That consumption is growing by leaps in markets beyond the traditional top metros, is not anymore news. It is a simple fact. This presentation aims to offer broad empirical evidence of the shift in priority markets to the geographic lower tiers of the Indian consumption ladder.

1. The story of 8 metros
& 7800 towns
The Big Picture
11 SEPTEMBER 2013

2. The big deal
2
A population base of
121 Crores
A market that has
expanded by 18Cr
individuals
A Trillion-Dollar
economy, will shortly
add another Trillion
dollars to it’s GDP
Source: Census of India, 2011

3. Urban India continues to call the shots
3
India
No.
Admin
Units
% Share
of HHs
% Share
of Pop
%
Decadal
Growth
Total HH
Income
(Rs.Crs)
%
Share
Urban India 7,798 33% 32% 32% 50,15,000 55%
Rural India 6,40,867 67% 68% 13% 40,42,300 45%
Source: Indicus Analytics Market Skyline of India 2013
A distinct decadal growth skew combined with a higher share of income
on a lower population base continues to present Urban India as an
attractive proposition.

4. 522 Cities of the Future
4
Town Class Pop Strata
No.
Admin
Units
%
Distribution
of HHs
Ave
HH
Size
Top-8 Metros MDKCBHPA 8 17% 4.39
Tier 1 >10L 41 16% 4.62
Tier 2 6-10L 27 5% 4.53
Tier 3 2-6L 161 13% 4.53
Tier 4 1-2L 293 10% 4.55
Large Towns 50k-1L 659 11% 4.66
Medium Towns 20k-50k 2003 15% 4.71
Small Towns 10k-20k 2230 8% 4.62
Very Small Towns <10k 2376 4% 4.58
Urban India 7,798 100% 4.57
Source: Indicus Analytics Market Skyline of India 2013
Layered just below
the Top-8 Metros are
522 Cities
Accounting for 44%
of Urban HHs
Presenting a
seamless layer of
transition for
marketers

5. 41% of Rs.50 Lakh Crores form this second layer
5
Source: Indicus Analytics Market Skyline of India 2013
29%
17%
5%
11%
8%
8%
12%
6%
3%
Share of Total HH Income
Top 8 T1 T2 T3 T4 LT MT ST VsT
Almost one half of Urban
India’s consumer wealth is
spread across 4 Tiers
below the Top-8 Metros
Hard to ignore, Corporate
India is taking note
But socio-cultural &
economic variations
present challenges quite
different from established
metros

6. Lower PCIs present the first level of challenge
6
Town Class Pop Strata
PCI
(Rs.)
Index
Top-8 Metros MDKCBHPA 2,26,673 100
Tier 1 >10L 1,30,207 57
Tier 2 6-10L 1,09,953 49
Tier 3 2-6L 1,02,642 45
Tier 4 1-2L 95,739 42
Large Towns 50k-1L 94,878 42
Medium Towns 20k-50k 98,703 44
Small Towns 10k-20k 98,433 43
Very Small Towns <10k 1,00,000 44
Urban India 1,25,187 55
Source: Indicus Analytics Market Skyline of India 2013
The prism of PCI continues
to make these cities look
like high-volume, low
margin territories
The nets have to be wider
But lets make no mistake,
market infrastructure &
logistics have grown
dramatically over the past
decade

7. But there’s always been a Middle India even in
established Metros
7
Pop-Strata Base <75k 75k - 1.5L 1.5L - 3L 3L - 5L 5L - 10L >10L
Metros 100 21% 16% 17% 12% 13% 22%
Tier 1 100 31% 18% 17% 11% 11% 13%
Tier 2 100 35% 18% 17% 10% 10% 10%
Tier 3 100 36% 18% 17% 10% 9% 9%
Tier 4 100 38% 18% 16% 10% 9% 8%
Towns 100 39% 18% 16% 10% 9% 8%
Distribution of Urban HHs by Rs.Income per annum
Source: Indicus Analytics Market Skyline of India 2013
Accounts
for just
30% of all
Urban HHs
in India

