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NexusNovus_India_Retail_Market_Introduction

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NexusNovus provides services in Consultancy, Trade Missions and Business Representation to European firms that are eager to enter or develop the Indian market. In addition to that, we also trade in …

NexusNovus provides services in Consultancy, Trade Missions and Business Representation to European firms that are eager to enter or develop the Indian market. In addition to that, we also trade in FMCG, Healthcare, and Fire and Safety products.
Located strategically in Bangalore, NexusNovus specializes in working with small to medium sized businesses. Five years of hands-on experience in India has empowered us to build an enviable track record. Our Indo-European identity, nation-wide network and strong employee-base makes us the ideal partner for doing business in India.

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  • RB: Hating this slide too…too much text cramped into too less spaceChangedTable layoutModern Organized Retail charges listing fees before placing any new product > MTO charges listing fees before placementListing fees are never fixed, prices go up for new suppliers > Listing fees are not fixed and increase for new suppliers  Listing fees vary and are highest for new entrantsListings are only accepted by retail if they see potential in the product > Listings are realized only with accepted product potential,  Listings depending on perceived potential product by MTOListing procedures take 2-4 weeks  months?
  • Transcript

    • 1. Entry into the IndianRetail MarketHow to get yourproducts on the shelves
    • 2. “For in Asia and around theworld, India is not simplyemerging; India has alreadyemerged.” - President Barack Obama
    • 3. About India8% GDP growth ratePopulation: 1.2 billion22 official languages
    • 4. Drivers of Growth 2nd worldwide FDI destination Rising disposable incomes Availability of qualified staff Strong & stable financial market Favorable demographic trends
    • 5. World’s… Cheapest car, TATA Nano Largest milk producer Largest tea producer Lowest retail space per capita at 0.19 m2 Biggest gold market Fastest movie producer
    • 6. Five P’s of India Price Patience Placement Success Partner Promotion
    • 7. The new Indianupper-middleclassYoung Indian couple /Modern Trade OutletBangalore
    • 8. India’s Upper-Middleclass 80 million upper / upper middle class 600 people, 2010 500 McKinsey, growing to 400 550 million by 2025 Disposable income 300 high 200 Identify themselves 100 with international 0 consumer 2010 2025
    • 9. 2010 SnapshotIndian Upper-Middle German Population :Class: 80 million 80 million
    • 10. 2025 Outlook Indian Upper-Middle Population of the EU Class: 550 million 500 million
    • 11. 2050 Consumption
    • 12. Booming India“The global meltdown of 2008 hardly had any effect onIndia, while the entire world was reeling under therecession effect. It was India which presented itself as ashining example to other nations, on ways to come outof crises successfully and prosper simultaneously.” - fxnewsindia
    • 13. Retail explosion 5th largest retail market globally Worth $ 500 billion Growth rate >15% per annum 5% Organized, growing at 35% per annum Organized retail is being tipped as one of the biggest gainers from growing consumerism and rising income
    • 14. Drivers for retail growth E commerce / Online… Rise in use of credit/debit… Real estate boom One stop shopping Spurt in urbanisation Changing lifestyle Large young populationGrowing disposable income Booming Economy
    • 15. How to enter the boomingIndian retail marketGolden rules for any exporting company
    • 16. The Right Placement Organized Trade Traditional Trade
    • 17. Types of RetailUnorganized trade Organized trade 95% of total retail market  5% of total retail market Mix of modern stand  Growing with 35% annually alone stores and  Leading chains like traditional stores Spar, Hypercity, Natures Traditional store’s Basket growing rapidly product portfolio is  Broad portfolio of mostly domestic products, domestic and Modern stand alone imported store’s product portfolio carries imported ranges as well
    • 18. Social classes in IndiaClass Key FactsUpper-middle  High Disposable income  Internationally influenced  Living in the metros  High willingness to experiment and sufficient budget to buy imported goodsMiddle  Young working people  Office jobs  Willingness to experiment, but limited budget to buy imported goods  Good future perspective  Higher income than the parents at young ageLower  Living in rural areas and poorer parts of the metros  Getting paid in daily wages  Working to survive, no disposable income
    • 19. Your customer:Upper - middle class 2012 2025 7% Upper- Upper- middle middle 21% Middle 39% 42% Middle 72% Lower Lower 19%
    • 20. Consumer / Retailin picturesModern Indian men at aHennessy Club launch /Modern Trade Outlet inDelhi
    • 21. Consumer / Retailin PicturesIndian crowd on a nightout / GarudaMall, Bangalore
    • 22. Consumer / Retailin PicturesFashionable Indian girls /Phoenix Mall, Bangalore
    • 23. Consumer / Retailin PicturesBollywood Stars /Forum Mall, Bangalore
    • 24. Expected changesLaw ImpactGST Removal of compounding effect of non- interchangeability of service tax and VATLocal Removal of inter-state “import duties” andtaxes city level “Octroi”FDI Allowance of majority stake holding in multi- branded retail (e.g. super markets) resulting in inflow of much required cash and know-howWTO Reduction in import duties and customs hassle expected
