NPC2012 Sizing the Indian Market

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NPC2012 Sizing the Indian Market

  1. 1. Sizing the Indian Market Presented by: Pari Natarajan Co-Founder & CEO, Zinnov
  2. 2. Business pyramid in India Large Enterprises (10,000+ EEs) ~500 Mid-Market (1000-10,000 EEs) ~5,000 Medium Business (100-999 EEs) ~120,000 Small Business (1-99 EEs) ~45MSource: Zinnov Analysis
  3. 3. Sizing ‘Down’ the SMB market Total Number of SMBs in India (2012) 45M Excluded after filter 22 % • Rural businesses • Mom and pop stores in retail vertical • Businesses without fixed premises /hired Addressable employees (excludes professional services) opportunity of SMBs in India 10MSource: Zinnov Analysis
  4. 4. Numbers broken down # 4% Vertical 6% Firms 21% Retail 1.96 8% Less than Manufacturing 1.17 10 Professional 1.87 employees 8% Services 9.5 M 10% 10M 20% Food & Entertainment Travel & Hotels 0.96 0.81 Logistics 0.59 (94%) 10% Education 0.89 13% Real Estate 0.83 Automotive 0.36 11 to 100 Employees 0.5 M (4%) 101-1000 Employees 0.2M (2%)Source: Zinnov Analysis, NSSO, ICRIER, MSME
  5. 5. SMBs are a Fragmented lot Manufacturing Example Cluster Interventions Required Total Manufacturing 26 Clusters = 2040 Innovators 2.5% I.Role Model Identification 30 Early Adopters Driven 83 13.5% • Identify Role Models 40 17 12 69 288 II. Awareness Driven 139 32 4 Early Majority • Create positive role 36 17 115 155 98 1 34% models in the form of 42 61 early adopters 116 Legend for clusters III. Business or 150 Compliance Driven 200+ SMBs Late Majority 181 • These would probably 100-200 SMBs 34% adopt technology only if 159 50-100 SMBs there is a desperate 166 Laggards business or compliance 0-50 SMBs 16% need to do soSource: Zinnov Analysis, MSME, UNIDO
  6. 6. SaaS ERP for Leather Manufacturing Estimated Estimated # Estimated Annual CLUSTER State District firms Employment Turnover Maturity Tamil Nadu Chennai 500 50,000 INR 1000 Crores Early Majority Delhi South Delhi 500 50,000 INR 1000 Crores Early Majority Maharashtra Satara 250 1,000 INR 500 Crores Early Adopters Uttar Pradesh Agra 250 10,000 INR 500 Crores Early Majority Punjab Jalandhar 250 10,000 INR 500 Crores Early Majority Karnataka Bangalore 250 1,000 INR 50 Crores Early Majority Andhra Pradesh Hyderabad 75 1,000 INR 50 Crores Early Majority Tamil Nadu Vellore 75 1,000 INR 50 Crores Early Majority Punjab Jalandhar 250 1,000 INR 10 Crores Early Majority Gujarat Ahmedabad 100 1,000 INR 50 Crores Late Majority Uttar Pradesh Allahabad 100 10,000 INR 50 Crores Laggards Uttar Pradesh Kanpur 100 10,000 INR 50 Crores Laggards West Bengal Kolkata 500 1,000 INR 10 Crores Laggards Karnataka Raichur 100 1,000 INR 10 Crores Laggards Uttar Pradesh Kanpur 100 1,000 INR 10 Crores LaggardsSource: Zinnov Analysis
  7. 7. SaaS ERP for Leather Manufacturing Salespersons required to reach the Addressable Market 3 Cost of Sales INR 30 Lakhs Overall Cost INR 1 Crore Breakeven Analysis INR 3.6 Lakhs per Customer per year 10 Wins = INR 3,000 per User 100 Quotes per month (for 15 ERP Users) SMB Interactions = 700 per salesperson Organization with headcount >200Initial Addressable SMBs ~2,100 Actual Addressable SMBs ~200Source: Zinnov Analysis
  8. 8. Future Outlook # 4% Vertical 5% Firms 22% Retail 2.48 7% Professional Services 2.28 8% Manufacturing 1.57 Year 2015 10% 11M 20% Food & Entertainment Education 1.13 1.09 Real Estate 0.88 10% Travel & Hotels 0.86 14% Logistics 0.63 Automotive 0.44Source: Zinnov Analysis
  9. 9. Thank you

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