demand spotting in an uncommon India

India’s Emerging Demand Story

Under the Scanner

Ranjeet Laungani, Vice President, Nielsen

THE INDIAN GROWTH STORY: SIZZLE OR FIZZLE?

$35bn↗$208bn FDI INFLOWS (FY 2000-2006 TO FY 2006-2012)

13.3mn↗60.6mn MIDDLE CLASS HOUSEHOLDS (2005 TO 2015)

8,481↗18,578 BOMBAY STOCK EXCHANGE SENSEX (2009 TO 2012)

THE INDIAN GROWTH STORY: SIZZLE OR FIZZLE?

19%↘16% FMCG VALUE GROWTH (2010 TO MAT AUG 2012)

9.3%↘5.5% GROWTH IN GDP (Q2 2010 TO Q2 2012)

26%↘12% YOY AUTO SECTOR GROWTH: NUMBER OF VEHICLES

(2010-11 TO 2011-12)

GLOBAL PERSPECTIVE ON DEMAND AND

CONSUMPTION

CHANGING FACE OF DEMAND IN

INDIA

GLIMPSE THE FUTURE OF TAPPING

LATENT DEMAND

INDIA IS YET TO EMERGE AS A HIGH CONSUMPTION MARKET

FMCG CONSUMPTION PER CAPITA ACROSS EMERGING PEERS

FMCG CONSUMPTION AS A % SHARE OF GDP

Philippines 7.5 Thailand 4.6 Nigeria 4.6 China 2.9 Indonesia 2.4 India 2.2

World Bank 2010; Nielsen 2011

Thailand $214 Philippines $161 China $128 Indonesia $72 Nigeria $59 India $31 UN 2010; Nielsen 2011

Urban

$65 Rural

$15

GLOBAL PERSPECTIVE ON DEMAND AND

CONSUMPTION

CHANGING FACE OF DEMAND IN

INDIA

GLIMPSE THE FUTURE OF TAPPING

LATENT DEMAND

TECTONIC SHIFTS ARE RESHAPING INDIA’S DEMAND BEDROCK

ECONOMIC DEMOGRAPHIC SOCIETAL LIFESTYLE

CHANNEL LINES ARE BLURRING

Modern Retail

Paan Plus

General/ Grocer

Chemist

Baby Foods ↗106% Packaged Tea ↗ 36%

Contraceptives ↗ 129% Diapers ↗ 65%

DEMAND AT THE TOP AND BOTTOM OF THE PYRAMID

FY03 FY10 Small 82% 78% Midsize 17% 18% High end 1% 4%

Source: ICRA and SIAM; High end = Executive, Premium, Luxury

AUTO MARKET SHARES BY SEGMENT

FMCG VALUE GROWTH BY SEGMENT

Low Unit Packs 23% Small Packs 21% All Urban India 19%

Source: Nielsen; Urban FMCG; 2 Year CAGR (Value Growths)

DEMAND IS PERMEATING

Small Towns 18.7% All India 17.0% Villages 16.1% Metros 15.9% Source: Nielsen; Period Ended August 2012; Small Towns = <1 million population

FMCG VALUE GROWTH (2-YEAR CAGR)

WHAT ARE THE RIGHT MARKERS TO FOLLOW WHEN GDP GROWTH IS NOT VERY PREDICTIVE OF SHORT-TERM DEMAND?

Top

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Bih

State FMCG Growth

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2011 All-India Average (15% FMCG Growth, 6.5% GDP Growth)

Har

GLOBAL PERSPECTIVE ON DEMAND AND

CONSUMPTION

CHANGING FACE OF DEMAND IN

INDIA

GLIMPSE THE FUTURE OF TAPPING

LATENT DEMAND

Future Demand

TRENDS SHAPING DEMAND IN THE NEAR TERM

NUTRITION & WELLNESS

PERSONAL CONSUMPTION MINDSET

PARTAKING IN GLOBAL BRAND CULTURE

TIME SAVING/ ON THE GO

PREMIUMIZATION & LIFESTYLE UPGRADE

DIGITIZATION

IS TOMORROW ALREADY HERE?

GEO FENCING IN MALLS FOR CONSUMER OFFERS

INTERNET-READY ‘CONNECTED’ TELEVISIONS

PRODUCT LAUNCHES ON SOCIAL MEDIA SITES

INNOVATION AND CREATIVITY AT THE FOREFRONT FOR CAPTURING PROFITABLE DEMAND

TABLET-ENABLED DOOR-STEP

FINANCIAL SERVICES

PLUG & PLAY OFFICE SUITES

PHYSICAL STORES RUN BY E-TAILING

WEBSITES

SINGLES-ONLY VACATION PACKAGES