Chocolate in India

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  • @SimonaChindea

    Thank you very much for your quick reply. This will help us very much with the progress of our project.

    Yours sincerely,

    Lieke de Greef
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  • the most important was this one: Promar International: The market for confectionery products in India. A report prepared for The National Confectioners Association, online in the WWW under URL: http://69.17.111.188/site/c4/ w116/downloads/India.pdf; called up on the 1st of January 2012. Good luck with your project!
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  • Basic sources
    CIA The World Factbook, online in the WWW under URL: https://www.cia.gov/library/
    publications/the-world-factbook/geos/in.html; called up on the 1st of January 2012.
    U.S. Department of State, online in the WWW under URL: http://www.state.gov/r/pa/ei/
    bgn/3454.html; called up on the 1st of January 2012.
    The World Bank, online in the WWW under URL: http://data.worldbank.org/country/india;
    called up on the 1st of January 2012.
    15
    International Monetary Fund, online in the WWW under URL:
    http://www.imf.org/external/ country/IND/index.htm; called up on the 1st of January 2012.
    Wikipedia, online in the WWW under URL: http://en.wikipedia.org/wiki/India; called up on
    the 1st of January 2012.
    Articles
    Promar International: The market for confectionery products in India. A report prepared for
    The National Confectioners Association, online in the WWW under URL:
    http://69.17.111.188/site/c4/ w116/downloads/India.pdf; called up on the 1st of January 2012.
    Top Facts You Cannot Ignore About Indian Economy, online in the WWW under URL:
    http://businesswatch.in/top-facts-you-cannot-ignore-about-indian-economy/; called up on the
    1st of January 2012.
    Impact of Foreign Direct Investment (FDI) on Indian Economy, online in the WWW under
    URL: http://www.jeywin.com/main/impact-of-foreign-direct-investment-fdi-on-indianeconomy/;
    called up on the 1st of January 2012.
    Problems Facing Indian Economy, online in the WWW under URL: http://www.economics
    help.org/indian/problems-indian-economy.html; called up on the 1st of January 2012.
    India`s economy in 2010. Economy watch, online in the WWW under URL: http:/www.
    economywatch.com/indianeconomy/indian-economy-overview, called up on the 1st of January
    2012.
    New math: 37% Indians live below poverty line, online in the WWW under URL:
    http://articles.economictimes.indiatimes.com/2009-12-11/news/28407054_1_poverty-ratiourban-
    population-urban-areas; called up on the 1st of January 2012.
    Economy Of India, online in the WWW under URL: http://www.tradechakra.com/indianeconomy/
    index.html; called up on the 1st of January 2012.
    16
    Premium chocolate market rising in India, online in the WWW under URL: http://www.newz
    globe. com/article/20100910/premium-chocolate-market-rising-india; called up on the 1st of
    January 2012.
    Chocolate: New taste of success for city-based start-ups, online in the WWW under URL:
    http://www.ibef.org/artdisplay.aspx?cat_id=60&art_id=28173; called up on the 1st of January
    2012.
    Chocolate Market in India Facts & Figures, online in the WWW under URL: http://fmcg
    marketers.blogspot.com/2007/12/chocolate-market-in-india.html; called up on the 1st of
    January 2012.
    Chocolate Market, online in the WWW under URL: http://business.mapsofindia.com/
    fmcg/chocolate.html; called up on the 1st of January 2012.
    Cadbury versus Nestle: The Chocolate Onslaught, online in the WWW under URL: http://
    www.corporatebattles.com/2011/06/cadbury-versus-nestle-the-chocolate-onslaught/; called up
    on the 1st of January 2012.
    KIT: Chocolate market in India, online in the WWW under URL: http://business-standard.
    net.in/india/news/kit-chocolate-market-in-india/450378/; called up on the 1st of January 2012.
    Chocolate market in India, online in the WWW under URL: http://www.fnbnews.com/article/
    detarchive.asp?articleid=30106&sectionid=4; called up on the 1st of January 2012.
       Reply 
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  • Dear Simona Katholnig,

    We just viewed your presentation about the chocolate market in India. This information is very interesting for our project. We would like to know the sources of this presentation.

    We are looking forward to hearing from you.