8. PCEs throw interesting insights
8
FMCG
Processed
Food
Personal
Care
Durables Clothing Footwear Education
Banking
Services
Computer
with
Internet
Metros 100 100 100 100 100 100 100 72% 17%
Cities >10L 61 56 79 103 78 76 82 72% 11%
Cities 1-10L 56 50 65 90 71 66 55 67% 7%
Towns <1L 56 50 62 91 67 64 50 63% 4%
Index of Per Capita Expenditure HH Penetration
Pop Strata
Source: Indicus Analytics Market Skyline of India 2013
The second layer of 10L+ Metros seem to be responding differently to category cues.

9. Category consumption bases are in place
9
27%
16%
24%
33%
Processed Food
Rs. 1,85,931 Crs
Metros Cities >10L Cities 1L-10L Cities <1L
25%
16%
25%
34%
FMCG
Rs. 2,92,240 Crs
23%
18%
26%
33%
Personal Care
Rs. 31,178 Crs
Source: Indicus Analytics Market Skyline of India 2013

10. Accounting for almost 80% of the Urban Market
1010
17%
18%
27%
37%
Durables
Rs. 1,57,584 Crs
Metros Cities >10L Cities 1L-10L Cities <1L
22%
17%
27%
35%
Clothing
Rs. 1,80,989 Crs
22%
17%
26%
34%
Footwear
Rs. 32,818 Crs
Source: Indicus Analytics Market Skyline of India 2013

11. Consumer essentials are falling in place
11
Metros Cities >10L Cities 1L-10L Cities <1L
18%
18%
29%
35%
HHs Availing Banking Services
25%
21%
24%
30%
Education
Rs. 84,062 Crs
35%
22%
25%
18%
HHs Computer with Internet
Source: Indicus Analytics Market Skyline of India 2013

12. And this is the Real Story of India Unmetro’ed
12
Microwave Ovens
Air Conditioners
Four Wheelers
Computers
Washing Machines
DVD Players
Refrigerators
Two Wheelers
6%
10%
9%
17%
28%
35%
54%
28%
40L+ 10L-40L 1L-10L <1L
40L+ 10-40L 1-10L <1L
Two Wheelers 4% 6% 7% 8%
Refrigerators 7% 9% 9% 12%
DVD Players 17% 18% 18% 23%
Washing Machines 10% 13% 13% 18%
Computers 14% 20% 21% 26%
Four Wheelers 8% 14% 14% 15%
Air Conditioners 12% 21% 21% 23%
Microwave Ovens 14% 28% 28% 31%
DURABLES
CAGR 2007 - 2012
PENETRATION 2012
Source: IRS 2008 R1 & 2012 Q4

13. Lifestyle drivers are in cruise mode
13
Branded Soups
Processed Cheese
Deodorants
Ketchup / Sauces
Instant Noodles
Soft Drinks
Nail Polish
Toilet Cleaners
Shampoos
6%
8%
15%
26%
51%
45%
22%
51%
75%
40L+ 10L-40L 1L-10L <1L
PENETRATION 2012
Source: IRS 2008 R1 & 2012 Q4
40L+ 10-40L 1-10L <1L
Shampoos 5% 7% 6% 6%
Toilet Cleaners 10% 12% 11% 14%
Nail Polish 8% 8% 7% 8%
Soft Drinks 3% 4% 6% 6%
Instant Noodles 14% 23% 21% 24%
Mineral Water 5% 10% 8% 11%
Chocolates 7% 10% 7% 9%
Ketchup / Sauces 7% 13% 13% 14%
Deodorants 16% 22% 14% 17%
Processed Cheese 10% 21% 15% 19%
Branded Soups 17% 27% 21% 18%
FMCG
CAGR 2007 - 2012

