                                 321
     38.2   ICON Group International, Inc. User Agreement Provisions                  322                                   ©2010 ICON Group International, Inc.
 Introduction                                                                                                           9


This study covers the latent demand outlook for non-wood bookstacks and other non-wood shelving across the states,
union territories and cities of India. Latent demand (in millions of U.S. dollars), or potential industry earnings (P.I.E.)
estimates are given across over 5,100 cities in India. For each city in question, the percent share the city is of it’s
state or union territory and of India as a whole is reported. These comparative benchmarks allow the reader to
quickly gauge a city vis-à-vis others. This statistical approach can prove very useful to distribution and/or sales force
strategies. Using econometric models which project fundamental economic dynamics within each state or union
territory and city, latent demand estimates are created for non-wood bookstacks and other non-wood shelving. This
report does not discuss the specific players in the market serving the latent demand, nor specific details at the product
level. The study also does not consider short-term cyclicalities that might affect realized sales. The study, therefore,
is strategic in nature, taking an aggregate and long-run view, irrespective of the players or products involved.

This study does not report actual sales data (which are simply unavailable, in a comparable or consistent manner in
virtually all of the cities in India). This study gives, however, my estimates for the latent demand, or the P.I.E., for
non-wood bookstacks and other non-wood shelving in India. It also shows how the P.I.E. is divided and concentrated
across the cities and regional markets of India. For each state or union territory, I also show my estimates of how the
P.I.E. grows over time. In order to make these estimates, a multi-stage methodology was employed that is often
taught in courses on strategic planning at graduate schools of business.

Another reason why sales do not equate to latent demand is exchange rates. In this report, all figures assume the
long-run efficiency of currency markets. Figures, therefore, equate values based on purchasing power parities across
countries. Short-run distortions in the value of the dollar, therefore, do not figure into the estimates. Purchasing
power parity estimates of country income were collected from official sources, and extrapolated using standard
econometric models. The report uses the dollar as the currency of comparison, but not as a measure of transaction
volume. The units used in this report are: US $ mln.


The concept of latent demand is rather subtle. The term latent typically refers to something that is dormant, not
observable, or not yet realized. Demand is the notion of an economic quantity that a target population or market
requires under different assumptions of price, quality, and distribution, among other factors. Latent demand,
therefore, is commonly defined by economists as the industry earnings of a market when that market becomes
accessible and attractive to serve by competing firms. It is a measure, therefore, of potential industry earnings (P.I.E.)
or total revenues (not profit) if India is served in an efficient manner. It is typically expressed as the total revenues
potentially extracted by firms. The “market” is defined at a given level in the value chain. There can be latent
demand at the retail level, at the wholesale level, the manufacturing level, and the raw materials level (the P.I.E. of
higher levels of the value chain being always smaller than the P.I.E. of levels at lower levels of the same value chain,
assuming all levels maintain minimum profitability).

The latent demand for non-wood bookstacks and other non-wood shelving in India is not actual or historic sales. Nor
is latent demand future sales. In fact, latent demand can be either lower or higher than actual sales if a market is
inefficient (i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of factors,
including the lack of international openness, cultural barriers to consumption, regulations, and cartel-like behavior on
the part of firms. In general, however, latent demand is typically larger than actual sales in a market.

For reasons discussed later, this report does not consider the notion of “unit quantities”, only total latent revenues
(i.e., a calculation of price times quantity is never made, though one is implied). The units used in this report are U.S.
dollars not adjusted for inflation (i.e., the figures incorporate inflationary trends). If inflation rates vary in a                                                        ©2010 ICON Group International, Inc.
    Introduction                                                                                                      10

substantial way compared to recent experience, actually sales can also exceed latent demand (not adjusted for
inflation). On the other hand, latent demand can be typically higher than actual sales as there are often distribution
inefficiencies that reduce actual sales below the level of latent demand.

As mentioned in the introduction, this study is strategic in nature, taking an aggregate and long-run view, irrespective
of the players or products involved. In fact, all the current products or services on the market can cease to exist in
their present form (i.e., at a brand-, R&D specification, or corporate-image level) and all the players can be replaced
by other firms (i.e., via exits, entries, mergers, bankruptcies, etc.), and there will still be latent demand for non-wood
bookstacks and other non-wood shelving at the aggregate level. Product and service offerings, and the actual identity
of the players involved, while important for certain issues, are relatively unimportant for estimates of latent demand.


In order to estimate the latent demand for non-wood bookstacks and other non-wood shelving across the states or
union territories and cites of India, I used a multi-stage approach. Before applying the approach, one needs a basic
theory from which such estimates are created. In this case, I heavily rely on the use of certain basic economic
assumptions. In particular, there is an assumption governing the shape and type of aggregate latent demand functions.
Latent demand functions relate the income of a state or union territory, city, household, or individual to realized
consumption. Latent demand (often realized as consumption when an industry is efficient), at any level of the value
chain, takes place if an equilibrium is realized. For firms to serve a market, they must perceive a laten
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