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Market Research Report : Reverse Logistics Market in India 2012


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Government concern for sustainability and manufacturers continuous endeavor to garner customer satisfaction are the key drivers of reverse logistics. Significance of reverse logistics is perceived from both economic as well as environmental perspective. To state it simply, reverse logistics stands for any operation that involves the reuse of damaged or faulty products after its refurbishment.
The report begins with an introduction section that gives a total overview of the logistics sector and its components. Thereafter, the section provides an elaborate understanding of reverse logistics as a service that the process of planning, implementing and controlling the efficient and cost effective flow of raw materials, in-process inventory, finished goods and related information, from the point of consumption to the point of origin, for the purpose of recapturing value of proper disposal. It also covers the difference between forward and reverse logistics for a clear understanding.
The introduction section is then followed by the market overview of reverse logistics market. The section demonstrates the current market size along with forecasted market size and growth rate that would be prevalent in the market till 2016. The section also deals with percent demand acquisition from the four zones of India along with the highest reverse logistics demanding sectors.

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Market Research Report : Reverse Logistics Market in India 2012

  1. 1. Insert Cover Image using Slide Master View Do not distortReverse Logistics Market – IndiaDecember 2012
  2. 2. Executive Summary • The Indian logistics market comprises approximately A% of the global logistics market in value terms • The reverse logistics market is currently valued at INR X1 bn and is expected to reach INR X2 bn in 20‐‐ at a  Market CAGR of X% • The reverse logistics market is currently experiencing a major share of demand from A zone of India followed  by B zone of India Need for  • Possible Reasons  for Return of Goods   • Reverse Logistics – With and Without Reverse  LE • Reverse Logistics Significance  Logistics • Reverse Logistics – Needs and Associated Benefits Sectoral Snapshots • Retail Market  • Electronics Market  MP • Automobile Market  • Pharmaceutical Market Drivers & Challenges Drivers Sustainability SA  Government Concern for   Garnering Customer Satisfaction  Growing Consumerism among Indians Challenges  Low importance given to returns management  Infrastructural bottlenecks  Warehouse space deficit  Economic Viability of Reusing Goods Key PlayersCompetition Player A  Player B Player C Player D Player E Player F Player G Player H REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 2
  3. 3. • Introduction• Forward & Reverse Logistics: Comparison• Market Overview• Distribution Channel• Need for Reverse Logistics LE   MP• Reverse Logistics Models• Industry‐wise Outlook SA• Drivers & Challenges• Key Issues• Technology Adoption• Recent Trends• Competition• Strategic Recommendations• Appendix REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 3
  4. 4. Logistics primarily deals in transportation and storage operations and is significantly aided by value added services LOGISTICS  SECTOR TRANSPORTATION STORAGE VALUE ADDED SERVICES Container Rail Transport Modern Warehousing LE   Freight Forwarding Road Transport MP Logistics Park 3PL/4PL SA Express Logistics Inland Container Depot Coastal Shipping Courier Services Container Freight Station Cold Chain Reverse Logistics Project Logistics Port• The logistics sector comprises 3 major segments – Transportation, Storage and Value‐added services• The growing Indian economy has a positive impact on players operating in storage and value‐ added services  segments, while in the transportation segment, container train and project logistics is projecting a promising future  outlook REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 4
  5. 5. Need for reverse logistics is conceived primarily from economic and environmental perspectives SAMPLE  Economic Perspective Process of planning, implementing and controlling the efficient and cost effective flow of raw materials, in‐process  inventory, finished goods and related information, from the point of consumption to the point of origin, for the  purpose of recapturing value of proper disposal REVERSE LOGISTICSProcess whereby companies can become more environmentally efficient through recycling, reusing, and reducing the  amount of materials used Environmental Perspective REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 5