    Yours sincerely,

    Lieke de Greef
    Student Marketing Management
       Reply 
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Chocolate in India

  1. 1. COUNTRY MARKET REPORT CHOCOLATE IN INDIA
  2. 2. PURPOSE OF THE REPORT Provide relevant country and market information to foreign chocolate manufacturers who want to enter the Indian chocolate market.
  3. 3. AGENDA <ul><li>General Country Background </li></ul><ul><li>The Political/Legal Environment </li></ul><ul><li>The Economic Environment </li></ul><ul><li>The Socio-Cultural Environment </li></ul><ul><li>The Indian Chocolate Market </li></ul><ul><li>Conclusions and Recommendations </li></ul>
  4. 4. General Country Background Chocolate in India
  5. 5. General Country Background Name Republic of India (Bhārat Gaṇarāj ya ) Government Federal Republic Area 3,287,263 km2 (7th) Capital New Delhi Largest city Mumbai Population 1,170,938,000 (2nd) Official languages English, Hindi Administrative divisions 28 states and 7 union territories Currency Indian Rupee (INR)
  6. 6. India is one of the fastest growing economies in the world. General Country Background <ul><li>Fast development of the country </li></ul><ul><li>Increasing income levels </li></ul><ul><li>Westernization of the national culture </li></ul><ul><li> Wide variety of opportunities for foreign companies </li></ul>
  7. 7. India also faces many challenges: General Country Background <ul><li>Poverty </li></ul><ul><li>Poor infrastructure </li></ul><ul><li>High levels of illiteracy </li></ul><ul><li>Quality and quantity of universities </li></ul><ul><li>Inadequate public health system </li></ul><ul><li>Overpopulation </li></ul>
  8. 8. The Political/Legal Environment Chocolate in India
  9. 9. The Political/Legal Environment <ul><li>British colony for almost 200 years, independence on August 15th 1947 </li></ul><ul><li>Federal parliamentary republic </li></ul><ul><li>Problems: fragmented multi-party coalition, high bureaucracy, policy implementation weaknesses, conflict over Kashmir, poverty, religious conflicts </li></ul><ul><li> Relatively high country risk, BERI=58 </li></ul>
  10. 10. <ul><li>Taxation system: income taxes, custom duties, Central Excise, sales taxes, etc. </li></ul><ul><li>Tariffs on food imports still high, despite liberalization of trade in 2001 </li></ul><ul><li>Legal requirements for food safety, packing and labeling: PFA (Prevention of Food Alteration Act), Standards of Weights and Measures Act </li></ul>The Political/Legal Environment
  11. 11. The Economic Environment Chocolate in India
  12. 12. The Economic Environment <ul><li>Fastest growing economy in the world </li></ul><ul><li>Until 1990ies stagnation and under-development </li></ul><ul><li>Economic reforms, LPG model </li></ul><ul><li>Deregulation of markets, lift of restrictions on FDI </li></ul>GDP (Purchase Power Parity) $ 4,06 trillion (5th in the world) GDP growth rate 10,4% p.a. GDP per capita $ 3,500 Inflation rate 12% Labor force 478 million Unemployment rate 10% Exports $ 225,6 billion Imports $ 357,7 billion Exchange rate INR per USD 46,163
  13. 13. The Economic Environment <ul><li>Sources of economic growth: </li></ul><ul><li>Services: 54% (of GDP) </li></ul><ul><li>Agriculture: 28% </li></ul><ul><li>Industry: 18% </li></ul><ul><li>Major exporter of IT services: Bangalore and Hyderabad – the “Indian Silicon Valley” </li></ul><ul><li>Increase in FDI since 1990ies, many international players </li></ul><ul><li>Main trading partners: UAE, China, USA, Saudi Arabia </li></ul>
  14. 14. The Economic Environment <ul><li>India still faces many problems despite the rapid </li></ul><ul><li>economic development: </li></ul><ul><li>High inflation rate of up to 10% </li></ul><ul><li>Inequalities between the rich and poor </li></ul><ul><li>Poor physical and social infrastructure </li></ul><ul><li>Poverty (37% below poverty line) </li></ul><ul><li>Strict labour laws which prevent FDI </li></ul>
  15. 15. The Socio-Cultural Environment Chocolate in India
