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Analysis of MGI's India Consumer Report 2007
 

Analysis of MGI's India Consumer Report 2007

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    who want the entire report from MGI can go to this link.

    http://www.mckinsey.com/mgi/publications/India_consumer_market/index.asp
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    Analysis of MGI's India Consumer Report 2007 Analysis of MGI's India Consumer Report 2007 Presentation Transcript

    • Analysis of MGI’s India Consumer Report 2007 PGP FW/07-09/SEC-A © 2008 Indian Institute of Planning & Management ~ Ahmedabad Ankit Abda Balasubramanian V.A Mahesh Nakhwani Rahul Guhathakurta Samir Patel Simit Shah
    • Agenda
      • Bird of Gold: Transition from Turbo-Prop to Jet Engine
      • The quadrupling of Indian consumption, 2006–2025
      • The future development of the urban market
      • The future development of the rural market
      • How consumption patterns will change
      • Opportunities and challenges
      • Interpretations
      • “ India's consumer spending is set to quadruple by 2025, overtaking Germany, as a youthful population earns more and saves less, and millions climb out of poverty”
      • - study by the McKinsey Global Institute.
      Bird of Gold: Transition from Turbo-Prop to Jet Engine
    • MGI
      • Mission
      • Objectives
      • Combinations
    • Ingredients
      • GDP
      • Real Compound Growth
      • Income Level: 291 million – 583 million
      • 5 th Largest
      • Consumption
      • Food and Communication
    • Approaches
      • A proprietary database
      • An econometric forecasting model
      • On the Ground Insights
    • What Moving India’s Consumption Growth ?
    • Big Bigger Biggest …
    • “ Middle Age” of Indian Consumers
    • The Future Development of Urban Market
    • India : A global village
    • Cities of Buzz
    • Mumbai Se Aaya Mera Dost…
    • The future development of the rural market
    • Rural Consumption
    • Rich Rural India is going to be a reality
    • Aspirer's Aspirations
    • Who will Lead the Growth?
    • How consumption patterns will change ?
    • Spending in India
      • The historical pattern in India and in most developing economies shows that, as incomes rise, consumers tend to spend proportionally less on basic necessities and more on discretionary items.
      • MGI defined necessities as food and apparel.
      • But they excluded housing because local-market housing conditions differ significantly across India .
    • Spending Patterns
    • “ Pocket – Maar ” Factor
    • Growth Forecast Depends On Infrastructural Growth
    • Which one will be the Rookie?
      • Opportunities & Challenges
    • Opportunities are Knocking @ Doors
      • Many consumers will engage in “choice-driven” consumption for the first time.
      • Large numbers of consumers will be in the “new-to-bracket” class.
      • Business models will need to adapt.
      • Market winners are yet to be decided.
    • What will cause the Slowdown?
      • A slowdown or backlash against the reform agenda.
      • Poor fiscal discipline
      • Lack of investment in infrastructure
      • Lack of investment in education
    • Levels of Discretionary Spending Power
    • Narrow Lane
    • Interpretations ? To !
    •  
    •  
    • What will trigger this boom in the consumer market? it will be a combination … more income per person more people moderating savings
    • The Greatest Question How will companies emerge first in the field -with volumes or value play?
    • Volume Vs Value Play
      • Value players will primarily target the middle and upper classes .
      • They can offer premium quality products at prices comparable with those prevailing in other markets, focusing on customers in the top end.
      • Interpretation: The target group will be considerably limited and brand-owners will have to wait for the segment to sustain itself.
    • Volume Vs Value Play Volume based companies can choose to drive price points down, accepting the resultant pressure on margins as the price they must pay. Interpretation: As the target group spills outward to tier II and III towns, these brand-owners will need to follow, suitably armed with distribution and service networks and seamless logistics support.
    • Ground Zero of Battle Zone The report predicts that the battle for new customers will be most hard-fought in the lower middle class, where, taste will become more aspirational spending power increases. even as
    • Income-Distribution Drivers
      • Distribution of educational attainment
      • Distribution of household size
      • Distribution of household labor-force participation
      • Distribution of household personal and disposable income
      • Labor Force Distribution
    • Wage & Income Hot Curry The most significant increases in choice - driven purchases .
    • How to serve the Wage & Income Hot Curry?
      • The challenges for companies are:
      • Educate customers
      • Create brand awareness
      • Customize services and support functions to the segment's needs
    • “10” Drivers
    • Report Findings : FB&T
      • Food, beverages, and tobacco (FB&T) sector is going to witness tremendous growth of 10 trillion rupees in next 20 years.
      • Upwardly-mobile middle classes to dominate maturing urban food market.
      • Food retailing to show rapid growth but will face constraints.
      • Share-of-wallet of FB&T to fall rapidly
    • Report Findings : Transportation
      • India’s public transport system changing rapidly.
      • Demand for cars and two-wheelers to boom.
      • Fuel to become largest transportation subcategory.
      • Transportation’s high share-of-wallet to rise further.
    • Report Findings :Personal Product & Services
      • Personal non-durables to grow across urban and rural areas
      • Personal-and household-services growth driven by low labor costs
      • Urban areas push jewellery consumption higher
    • Report Findings : Health Care
      • Urban health care to be driven by upper-income and middle classes
      • Health care supply side changing dramatically.
      • Health-care services to be potentially the most lucrative segment
      • New patent system boosts interest in pharmaceuticals
      • Medical tourism will play a stimulating role in the future
    • Report Findings : Apparel
      • Urban middle- and upper-class apparel spending to grow explosively
      • Consumer preferences evolving markedly
      • True take-off in rural apparel market still a decade away
      • Share-of-wallet on apparel will shift modestly
    • Last Question Based on Conclusion Growing customer base in the existing market Following their upwardly mobile customers competing with new rivals who will try and lure them away An extremely tedious and spine cracking job What Should Companies indulged in?
    • The End … is the New Beginning