    • 25. Exporting to IndiaHow to introduce products successfully?
    • 26. The right product and price Quality Set MRP right Imported = Quality  Indians are price sensitive reg. their day Live up to this to day needs expectation!  Higher disposable Dress your product right income allows to experiment with imported products  No competition with local brands, but with other imported products
    • 27. Customer End-Price build-up 14% • VAT 2%+5% • CST • Octroi 60% • Margins for importer, distributor, retailer 45-60% • Duties • Clearing10%• Transport• Handling
    • 28. MRP Calculator (approximate) 45% duties 55% duties Snacks/chips etc Chocolate/mueslis etcSKU/pallet 750 1500 3000 SKU/pallet 750 1500 3000€ 0.50 212 162 137 € 0.50 225 172 146€ 0.75 269 219 193 € 0.75 285 232 206€ 1.00 325 275 249 € 1.00 345 293 266How this works1) Identify your relevant import duties2) Estimate #SKU/pallet and select your FOB price3) Define your MRP
    • 29. Price Levels in India Chocolates: 80 INR / Tropicana: 100 INR / Axe Deo: 150 INR / Milk: 45 INR / 1 litre 100gr 1 Litre 150mlNivea Shaving Foam: Pasta Sauce: 280 INR Local white wine: Smirnoff Vodka: 750 INR 200 / 200ml / 350gr 550 INR / 750ml INR / 1 Litre
    • 30. From our Portfolio Quickbury regular Non-Stop: VanDerMeulen Melba Toast: INR Antica Cantina: INR 180 INR 189 (125gr) 125 (100gr) INR 180 (200gr) Quickbury Sugarfree Lonka Davelaar Thorntons INR 245 INR 220 INR 400 INR 740
    • 31. Placement & PromotionSuccess of a product is determined by 2 factors:1. How many points of sale do you have?2. How many SKU’s per store do you sell? Increase POS Increase Sales/POS Listings (budget)  Sampling & promoting Margins to retailers  Brand awareness Nationwide distribution  Shelf network placement, presentation Quality products  Quality products Attractive price points  Attractive price points
    • 32. Listings for MTO MTO charges listing fees Chains Indication/ before placement SKU Listing fees are per SKU Spar € 175/- Listing fees vary and are HyperCity € 250/- highest for new suppliers Spencers € 85/- Listings depending on Natures Basket € 450/- perceived product Nilgiris € 200/- potential by MTO Namdharis € 150/- Listing procedures take 2- 4 weeks
    • 33. General Trade Outlets Pro’s of GTO Con’s of GTO  Many more outlets  Lower sales per store than MTO for imported products  No listing fees  Individual supply / invoicing  On average lower  Sub-distributor needed margins  Irregular in product  Free in-store portfolio promotions possible  No sales reports  Easier influenced by  No temperature merchandiser control
    • 34. Promotions Type Cost indication Product Visibility  In-store samplings In store €125/ day sampling  Floor stickers  Posters Floor stickers € 500 / month  Danglers Posters € 350 / month  Shelf talkers Danglers € 350 / month Expo participations Expo € 450 / weekend Social media participation campaigns Social media As per campaign
    • 35. Market Entry withNexusNovusIntroduction and expansion
    • 36. NexusNovus Enabling Business in India since 2007, headquartered in India Professional and pragmatic partner for SMEs Market Entry Services Strong nationwide network, leading to savings in cost & time Experienced team with Indo- European identity Unique portfolio: one-stop-shop
    • 37. NexusNovus Advantage European Management, we understand your needs and expectations Nation-wide distribution network including 7 distribution centers 5 years of experience in retail Products placed in 90% of all the modern retail outlets in India Network of merchandisers across all major cities. Negotiation skills in the Indian retail market and understanding of the business culture Qualified marketing and product promotion team
    • 38. 4 Steps to Success Test Place products in the shelves of organized and unorganized retail, promote them, collect consumer feedback and measure the actual sales results Evaluate Analyze the sales results and consumer feedback and see what implications this has for your product, your price point, your marketing strategy and your business development approach Plan Based on the evaluation, plan a detailed strategic approach on how to grow in the Indian market Expand After a successful test, activate all other major cities in India, increase the number of activations of MTO’s, GTO’s and Specialty Stores/Institutions, and support the retail activation with marketing and promotion activities
    • 39. Test, Promote, EvaluateOur job Shortlisting 5 SKUs with the manufacturer Calculating the MRP of the products Transport and duty clearance of the 2 pallets Coordinating and executing a pilot study in India in approximately 20 MTO outlets of 3 chains, 10-15 GTO outlets, and 5 Specialty Stores Organizing and executing in-store promotion activities and samplings Promoting the products through online media and events Providing detailed sales results overview every 2 weeks Creating a detailed evaluation report and expansion strategy at the end of the pilot Participating in events Bearing all other direct and indirect costs: Domestic transport, warehousing, personnel, management, shop visits etc.
    • 40. Test, Promote, EvaluateYour job Shortlisting 3-5 SKUs along with NexusNovus for which the pilot will be executed Supplying approximately 400-500 products per variety, Free of Cost Labeling the products as per the Indian Weight & Measurement requirements Support for activation budget
    • 41. For enquiries:Contact:Victor EveleensDirector I&Dv.eveleens@nexusnovus.com+91 80 6535 3528

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