  16. 16. The Socio-Cultural Environment <ul><li>High ethnic and cultural diversity ( >1000 different languages spoken) </li></ul><ul><li>Fastest growing middle class in the world </li></ul><ul><li>High level of urban migration </li></ul><ul><li>Religion plays an important role in people’s lives (Hinduism) </li></ul><ul><li>Many festivals (Diwali, Rakhi, Onam) </li></ul>Total population 1,2 billion (2011) Growth rate 1,35% p.a. Life expectancy 67 years Urban population 30% Population below poverty line 37% Literacy rate, male resp. female 73%, resp. 48% Official languages Hindi, English Regionally recognised languages 18 % under 65 years 95%
  17. 17. The Socio-Cultural Environment <ul><li>Considerable differences between regions </li></ul><ul><li>Southern and Western India are more developed with strong agricultural and industrial sectors </li></ul><ul><li>Northern India is most populous, mainly agriculture </li></ul><ul><li>Eastern India is largely poor </li></ul>Bangalore Hyderabad
  18. 18. The Socio-Cultural Environment <ul><li>India is a young country, less than 5% over 65 years, 50% under 25 years </li></ul><ul><li>Younger generations are more westernized and brand-conscious </li></ul><ul><li>Hofstede’s cultural dimensions: high PD, moderate UA, MSC, IND </li></ul><ul><li>Cast systems still relevant </li></ul>
  19. 19. The Indian Chocolate Market Chocolate in India
  20. 20. General Overview <ul><li>Major changes since the 1990ies </li></ul><ul><li>Market still very small ($300 mil.) but steady growth of 18-20% p.a. </li></ul><ul><li>Huge growth potential for premium segment </li></ul><ul><li>70% of sales in urban areas </li></ul><ul><li>Very price-sensitive market </li></ul>Most popular chocolate tablet in India
  21. 21. Consumer Behaviour <ul><li>Chocolate consumption still very low: 300g p.a. (1,9kg in Britain) </li></ul><ul><li>Westernization of Indian lifestyle </li></ul><ul><li>Rising income levels, travel abroad, metropolitan population </li></ul><ul><li>Gifting sweets during festivals </li></ul><ul><li>Substitution of traditional mithai with chocolate </li></ul>
  22. 22. Competition <ul><li>Two dominant players with a long tradition: Cadbury and Nestle (90% of market) </li></ul><ul><li>Local manufacturers: Amul, Campco, etc. </li></ul><ul><li>International players: Lindt, Godiva, Hershey’s, etc. (premium segment) </li></ul><ul><li>Housewives </li></ul>
  23. 23. Market snapshot for 2011 Jan. 2011 - Kraft Foods acquires Cadbury India Jul. 2011 - Hershey’s exits JV with Godrej Group Oct. 2011 - Ferrero opens first production facility in India Nov. 2011 - Campco increases production to 23,000 ton./year Dec. 2011 - Kraft Foods increases investments in Cadbury India
  24. 24. Distribution Channels <ul><li>Distribution system: low efficiency, high costs </li></ul><ul><li>Many intermediaries </li></ul><ul><li>Retail sector highly unsystematic </li></ul><ul><li>Small independent stores: Kiranas, Paan-Beedis </li></ul><ul><li>Supermarkets, malls, exclusive chocolate stores </li></ul>Kirana and Paad-Beedi shops
  25. 25. Conclusions and Recommendations Chocolate in India
  26. 26. Conclusions <ul><li>India – high cultural, economic, ethnic, linguistic, religious diversity </li></ul><ul><li>Differences between regions and income levels </li></ul><ul><li>Huge growth potential of the chocolate market, many international players are entering </li></ul><ul><li>Westernization of culture and lifestyles </li></ul><ul><li>Market is highly concentrated, very price-sensitive </li></ul><ul><li> Market entry needs careful planning </li></ul>
  27. 27. Recommendations <ul><li>Large capital investments for branding and marketing to compete with major players </li></ul><ul><li>Appropriate pricing strategy is crucial </li></ul><ul><li>Selection of appropriate local trading partners, importers, distributors </li></ul><ul><li>Focus on more developed regions and metropolitan areas first </li></ul>
  28. 28. Thank you for your attention! Sources available on request.

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