  6. 6. Reverse logistics market is on a gradual growth path with manufacturers realizing its significance Market Overview LE  • The Indian logistics market comprises approximately f% of the global logistics market in value terms• Growing Indian economy is having a strong impact on both forward as well as reverse logistics P  Industry experts are of the opinion that approximately 4% to 40% of products go through a return journey   India has recorded an approximate return rate of m%  M• The reverse logistics market is estimated at INR X1 bn in 20‐‐ and is expected to reach INR X2 bn in 20‐‐ at a CAGR of X% A• Automotive, retail, pharmaceutical and electronics are key sectors driving the demand for reverse logistics S  Business houses spend approximately e‐f% of their logistics expenses on reverse logistics• Reverse logistics essentially encompasses customer pick‐up, call center management of returns, warranty  management, repairing, refurbishing, repacking of returned items, and resale of refurbished items to the end customer Market Size and Growth (Value‐wise)  INR units 1,500 X% X6 X5 1,000 X3 X4 X1 X2 500 0 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 6
  7. 7. Economic and environmental perspectives associated with reverse logistics… • Public interest organizations are operating in this space towards reusing and disposing  low value goods such as municipal waste which is expensive to recycle Reverse logistics by non‐governmental  • Opportunity  exists  for  NGO’s as  it  becomes  extremely  difficult  for  the  government  to    organizations  solely mobilize all waste material through reveres logistics  LE (NGOs) • Example ‐ SAAHAS,  a  Bangalore  based  voluntary  organization,  is  committed  to  finding  P solutions to problems related to solid waste management M Corporate self  SA • In this mode, reverse logistics is established and managed by large manufacturers who  have the resources and available finances to execute its operations in this space  • Goods  covered  under  reverse  logistics  operations  include  product returns  (inventory  returns,  warranty  returns,  damaged  goods),  product  recalls,  recycling,  reuse  of  owned  materials, waste disposal, repair and remanufacturing reverse logistics • Large amounts of initial investment is need to set up this huge and fragmented kind of  self owned reverse logistics operations • Example ‐ Future Group has its own logistics setup which is providing reverse logistics  services to its indigenous companies including Big Bazaar, Pantaloon etc. REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 7
  8. 8. SAMPLE Industry‐wise Outlook – Summary  Auto  Industry Consumer CURRENTLY  Retail  Electronics Industry OPERATIVE Industry Pharmaceutical  Industry REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 8
  9. 9. Consumer electronics and durables segment is enjoying increased demand due to technological advancementsElectronics Market – Overview Consumer Electronics and Durables• The consumer electronics and durables market is  C growing at a phenomenal pace• Young demographic population, rising disposable  INR bn 600 LE   M% B P income, easy finance options along with growing  prominence of consumer electronics retail stores and  400 A M online retail industry are the key drivers for the  SA industry 200Consumer Electronics and Durables Market Segmentation 0 20‐‐ 20‐‐e Consumer  White Brown Sales Trends in Consumer Electronics Electronics • Television sets • Set Top Boxes P Q R S •Microwave Ovens • Audio and Video  ‘000•Air Conditioners •Chimneys Players 7% 20,000•Refrigerators •Fans • Personal  15,000 P2•Washing Machines •Electric Irons Computers P1 • Laptops and PCs 10,000 •Juicers Q2 5,000 Q1 •Mixer and Grinders • Cell Phones R1 R2 • Digital Cameras 0 S1 S2 • Camcorders 20‐‐ 20‐‐ REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 9
  10. 10. Forward and Reverse Supply Chain in Electronics Sector Raw Material Landfill LE  Forward Logistics Flow in Electronics Sector Reverse Logistics Flow in Electronics Sector Part Fabrication MP Recycle SA Assembly Remanufacture Parts Assembly Distribution Refurbish Consumers Secondary Markets (in case of resell due to outdating) REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 10
  11. 11. Drivers & Challenges – Summary  LE   MP Challenges SA Low Importance Given to Returns  Drivers Management Government Concern for Sustainability Infrastructural Bottlenecks Garnering Customer Satisfaction Warehouse Space Deficit Growing Consumerism among Indians Economic Viability of Reusing Goods REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 11
