india story 2009

8/7/2019 India Story 2009

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THE INDIA STORY

SCRIPTING A BRIGHTER FUTURE


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India overview

Media & entertainment in India

Indian advertising industry

Outline


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India Overview


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28 states & 7 union territories divided largely on the basis of language

22 official languages

Over 1700 dialects

4532 culturally distinct communities that co-exist in harmony

1088 million people* reside across 91 eco-cultural (ecological & cultural) zones

(Source: Census of India 2001); * Estimate based on 2001 Census figure of 1028.7 mn

The Great Indian Diversity


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India: Eclectic Mix

27.8% of India is urban and 72.2% is still rural

No. of inhabited villages 593,731

Indian consumer market is well spread outgeographically

A high concentration exists in urban centres


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India: Eclectic Mix

Projected Population

(Source: National Commission on Population Government of India)

2264

5

5

2 2 2 6

ear

Population(inmillions)


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Demographics

India still has population around

28% in the rural areas

26%in the urban areas livingunder the national poverty line

(Source: World Bank Indicators,2008) 0

5

10

15

20

25

30

35

40

45

50

India China

% Population Pov rty Line


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Demographics

Literacy is low, however

increasing at a good pace. The

total adult literacy rate in India

was 66% in 2007

Most developed countries have

close to 100% literacy

(Source: UNICEF- India stats 2008)

US & UK

Brazil

China

India

0 20 40 60 80 100


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Demographics

A new India, a young India



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below 6yrs

7 to 14yrs

15 to 59yrs

60+

Demographics

Population Distribution



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Demographics


Fun seekers (0 - 6yrs): being exposed to

information technology, internationalbrands and cartoons

Discoverers (6 - 14yrs): discovering new

fashion, brands, status and lifestyle


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Demographics


Career seekers and Home makers (15 -

59yrs): eager to channelise theirenergies in new career avenues and

busy investing in household goods,

characterised by high investment, low

savings potential

Settlers (60 yrs+): Ready for

retirement after years of income

generation


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Demographics

Population Characteristics

Over 50% of Indias population is below 25forming one of the worlds youngest populations

According to UN demographers, Indiaspopulation will surpass Chinas by 2040

Three Indian cities amongst the most populous

cities of the world i.e

.Mumbai

, Kolkata andDelhi

India has the worlds largest English-speakingpopulation


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Politics

An era of unstable multi-party and coalition governments began in the late 90s and

has continued since then

An average of26 candidates competed for each of the territorial constituency seats

Caste & Community have been playing a big role in elections until now

2009 elec ions: People have voted for candidates with qualifications/proof of work

rather than manifestoes and community affiliation

Dr. Manmohan Singh Indias current PM


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Economy

A Macro View

India is a $575 billion dollar economy

GDP growth for the year 2007-08 was 7.2%.

GDP expected to grow at a healthy 6.6 - 7% in 2009-10

Corporate Indias PAT expected to grow by 77.3% in 2009-10

Economy is highly dependent on the monsoons as a high proportion

of the population is employed in the agricultural sector


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Economy

A Macro View

Peak import rate has fallen to 20% in 2004 from 150% in 1992

Moodys Investor Service, the credit rating agency, has upgraded India toinvestment grade which has opened the doors for fund managers abroad to

invest in India


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Economy

A Macro View

India said to be on a stronger foundation than China due to democratic styleof government, independent judiciary, transparent banking system and

liberal media


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Economy

Goldman-Sachs Report 2003

Projections for Indian Economy

By 2050, India will become the third largest economy after USA and China

2 3

10

27

0

5

10

15

20

25

30

2011 2020 2025 2032 203 2050

G

P

In

trillion


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Economy

Indian Industry: Taking on the World

The fourth largest pharmaceutical industry in the world growing at 8-10%annually

Fifteen of the world's automobile makers source components from India, anindustry projected to be worth $US 15-20 billion in five years


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Economy

Indian Industry: Taking on the World

India is the largest manufacturer of motorcycles in the world

100 of the Fortune 500 countries are operating in India as compared to 33in China

Indian companies are now becoming truly world-class. For the first time,Indian companies have acquired more than 40 companies in USA, Europe,

Australia and Asia


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Economy

Technology: India takes a BIG BYTE!

