India Insights featured on RetailInAsia.com

India Insights talks to Asia's first social networking site for the retail community.

We give our thoughts on the Indian retail landscape, what it takes for new entrants to succeed and how we expect the sector to develop.

To read the full interview click here.

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July 26, 2010 Add a comment

World-class Delhi Metro changing the face of the capital's public transport system

The Delhi Metro is connecting the NCR, providing an alternative to congested roads.

Trial runs have just begun on the Central Secretariat - Lajput Nagar section of the Badarpur corridor on the Violet line. The line joins a network - totaling over 120 stations both elevated and underground - that has been extended since construction began in 2002.

Linking up the National Capital Region

Once complete the Delhi Metro will connect Delhi with Noida and Gurgaon, growing hubs for India's outsourcing, BPO and software industries, providing Delhiites and overseas workers with a comfortable, low cost - single fares start at R's 8 (around £0.12) - alternative to Delhi's roads.

Relieving a creaking infrastructure

The city has a population of 14 million. Ageing buses and auto rickshaw's provide the primary means to get around. A new fleet of modern buses has arrived but they are not without problems.

The cities roads are congested, car ownership is increasing and carbon emissions are choking Delhi, a report by ECA International revealed that Delhi has the world's worst air pollution.

Benchmark for public transport

With out the Metro, Delhi's transport infrastructure wouldn't keep pace with economic growth. There would be gridlock and the city would become increasingly inefficient.

The impressive Metro is on a par with Singapore's MRT system, it has created the benchmark for Indian public transport infrastructure. Delhi is set to benefit commercially and socially from this impressive feat of engineering and design, other cities must now follow.

More images can be found in the Image Library.

July 24, 2010 Add a comment

Social networking becomes a mainstream tool for India Inc

A new study by Regus reveals that social networking sites are now an accepted communications channel for Indian business.

Previous studies on the subject have provided mixed results. Iffort proved that Twitter has gained a significant foothold within the Indian business community, however, research by ASSOCHAM showed a general lack of understanding about the subject.

India Inc leads the way

Over 15,000 respondents from the Regus global contacts database were interviewed for the purpuses of their study. Regus found that India tops their social networking activity index, 52% of Indian businesses have successfully won business using social networks, followed by Mexico (50%), Spain (50%) and Netherlands (48%).

Indian social network user numbers

Given the fact that India has 600 million wireless subscribers - and 9 million broadband users - it isnt surprising to find that India is maximising the use of online communications, especially when you consider the country's growing economy.

Gupshup (Hindi for Chatter) has over 25 million members, Orkut 18 million, Facebook 16 million and Bharatstudent.com 3.3 million.

Social networking usage in India

In India, 32% of businesses have a marketing budget assigned for social networking activities, compared to 27% globally.

71%, compared to 51% globally declared that they primarily use social networks to manage and connect to customer groups. And 67% of companies use social networking to source information compared to the 54% global average.

Madhusudan Thakur of Regus comments:

"The survey has revealed that social networking has finally become a mainstream business tool. While the most popular function of these networks remains that of keeping in touch with contacts, businesses are also acquiring new customers, supporting their retention efforts and interacting with customer groups".

Making the most of sizable business opportunities

The findings of the survey prove that Indian business is adopting and successfully utilising all available online communications tools. The findings also indicate that organisations who have failed to tap into the world of social networking are missing out on significant business opportunities.

July 16, 2010 Add a comment

India's "Muppies" provide opportunities for brands

A special report in India's Sunday Times charts the rise of the India's "Muslim upwardly-mobile professionals". Their elevation creates new opportunities for brands.

Globally it is estimated that 20% of the world's population is Muslim and as a consumer group they are worth US$ 2 trillion. In India the percentage is slightly less but in 2009 there were 160.9 million Muslims in the country.

Better education leading to better jobs

The Sunday Times celebrates India's more tolerant society and provides examples of how Indian Muslims are beginning to improve their lifestyle through better education. As a result higher numbers are getting better jobs, as a group they are becoming an increasingly influential consumer group.

Highly skilled and aspirational workforce

The report highlights the fact that due to economic reasons the natural pull to the Gulf states is no longer as strong, consequently there is a more affluent, highly skilled Muslim workforce available in India.