  12. 12. RLMS addresses core reverse logistics requirements that  SAMPLE help in easy identification and repair of defective products Reverse Logistics Management System (RLMS) Process and Benefits • A web‐based application that captures all commodity related information from warranty to final disposal Process• It is a configurable and scalable solution that enables after sales management of goods sold• Cost of installation depends on the number of users and operation period allotted by the client company – the  cost may range anywhere between INR 1.5 mn to INR 4 mn as per the requirement • The RLMS can be installed by either the manufacturing company or by reverse logistics service provider • Improved customer satisfaction • Reduced Turn Around TimeBenefits • Advanced planning in warehouses • Reduced transportation costs • Advanced tracking functionality • Decision‐making on product types and easy identification of defective parts REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 12
  13. 13. Major Private Companies – Summary Net Profit/Loss1,600 Size of the Bubble represents Market 1,400 Capitalization in INR units1,200 Player A1,000 800 LE   600 MP SA 400 Player C 200 Player B 0 ‐200 ‐400 ‐2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Total Income Player A Player B Player C REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 13
  14. 14. Public: Domestic Company – Player A (1/3)Company Information Offices and Centres – India  Player ACorporate Address 5th Road, 6th Street,  City A – 700 xxxTel No. 91 22 6679 xxxxFax No. 91 22 6679 xxxxWebsiteYear of Incorporation 19‐‐ LE  Ticker SymbolStock Exchange 53xxxx (BSE) M Bombay Stock Exchange P City X Head OfficeProducts and ServicesCategory Products/ServicesS A Key People Provides air, sea and road freight Freight forwarding Name Designation forwarding services  Planning and implementation of supply  Person A MDLogistics chain solutions Person B CFO Provides facility management,  Person C CEOWarehousing and  inventory management and material Distribution management solutions REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 14
  15. 15. Private: Foreign Company – Player A (2/3) Financial Snapshot Key Ratios y‐o‐y change  Total Income Net Profit/Loss Particulars  (20‐‐to‐‐) 20‐‐ 20‐‐ 20‐‐ 20‐‐ INR units INR units Profitability Ratios Operating Margin250 ‐20 Net Margin200 a Profit Before Tax Margin ‐40 Return on Equity d  150 b c R4 Return on Capital Employed LE100 R3 Return on Working Capital ‐60 50 R2 Return on Assets P R1 Return on Fixed Assets 0 ‐80 Cost Ratios 20‐‐ 20‐‐ 20‐‐ 20‐‐ M Operating costs (% of Sales) Administration costs (% of  SA Sales)Financial Summary  Interest costs (% of Sales)• The company incurred a net loss of INR d units in FY 20‐‐, as  Liquidity Ratios Current Ratio compared to net loss of INR c units in FY 20‐‐ Cash Ratio• The company reported total income of INR R4 units in FY 20‐‐,  Leverage Ratios registering an increase of m% over FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio• The company earned an operating margin of f% in FY 20‐‐, an  Interest Coverage Ratio increase of g percentage points over FY 20‐‐ Efficiency Ratios• The company reported debt to equity ratio of d in FY 20‐‐, a  Fixed Asset Turnover Asset Turnover decrease of h% over FY 20‐‐ Current Asset Turnover Working Capital Turnover Capital Employed Turnover Improved Decline REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 15
  16. 16. Private: Foreign Company – Player A (3/3) Key Business Segments Key Geographic Segments A B100% 100% X X  50% 50% 0% 20‐‐ P 0% LE 20‐‐Business HighlightsDescription  News SAMOverviewRecent TransactionsReverse Logistics REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 16
  17. 17. Appendix SAMPLE Ratio Calculations Ratio Calculations (Operating  Current Assets / Current Operating Margin Current Ratio Income/Revenues)*100 Liabilities Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +  Cash Ratio Marketable Securities) / Current  (Income Before Tax / Revenues  Liabilities)} Profit Before Tax Margin *100  Total Liabilities / Shareholders  Debt to Equity  (Net Income / Shareholders  Equity Return on Equity (ROE)  Equity)*100  {Total Debt / (Shareholders  Debt to Capital Ratio EBIT / (Total Assets – Current  Equity + Total Debt)} Return on Capital (ROCE)  Liabilities)*100  Interest Coverage Ratio EBIT / Interest Expense (Net Income / Working Capital) Return on Working Capital *100 Fixed Asset Turnover Sales / Fixed Assets Return on Assets (Net Income / Total Assets)*100  Asset Turnover Sales / Total Assets Return on Fixed Assets (Net Income / Fixed Assets) *100  (Operating Expenses / Sales)  Current Asset Turnover  Sales / Current Assets Operating Costs (% of Sales) *100 Administration Costs (% of  (Administrative Expenses / Sales)  Working Capital Turnover Sales / Working Capital Sales) *100  Capital Employed Turnover  Sales / Shareholders Equity Interest Costs (% of Sales) (Interest Expenses / Sales) *100  REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 17
  18. 18. Thank you for the attentionThe Reverse Logistics Market – India report is part of Netscribes, Inc. Transportation & Logistics Series.For any queries or customized research requirements please contact:Phone: +91 33 4027 6214/6215E‐Mail: info@netscribes.comFollow us on:About Netscribes, Inc.Netscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 18