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Indian Urban Market- Brief Overview
The Indian urban market, is expanding its footprints in a big way. It is urban India which is propelling the growth of the
economy as it drives the progress of major sectors. Moreover, according to Nielson Global Survey of Consumer
Confidence and Spending Intentions for the foruth quarter of 2011, Indians are the most optimistic clan for the eighth
consecutive quarter with consumer confidence index measured at 122 points, followed by Indonesia and Philippines
at 117.
India's rapid urbanisation is reflected by the latest Census 2011 which states that 31.2 per cent of the total population
lives in urban areas compared with 27.8 per cent in 2001 and 25.5 per cent in 1991. The number of towns also rose
53.74 per cent to 7,935 in the last decade.
Indian urban markets major deal in sub-segments namely retail, fast moving consumer goods (FMCG), consumer
durables, automobiles and luxury brands. Major developments pertaining to each of these are discussed hereafter.
Retail
Business Monitor International (BMI) has recently released its India retail report for the first quarter of 2012 which
projects that total retail sales will grow from US$ 422.09 billion in 2011 to US$ 825.46 billion by 2015. Explosion of
organised retail in a big way is one of the major factors behind such a positive forecast. Certain developments in this
space are given below:
- Kama Schachter, the diamond jewellery manufacturer and exporter, has plans to
venture into India's retail market. The company would infuse a capital of Rs 50-70 crore (US$ 10.16-14.23 million)
for building brand, marketing and for opening retail store in 2012. The jeweller plans to open around 20 stores in
India, starting with Mumbai and Delhi, within a span of five years
- The Chennai-based healthcare major Apollo Hospitals is planning to adopt retail
model to expand the basket of its offerings. The hospital chain, planning to invest around Rs 1, 650 crore (US$ 335.46
million), is currently working to formulate a detailed strategy on how to take the healthcare through retail format. The
plan is expected to be ready by March 2012
- Auchan, the second largest French grocer after Carrefour, is holding discussions
with the Landmark Group to foray into Indian business space. Landmark Group currently runs the Dutch retail chain
Spar in India
Cumulative foreign direct investment (FDI) inflows in single-brand retail trading during April 2000 to November
2011 stood at US$ 44.45 million, according to the Department of Industrial Policy and Promotion (DIPP).
FMCG
FMCG companies in India are no more confined to domestic boundaries to propel their growth. As the consulting firm
PriceWaterhouseCoopers (PwC) indicates, they are searching for newer markets to enhance their visibility and hence,
are headed towards the Global Emerging Middle (GEM) nations. PwC projects that purchasing power of these
geographies would swirl from the current US$ 2.7 trillion to US$ 6 trillion by 2021, with the Indian FMCG segment
poised to account for at least US$ 300 billion.
- FMCG firm Marico has acquired a part of the personal care business of Paras
Pharma owned Reckitt Benckiser India for an undisclosed amount
- In a bid to consolidate its position in the dairy segment, FMCG major CavinKare has
launched ultra-high temperature (UHT)-treated milk - Cavin's Pure+ -, which can last for 120 days, without using
refrigerator. While the processing technology was procured from Holland, the packaging was developed in
collaboration with a Mumbai-based packaging firm
Automobiles
India is the world's second fastest growing auto market and boasts of the sixth largest automobile industry after
China, the US, Germany, Japan and Brazil.
The cumulative automobile production for April-December 2011 registered a growth of 14.94 per cent over same
period in 2010. Production in December 2011 increased year-on-year (Y-o-Y) by 10.91 per cent.
Overall automobile exports registered a growth rate of 28.97 per cent during April-December 2011. Passenger
Vehicles registered grew 18.14 per cent in this period while two-wheelers, commercial vehicles and three wheelers
segments recorded growth of 29.75 per cent, 24.66 per cent and 42.63 per cent respectively.
- With an intention to take on Maruti Suzuki India Ltd's largest-selling Alto hatchback,
Nissan Motor Pvt Ltd is planning for a small car for Indian markets. The company is studying the market currently
and would come up with a crisp plan in 2-3 years
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