This new wave of professional Muslims are aspirational and globally connected, and their ranks are set to swell as more Muslim-managed institutes of learning are opened.

Opportunities for brands

The Muslim population is now a major global force, with big communications networks setting up Muslim specific brand consultancies like Ogilvy Noor.

Increasingly affluent Indian Muslims provide opportunities for domestic and global brands. Obvious examples are Islamic finance, food and grocery (Halal) and fashion - providing brands are willing to develop more conservative lines.

The challenge is developing a deep understanding of this consumer group and striking a balance between Holly and Worldly. But with such a sizable population the demand exists and it is set to grow.

To read the whole report click here.

July 11, 2010 Add a comment

Multi-brand retail under real consideration

Government discussion paper paves the way for opening up the retail sector to foreign grocery majors in three years.

As it stands multinationals can invest up to 51% in single brand retail but foreign investment in multi-brand retail is not allowed. International grocery brands have been restricted to setting up cash-and-carry operations rather than supermarket chains.

Retail deregulation

A report published by the Department of Industrial Policy and Promotion (DIPP), and backed by influential FICCI, provides evidence that government appears willing to push for deregulation.

Depending on the results of stakeholder consultation - objections can be made up to July 31st - the sector could be opened, allowing somewhere between 49% and 51% foreign investment.

Protecting Mom and Pop

Opening the sector is politically sensitive. 33 million people - the countries biggest employer after farming - work in traditional Kirana stores. Job losses are feared.

RP Singh of the DIPP is clearly aware of the balancing act that is required:

"We want to approach FDI in retail with some amount of caution, participating should happen in a calibrated manner, for which domestic industry needs a cooling off period of three years."

To ease fears, the report suggests that 50% of new jobs could be reserved for youngsters from rural India. It also highlights the fact that organised and unorganised single-brand retail coexists successfully in China.

Making the case for big retail

Government has carefully crafted the paper. They make the point that farmers and the consumer will benefit as back-end infrastructure improves due to fresh capital investment.

The report states that farmers currently receive just one-third of the actual store price for produce, compared to two-thirds in more developed markets. In addition, DIPP estimate that R's 1 trillion of fresh produce is spoiled each year due to poor cold storage.

A significant moment for market reform

The tone of the report will provide hope to international retailers. Government has grasped the nettle by addressing popular concerns and fears with persuasive arguments. The report potentially signals a significant moment in retail reform.

July 7, 2010 Add a comment

Despite tightening profit margins, India auto has a rewarding journey ahead

While record monthly sales show India auto benefiting from an improving economy, increased competition is creating new pressures for automakers.

The Indian car market goes from strength to strength. Consumer demand grows despite rising prices. Society of Indian Automobile Manufacturers (SIAM) figures show that total domestic passenger car sales for April were 143,976, up on 103,227 year previous.

Maruti Suzuki leads the way

For the first time Maruti Suzuki sold over 100,000 vehicles (including vehicles for export) in May.

US majors also made ground but lag behind in unit sales. General Motors exceeded expectation with growth of over 60%, 8,225 units in real terms, and Ford posted May sales growth of 272%, or 8,080 vehicles.

Increased sector sales but falling profit

Increased competition is forcing automakers to launch newer versions of their vehicles or offer - at discount - more premium features to maintain sales growth. The number of cars launched over the last few years has intensified competition, reducing the average sales per model.

Manoj Mohja of Crisil Research says, "While total sales for cars has increased 14% annually in the past four years, the average unit sales per model has declined over 12% in the Indian market".

More auto investment to come

Despite pressures on profit margins, the sector is still expected to flourish. Estimates are that US$ 30 billion will be invested in India - the world's second fastest growing market - over the next four years. Good news considering government aims to increase the industry contribution to 10% of GDP, employing 25 million people by 2016 in the process.

International luxury marques seeing growth

The luxury end is also experiencing growth as international brands look to tap in to an unsaturated market. Mercedes Benz experienced 59% growth year-on-year, with sales of 381 units during May. Audi managed 65% growth during the same period with sales of 200 cars.

While unit sales are still small, luxury growth of 15% is expected this year and sales are expected to grow. Abdul Majeed, of PwC comments, "Although there are challenging factors like input costs pressures and hike in interest rates, the growth rates can be sustained."

June 8, 2010 Add a comment