USA to South Asia: The Potential IMTC Miami 2010
South Asians: What about them? <ul><li>Over 25 million South Asians live and work in North America, Europe, Australia / New Zealand, South East Asia, Africa and Middle East </li></ul><ul><li>Major corridors: USA - South Asia: 5 mill, Canada - South Asia: 2.5 mill, Europe - South Asia: 5 mill, Middle East - South Asia: 9 million </li></ul><ul><li>This is the world’s fastest growing remittance sector $16 BILL (2001)..TO ..$72 BILL est (2010) </li></ul>
Countries of South Asia INDIA BANGLADESH PAKISTAN NEPAL BHUTAN SRI LANKA MALDIVES AFGHANISTAN Under SAARC
BIG PICTURE: SOUTH ASIA GLOBAL: $72 BILLION FROM USA: $22 BILLIO N EST INFLOW 2010
RECEIVE INFLOW: CONTINENT OF ORIGIN INDIA PAKISTAN BANGLADESH NEPAL
India – the growth pattern 2001 to 2010: $11 bill to $49 bill – 15% year to year Forecast: 2010 to 2015: $49 bill to $79 bill – 10% year to year 2005 2010 Bank Segment Direct 14 bill 25 bill Cash Pick up 6 bill 12 bill Service providers 2 bill 8 bill Others 1 bill 4 bill
PAYEE INFRASTRUCTURE <ul><li>India : Cash pick up thru MTSS (banks and non banks); limited players; total over 100,000 pick up locations </li></ul><ul><li>India : Banks offer account credit; own and 3 rd party bank, provide cash pick up service, over 70,000 bank branches </li></ul><ul><li>Bangladesh : Only banks, account credits / cash pick up over 12,000 locations </li></ul><ul><li>Pakistan : Only banks, account credits / cash pick up, FOREX cos fading out; over 10,000 locations </li></ul><ul><li>Sri Lanka: Only banks, over 6000 locations </li></ul><ul><li>Nepal: Banks and Forex cos; over 6000 locations </li></ul>CENTRAL BANK REGULATED, WELL DEVELOPED
India – the ‘big’ market, strengths and weaknesses of different segments Banks Money Transfer Cos. Service Providers Distribution Strong receiving. Physical. Both payee Rides on partners’ No send. Internet. and ‘send’. Limited web distribution Brand identity Strong. Strong for ‘old’ like WU Rides on partners’ Ethnic cos. = ethnic identity brand. No own identity Legal / Regulatory Favorable for Unfavorable. Tough for Not required. Partners Central Banks new and small entrants have the approvals Technology Access to good Old players – use tech. Concept based tech. Not flexible on tech platform Industry position Money transfer Premium. Defines Undefined. Service allied service industry. Provider Revenue (RPT) Marginal. Add on High. Competition Marginal. Survive on to other services pulls down RPT high vols thru partners
Internet Business (INDIA) <ul><li>2 categories: 1. Indirect - Web co. accepts trans for transfer to bank accounts 2. Direct - Bank’s web site accepts transfers for credit to its own accounts or elsewhere </li></ul><ul><li>Fast growing segment - 2008 - $ 2 billion Estimated - 2009 - $ 3 Billion 2010 est - $ 4.5 Billion </li></ul><ul><li>Major Indirect Players - remit2india </li></ul><ul><li>Major Direct Players - ICICI Bank, Citibank, SBI </li></ul>
USA South Asia Market - 2010 India - $15 Billion Pakistan – 2 Bill, Bangla. – 2 Bill Nepal – .8 Bill, Sri Lanka – 1.5 Bill Bank Deposit $9 Bill Cash – 5 bill Other – 1bill Bank Deposit $2.5 bill Cash $4 bill Go Govt. banks ICICI Citibank Private Banks Private Processors WU MG XM Regional Misc Govt. banks Private Banks WU MG Forex Cos. Misc.
CURRENT STATUS: USA <ul><li>Traditional agent based: rely mainly on ethnic agents </li></ul><ul><li>Big Brands: can also ride on non ethnic agents, chain stores (like Duane Reade, Walmart etc.) </li></ul><ul><li>Internet based: focused on India, BIG GROWTH Service Providers and also Banks </li></ul><ul><li>Banking Channels: Ethnic banks (SBI), Non ethnic banks with presence in S. Asia (Citi, HSBC) </li></ul><ul><li>South Asian ‘run’ Money Transmitters: strong ethnic orientation and identity: FASTEST GROWING SEGMENT </li></ul><ul><li>MOBILE MONEY TRANSFER: YET TO CATCH UP </li></ul>
Competitive Environment <ul><li>USA: South Asia corridor grossly unutilized </li></ul><ul><li>Disorganized and scattered competition </li></ul><ul><li>No BIG ETHNIC branding </li></ul><ul><li>Big players ride on global branding </li></ul><ul><li>Small ethnic players serve niche markets due to limited resources </li></ul><ul><li>Only big players try to make inroads </li></ul><ul><li>REQUIRES MEDIUM SIZE PLAYERS </li></ul>
Why Customization <ul><li>Will force a custom made solution for South Asia </li></ul><ul><li>South Asian market - sophisticated, brand conscious, high principal, less frequency but high average revenue per transaction </li></ul><ul><li>Strategic mix of send distribution points: focus branches / offices, agent locations, Internet / fax / phone / mail based sales </li></ul><ul><li>Successful branding effort through full use of ethnic media and public relation efforts </li></ul>
How to get into the game? <ul><li>What's the strategy: Full Service Brand or Add on service </li></ul><ul><li>Full Service Brand : Best long term payout Create ethnic brand / sub brand Send Distribution thru ethnic locations Select best payers / payees in region Focus on language / culture sensitivities Web based service adds to agent based </li></ul><ul><li>Add on: Quickest but low revenue yield Select a good South Asian partner service Target ethnic communities in your stronghold Hire ethnic agents, or train your agents Limited and location sales / marketing </li></ul>
Why to get into it <ul><li>First mover advantage; before it becomes cluttered </li></ul><ul><li>Current focus only on North East, rest still lacks maturity: HUGE OPPORTUNITY </li></ul><ul><li>S. Asian market still registers growth compared to the saturated South American and Mexican market </li></ul><ul><li>Existing companies can easily leverage upon their current infrastructure: LESS CAPITAL INVESTMENT </li></ul><ul><li>South Asian population in USA rising fast: PROJECTED TO HIT 8 MILL IN NEXT 5 YEARS </li></ul><ul><li>High yield per transaction, quick build up of good revenue </li></ul>
CONCLUSION OVER 1.5 BILLION PEOPLE RECEIVE MKT OVER 25 MILLION MIGRANT (US 5 MILL) $72 BILL INFLOW GLOBAL (US - $22 BILL) IGNORE THIS AT YOUR OWN PERIL!! THANK YOU!