Analysis of IndianIndustriesProf. Ashwin MalsheMarketing Department – ESSEC
Agenda• Study four Indian industries • Luxury • Pharmaceutical • Cosmetics • Processed food• Mobile banking (if time permits)• Case study on HUL Pureit water purifier
Source of Data• Most figures in this presentations are taken from multiple sources. A primary source has been industry reports published by consulting firms. I attribute data to the sources wherever applicable.
Luxury Market• Indian luxury market size - $5.7 billion in 2010• Growth at estimated 20% per year • By 2015, the market size will be close to $15 billion• Six cities dominate – Delhi, Mumbai, Bangalore, Chennai, Hyderabad, an d Pune• Traditional ‘low margin, high volume’ model is restrictive for luxury penetration• Presence of multiple brands • Hermes, Paul & Shark, Diesel, Canali, Tumi, Aston Martin, Ferrari, Harley Davidson, Ducati, Kiehl’s, LOccitane, Hakkasan, etc. Source – AT Kearney
Luxury• Indian consumer • Many Indians became rich recently (post 1990) • The typical luxury customer may be labeled ‘Parvenu’ • Wants to associate with other ‘haves’ and wants to disassociate from ‘have-nots.’ Uses loud signals • Price sensitivity remains high • Mercedes diesel sells much more than petrol version • Discounts are considered as entitlements by the Parvenus.
Luxury• Trademark laws • Counterfeits are common • Less than China, however • Poseurs are more likely to use them • PC Mallappa vs McDonald’s case • Delay in courts• Sales culture • Incentives are variable in most cases • High fixed as well as variable pay
Indian Market• Indian pharma market size was $11.6 billion in 2009 and growing at average rate of 14% annually • $20 billion by 2015 • Currently ranks between 10-14 in the world by size• Produces simple headache pills to sophisticated antibiotics • Almost every type of medicine is now made in India• 250 large companies control 70% market McKinsey and Corporate Catalyst India
Nature of Pharma Industry• From 1970 to 2005, Indian law recognized only ‘process patents’ and not ‘product patent’ • Many Indian companies started producing top notch drugs by changing process • This stopped with WTO adoption in 2005• Strong R&D base and low labor cost• Reaching the consumer through physicians • Direct to consumer advertising is relatively low
Emerging Trends• Global pharma companies are investing directly in India • Latest regulatory changes have created some challenges• Contract R&D • Drug discovery and development • Clinical trial organization• Contract manufacturing• Contract co-marketing alliances
Indian Market3,000.02,500.02,000.01,500.0 2011 20121,000.0 2013 500.0 0.0 Hair Bath Skin Oral Mens Care and Care Care Grooming Shower
Whitening Cream• Largest selling beauty product in India• Women • Commercial • Pond’s series• Men • Commercial
al India• Entered India in 1993• Presence in 100 top cities and towns• Four divisions • Consumer products (Garnier) • Professional products • Active cosmetics (Vichy) • Luxury (Lancôme)• Own manufacturing in Pune for hair and skin care
al India Value Share RankBeauty and personalcare 3.50% 6Color cosmetics 13% 3Hair care 8% 4Skin care 6.50% 2Mens grooming 0.90% 14