New investments being made
Investments
Following are some major investments and developments in the Indian consumer market sector.
- US-based food company Cargill Inc, aims to double its branded consumer business in India by 2020, by doubling its retail reach to about 800,000 outlets.
- Yum!Brands, plans to open 100 Taco Bell outlets in India over the next five years, which makes Indian expansion a key part of its plan to triple its outlets outside US to 1,000.
- Hamleys has stated that India is one of the most important markets for Hamleys globally, and outlined plans of opening six more stores, taking its total store count in the country to 32 by the end of March 2017.
- Roche Bobois Group, outlined plans of opening new stores in cities like Hyderabad, Chennai, Pune, Kolkata and Ahmedabad, in order to make India one of its top five markets by 2021.
- Diageo, the world’s largest spirit maker, has announced opening of a new business service centre called Diageo Business Services India (DBSI) in Bengaluru, which aims to increase its workforce to 1,000 from 100 currently.
- Amway, India’s largest company in the Rs 7,500 crore (US$ 1.12 billion) direct-selling market, plans to invest Rs 400 crore (US$ 60 million) over the next five years to expand its product portfolio and open 50 ‘express’ stores in top 20 cities of India, in addition to strengthening its e-commerce website.
- Furlenco, an online furniture rental company, has raised US$ 30 million in series B round of funding led by LightBox Ventures, Axis Capital and a number of high net-worth individuals, which will be used to expand its geographical presence and product offerings in the next 12 months.
- Dyson, the UK-based manufacturer of innovative vacuum cleaners and air purifiers, plans to enter Indian consumer market by 2017 and invest GBP 154 million (US$ 190 million) over the next five years in areas of retail infrastructure, marketing, promotion and taxes to the government.
- Zefo, a Bengaluru-based refurbished goods marketplace, has raised Rs 40 crore (US$ 6 million) in a funding round led by Sequoia India, with participation from Beenext and Helion Venture Partners, which will be used to expand its team, invest in technology, and expand its presence in Mumbai and Delhi, which were recent additions.
- Adidas India Private Limited, outlined plans of opening around 30-40 big flagship stores across Delhi, Mumbai and Bengaluru, by 2020.
- Swiss watchmaker Montres Corum Sàrl, better known as Corum, has partnered with the luxury watch retailer Ethos Watch Boutiques to sell Corum watches in India, in order to strengthen its presence in India by rebuilding its distribution network and boosting revenues.
- AO Smith, a US based water technology and air purification solutions company, sees India as one of key markets and plans to grow at double-digit growth rate, having invested US$ 75 million so far.
- Crocs India Pvt Ltd, outlined plans of increasing its store count in India from 38 to 100 by the end of 2017, and increasing its focus on the casual footwear category to expand its consumer base and thereby boost its overall revenue.
- Panasonic Corporation plans to set up a new manufacturing plant for refrigerators in India with an investment of Rs 250 crore (US$ 37.5 million), and also invest around Rs 20 crore (US$ 3 million) on an assembly unit for lithium ion batteries at its existing facility in Jhajjar.
- Bosch & Siemens, the largest manufacturer of home appliances in Europe, plans to manufacture more products in India in the next three years, led by rise in demand for premium home and kitchen appliances.
Government Initiatives
The Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in online retail of goods and services through the automatic route, thereby providing clarity on the existing businesses of e-commerce companies operating in India.
With the demand for skilled labour growing among Indian industries, the government plans to train 500 million people by 2022 and is also encouraging private players and entrepreneurs to invest in the venture. Many governments, corporate and educational organisations are working towards providing training and education to create a skilled workforce.
The Government of India has drafted a new Consumer Protection Bill with special emphasis on setting up an extensive mechanism to ensure simple, speedy, accessible, affordable and timely delivery of justice to consumers.
In the Union Budget 2017, the government has proposed to spend more on the rural side with an aim to double the farmer’s income in five years; as well as the cut in income tax rate targeting mainly the small tax payers, focus on affordable housing and infrastructure development will provide multiple growth drivers for the consumer market industry.
Union Cabinet reforms like implementation of the Goods and Services Tax (GST) and Seventh Pay Commission are expected to give a boost to consumer durable sector in India.
Consumer spending in India poised for explosive growth: report
By 2020, consumption will reach US$3.6 trillion, as new generation hits its prime spending years, according to a recent CII-BCG report
The Boston Consulting Group (BCG) and The Confederation of Indian Industry (CII) jointly released a study titled An In–Depth Analysis of How a Billion Plus People Consume. “This report examines the shape and size of consumption expenditure in India in detail, and its expected evolution over the next decade. While India’s robust consumption growth presents attractive opportunities for companies, its unique diversity and variety makes it challenging to capture these opportunities. Towards that end, this report presents a framework and approach on how to de–average the opportunity to better segment consumers and effectively understand their buying preferences," says Abheek Singhi, Leader of the Consumer & Retail Practices, BCG India and co-author of the report.
Buoyed rising household income, the coming of age of a new generation, and other socioeconomic forces, overall consumer spending in India is likely to expand 3.6 times from US$991bn in 2010 to US$3.6 trillion by 2020. The projected 14% growth rate is much faster than the anticipated annual global growth of 5.5% and even faster than the anticipated growth in emerging economies of 9%. By 2020, India will constitute 5.8% of global consumption more than double the 2.7% it now represents.
Despite the current global economic environment, India continues to march along a robust growth path. With the recent regulatory changes, increasing consumption levels and changing consumer preferences, the FMCG and retail sectors are standing at the point of inflexion," says Amitabh Mall, Partner & Director, BCG India.
India has a billion plus consumers spanning all income segments. The income pyramid is real but does only a partial job of explaining consumer attitude and behaviour. This report provides a definitive view of the income segmentation and more importantly uses other parameters of location, education and occupation to define the seven segments in India.
- Professional Affluent (2% of households)
- Traditional Affluent (4% of households)
- Urban Aspirers (8% of households)
- Rural Aspirers (6% of households)
- Large Town Next Billion (6% of households)
- Small Town and Rural Next Billion (24% of households)
- Strugglers (50% of households)
Food, housing & consumer durables and transport & communication are expected to be the Top 3 categories, accounting for 65% of consumption in 2020. The Professional Affluent are expected to dominate consumption in 2020, accounting for 26% of total consumption expenditure, up from 16% in 2010. By contrast, spending by struggler households will decline from 26% in 2010 to 11% in 2020.
"The roar of the Tiger is a fitting metaphor for consumer spending in India. Consumer spending in India will continue to roar, but the companies that try to capture it may not be so fortunate. India is a big and growing consumer market, but not an easy one. Understanding the size and shape of the prize and where it is hidden in the challenging fabric of India are the first steps to capturing it," concludes Abheek Singhi.
http://www.indiainfoline.com/articl...r-explosive-growth-report-113103007422_1.html
Consumer spending in India is expected to triple by 2020.
Indian consumer spending is projected to rise to $3.6 trillion in 2020, from $991 billion in 2010.
Source: Boston Consulting Group
http://www.businessinsider.in/16-Fa...ted-to-triple-by-2020-/slideshow/37120467.cms
Household final consumption expenditure, etc. (% of GDP)
For india it is 59 % approx
http://data.worldbank.org/indicator/NE.CON.PETC.ZS