The Indian Premium Brand Industry. DIBD India

Transcription

1 The Indian Premium Brand Industry DIBD India

2 Agenda Current market situation Fashion industry Automobile industry Key drivers Consumer segmentation Challenges Danish cases in India Future perspective

3 Current Market Situation Large domestic market, and rising domestic demand is a major driver of economic growth Indian consumers continue to urbanize, have more money to spend on non-food purchases, and have increasing exposure to brands. The result is a powerful, more discerning consumer class Luxury market growth is spreading beyond the metro cities, as adoption of global trends is rapidly catching up in smaller cities as well

4 Current Market Situation The Indian luxury market is estimated to have reached USD $5.8 BN in 2010 The jewellery, electronics and auto sectors have grown the most, at a rate of between 30% - 40% in the past year Currently, India only allows complete foreign ownership in its wholesale retail sector, and max 51% foreign control in its single-brand retail sector India attracted the most new brand retailers in 2010

5 Fashion Brands in India Italian clothing retailer Benetton expects its business generated in India to contribute significantly to overall revenues in the next 10 years. Benetton India surpassed the USD $100 million turnover mark in 2009 and expects to hit USD $250 million in the next four to five years Spanish retailer Zara opened its first store in 2010, while Polo Ralph Lauren and Diesel are also expanding

6 Automobile Industry The luxury car market in India has registered a fair amount of growth in the last few years, and is growing at the rate of 25% per year Audi, BMW and Mercedes will open 38 new dealership outlets between them, to meet the demands for its vehicles Rolls Royce, Bentley, Porsche and Lamborghini have all made an entry into the Indian market in the last few years

7 Key Drivers For The Demand of Luxury Goods Improvements in lifestyle Increasing brand awareness Credit availability Increasing spending power Increasing personal disposable income Established consumer base

8 Consumer Segmentation Population by Income National Income Share Consumption Share Top 10% 34.1% 30.0% Middle 30% 36.1% 36.6% Bottom 60% 29.7% 33.4% The Indian top 10% is comprised of slightly more than 100 million people, who account for 30% of India's consumption This segment is nearly double the size of France and five times the size of Australia

9 Income Distribution Income Classes Urban 30% Rural 70% Upper 35.9% 6.1% Upper Middle 16.3% 6.5% Middle 21.7% 22.3% Lower Middle 21.4% 42.5% Lower 4.7% 20.6% India s income classes are fragmented and are different depending to the regions Rural India is primarily dependent on agriculture and represents nearly 50% of India s GDP, but 70% of the population The majority of India s purchasing power is confined to the urban areas

10 Challenges Distribution remains a major challenge to retail expansion, with retailers often having to invest heavily in the supply chain before opening new stores International retailers are restricted by India s strict FDI regulations. Single-brand retailers are able to own a 51% majority stake in a joint venture with a local partner, but multi-brand retailers must operate through a franchise or cash-andcarry wholesale model

11 Danish Cases in India B&O entered India in 2005 and has five dealerships in the country B&O is set to grow and expand in India, since they see a lot of potential in the country Plans to open five more dealerships by 2013 Bestseller is present with the brand names: Jack & Jones, Only, Pieces and Vero Moda. Bestseller plans to establish 100 retail stores by 2013 Currently operates in the top 20 cities

12 Future Perspective Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast explosive growth in premium product sales A potential liberalisation of retail foreign direct investment regulations will attract more multinationals to the country and further stimulate mass retail sales growth The online retail market is estimated to be worth around USD $1.57BN by 2016

13 Want to know more... Want to get more hands-on knowledge about the growing market opportunities for Danish companies in the huge yet complex Indian market... DIBD offers two points-of-contacts: Anders Kjøller Manager, DI Copenhagen E: P: (+45) M: (+45) Kunal Singla Director, DI India E: P: (+45) M: (+91) Anders works as Manager with focus on Asian markets in DI. He has over 10 years of project experience from projects in Asia. Anders has over 4 years of hands-on experience in the field from the Chinese market gained as Director of DI s office in Shanghai ( ). Experience from several projects within the marine, food and utility industries amongst others with business development, market studies, implementation of market entry strategies as well as implementation of distributor management. Anders has a M.Sc. Economics & M.A. East Asian Studies. As the director of DIBD s office in Mumbai, Indian-Danish Kunal is the man on the ground in India. Kunal has substantial hands-on experience with various projects (including partnership searches etc.) and recruitment in India. Kunal also has previous experience from the Commercial Department at the Royal Danish Embassy in New Delhi, and DI s Business Law department in Copenhagen. Kunal is fluent in Danish, English and the Indian national language Hindi, and has an extensive network in the Indian business community. Kunal holds a M.Sc. in Business Administration and Commercial Law from Copenhagen Business School, and has studied in the United States and China.