14. And this is Young India territory
14
Town Type
Population
aged 15-19
years
Population
aged 20-24
years
Population
aged 25-29
years
Population
aged 30-34
years
Top-8 Metros 8.47% 9.03% 8.93% 9.48%
Tier 1 9.14% 9.81% 9.12% 8.75%
Tier 2 9.05% 9.86% 9.15% 8.48%
Tier 3 9.34% 10.19% 9.21% 8.36%
Tier 4 9.45% 10.25% 9.27% 8.35%
Large Towns 9.35% 10.11% 9.22% 8.37%
Medium Towns 9.16% 9.95% 9.09% 8.31%
Small Towns 9.00% 9.84% 9.09% 8.37%
Very Small Towns 9.07% 10.00% 9.20% 8.52%
Urban India 9.1% 9.8% 9.1% 8.6%
Composition of Age-Group to Total Pop
Source: Indicus Analytics Market Skyline of India 2013
Most second
layer metros and
beyond posses a
larger proportion
of younger age
groups
A generational
shift far more
pronounced than
the established
metros is
underway

15. Coupled with high growth in affluence indicators
15
Not only are the 10L+ segment of Metros mirroring population profiles of
the big 8, they are galloping away in the growth in affluent consumers
SEC A SEC B SEC A SEC B SEC A SEC B
Urban India 100 100 11% 17% 25% 18%
40L+ 36% 27% 16% 19% 17% 15%
10-40L 22% 16% 15% 17% 43% 24%
5-10L 10% 10% 11% 17% 20% 13%
1-5L 17% 21% 9% 17% 23% 17%
<1L 16% 26% 6% 15% 29% 19%
Urban India
Pop Strata
Distribution 2012 Composition 2012 Growth 2007-2012
Source: IRS 2008 R1 & 2012 Q4

16. An extremely media-mature urban India
16
Source: IRS 2008 R1 & 2012 Q4
0%
25%
50%
75%
100%
C&S AD-TR AD-AIR Radio Internet
40L+ 10L-40L 5L-10L 1L-5L <1L
0%
25%
50%
75%
100%
C&S AD-TR AD-AIR Radio Internet
40L+ 10L-40L 5L-10L 1L-5L <1L
MEDIA REACH - ALL ADULTS MEDIA REACH - SEC A
Traditional media continues to hold fort very strongly across Urban Tiers
AD-TR: Any Daily–Total Readership
AD-AIR: Any Daily–Average Issue Readership

17. Media continues to find huge room for growth
17
C&S AD-TR AD-AIR Radio Internet
40L+ 6% 0% 1% -3% 20%
10L-40L 10% 3% 4% 3% 27%
5L-10L 10% 2% 3% 1% 24%
1L-5L 10% 3% 1% -1% 28%
<1L 10% 2% 2% -6% 38%
URBAN
INDIA
CAGR 2007-2012
C&S AD-TR AD-AIR Radio Internet
40L+ 4% 2% 1% -4% 14%
10L-40L 10% 7% 7% 10% 23%
5L-10L 7% 4% 4% 4% 17%
1L-5L 7% 4% 3% 1% 23%
<1L 9% 5% 5% -1% 28%
SEC A
CAGR 2007-2012
Source: IRS 2008 R1 & 2012 Q4
Doomsday prophecies not withstanding, consumption of traditional media continue
to rapidly grow across every strata of Rest of Urban India
AD-TR: Any Daily–Total Readership
AD-AIR: Any Daily–Average Issue Readership

18. CONSUMER CLASSIFICATION
AND FINALLY A PONDER
18

19. The traditional consumer classification grid (SEC)
Education Illiterate School School SSC / Some College Graduate/ Graduate /
upto 4 yrs 5-9 yrs HSC But not grad PG-Gen PG-Prof
Occupation
Unskilled Worker E2 E2 E1 D D D D
Skilled Workers E2 E1 D C C B2 B2
Petty traders E2 D D C C B2 B2
Shop ownrs D D C B2 B1 A2 A2
Bsn Men / Inds
(no.of emp)
0 D C B2 B1 A2 A2 A1
1-9 C B2 B2 B1 A2 A1 A1
>10 B1 B1 A2 A2 A1 A1 A1
SEP D D D B2 B1 A2 A1
Clerks /Sales D D D C B2 B1 B1
Supervisors D D C C B2 B1 A2
Junior Exec C C C B2 B1 A2 A2
Mid/Senior Exec B1 B1 B1 B1 A2 A1 A1

20. No. of
Durables
Owned
Illiterate
Literate but no
formal schooling /
School upto 4 yrs
School - 5
to 9 yrs
SSC/HSC
Some College
(incl a Diploma)
but not Grad
Graduate / Post
Graduate:
General
Graduate / Post
Graduate:
Professional
None E3 E2 E2 E2 E2 E1 D2
1 E2 E1 E1 E1 D2 D2 D2
2 E1 E1 D2 D2 D1 D1 D1
3 D2 D2 D1 D1 C2 C2 C2
4 D1 C2 C2 C1 C1 B2 B2
5 C2 C1 C1 B2 B1 B1 B1
6 C1 B2 B2 B1 A3 A3 A3
7 C1 B1 B1 A3 A3 A2 A2
8 B1 A3 A3 A3 A2 A2 A2
9+ B1 A3 A3 A2 A2 A1 A1
Education
 Electricity Connection
 Ceiling Fan
 LPG Stove
 Two-Wheeler
 Colour TV
 Refrigerator
 Washing Machine
 Personal Computer / Laptop
 Car / Jeep / Van
 Air Conditioner
 Agricultural Land
The new consumer classification grid (NCCS)

21. Are we under-estimating the depth of our markets?
21
Source: IRS 2012 Q4
SEC All A1 A2 B1 B2 C D E1 E2 R1 R2 R3 R4
Pop Crs 91.3 1.1 2.1 2.4 2.5 6.1 6.8 3.4 5.0 3.0 9.6 25.8 23.4
Distribution 100 1% 2% 3% 3% 7% 7% 4% 6% 3% 11% 28% 26%
NCCS All A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3
Pop Crs 91.3 1.2 2.9 4.8 5.5 6.9 9.6 9.6 11.7 13.0 14.4 8.5 3.2
Distribution 100 1% 3% 5% 6% 8% 11% 10% 13% 14% 16% 9% 3%
The NCCS brings alive the concept of “Middle India” into sharp focus

22. The problem gets magnified across Urban India
22
The redistribution of affluence segmentation opens up huge possibilities in
assessing & monitoring a market
A B C D E
Pop (Crs) 29.6 3.3 5.0 6.1 6.8 8.4
Distribution 100 11% 17% 21% 23% 28%
Pop (Crs) 29.6 6.3 6.4 8.1 6.0 2.6
Distribution 100 21% 22% 27% 20% 9%
Urban India
SEC
NCCS
Source: IRS 2012 Q4

23. NCCS completely turns classification on its head
23
Base-line consumer classification usually has enormous implications in decisions
pertaining to entering new markets and the nature of investments to be made
A
42%
B
38%
C
16%
DE
4%
SEC Composition of NCCS-A
Urban India
A
83%
B
14%
NCCS Composition of SEC-A
Urban India
Source: IRS 2012 Q4

24. The real rise of Unmetro India
24
A B C D E
40L+ 78% 36% 23% -34% -82%
10L-40L 88% 37% 28% -24% -80%
5L-10L 116% 35% 33% -17% -77%
1L-5L 106% 19% 41% -3% -67%
<1L 118% 25% 38% 9% -57%
URBAN
INDIA
NCCS vs SEC Variance
Source: IRS 2012 Q4
Enumerating HH affluence through a more direct metric of Product ownership alters
the consumer segment landscape of Urban India

25. Smaller cities undergo significant changes in character
25
Mum Del Jodh Jal Aur Luc Coim Rjk Lud
89% 98% 162% 198% 269% 112% 105% 108% 160%
Pop base Inc
of NCCS-A
over SEC-A
Source: IRS 2012 Q4
The NCCS clearly presents a wider and a more robust reading of real affluence,
especially that of non-metro Urban India

26. Thank you
26