Growth in exports of electronic components is 200% over three years

India is one of only three countries to have built a supercomputer (theothers being USA and Japan)

The leading provider of IT and IT-enabled services in the world with world-class companies like TCS, Infosys, Wipro, etc.

Outsourcing firms look at India for growth

The IT industry has looked outwards. Now it is time to look inwards, said

the commerce ministerK

amal Nath


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Economy

India: On the travellers map

India has become the destination for medical tourists for affordable and world-

class medical treatment. e.g. A cataract operation costs $1500 in the USA. It costs$12 in India

Indias tourism industry is also steadily growing from 0.52% in 2006 to 0.55%

in2007 and is now being marketed better e.g Incredible India


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Economy

India: On the CEOs radar

AT Kearney report: India tops the 2004 Offshore Location AttractivenessIndex by a wide margin. Reasons:

Cost advantages Depth & breadth of off-shoring experience

People skills

According to J.P.Morgan, listed Indian firms deliver a higher return on

equity (ROE) than comparable companies in S.E.Asia


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India: Getting connected

Telephony

Total no. of phone connections: 429.72 mn

No. of mobile connections: Above 391.76 mn No. of broadband subscribers base: 6.22 mn

No. of connections growing at nearly 60% a year

(2008-09; Source: Government of India Report, Semiconductor India Report

on Wireless Potential)


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Mobile Telephony: Future Projections


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Internet in Urban India


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Internet

Total no. of users has gone down from 49 million in 2008 to 47 million in2009

About 80 per cent of the users are in the age group of 19-35 yearsSource: IMNAI report 2008


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Internet Penetration

Source: IMNAI report 2008


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Growth in PC Owners & Internet usage



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Growth in PC Owners & Internet usage

Low internet penetration; Big potential for growth


0

00

200

300

India apan China

2000

2008


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Indian Internetizens V/s Rest of World


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Huge market Opportunities

0 20 40 60 80 100

e

icyc e

ectric fanransistor

ressure ooker

Se ing ac ine

o ee er

Refrigeratore evision

e ep one

ar

ractor

% Popul tion O ning Ass t Larger future market

Aroun 40% have ecentstan ar of iving


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Show me the Money!

Money matters

Traditional aversion to debt is on the wane

People are no longer willing to wait seven generations for a better qualityof life - Jairam Ramesh, Congress Cabinet Minister

More and more people are becoming open to the Buy now, Pay laterculture. It is seen in the increase in the disbursement of loans, use of creditcards etc.


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Show me the Money!

Expenditure segments

(Source: NSSO, 1998-99)

010

20

30

40

50

60

70

80

125

Household Annual Expenditure (Rs. '000)

H

ouseholds(mill

ions)


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Huge market Opportunities

Low growth had adverselyaffected consumption

Now consumption is

increasing

Priv C mp i

(Bi i USD )

3

I dia Chi a S. K r a

(Source: World Bank Indicators, 1998)


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New face of India

Times, they are a-changing: Young educated Indians are happy to continueliving in India

There is a new-found confidence and pride in being Indian

Case in point:

Namrata Yadav, 23, working for Daksh, one of Indias largest call centersand BPO firm, says, I wouldnt trade my life here to go abroad


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Media & en er ainmen in India


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Media & Entertainment

According to a Millward Brown Survey, 93% of Indians responded to thestatement I love entertainment with a strongly agree response

Only 79% of those surveyed in China and the USA responded with similar

enthusiasm

Indian ladies performing at

a traditional Dandia Raas,

celebrating Navratras (a

major Indian festival)

New-age Indians enjoy the

Retail Therapy: Malls &

Multiplexes

Night-life in India is as

spirited ass any where else


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Entertainment industry continues to outperform the economy

Growing at 17.49% to an estimated $472.81 billion

Projected to become a Rs. 300 million industry by 2012

Revenues for television to grow at 17%

Over 240 channels are beamed to Indian television viewers PAN-India

Every cable & satellite household receives an average of 100+ channels

(Source: Ernst & Young Study)


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Indian Cinema aka Bollywood

Worlds second largest film industry in the world

Produces over 800 films a year

India has around 12900 cinema halls

Generates over Rs.10000 Crores and providesemployment to Lakhs of people


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Indian Cinema aka Bollywood

Disorganised, fragmented, lack of transparency and corporate governance

Dominated by family-run companies with no access to institutional finance

Finance is tapped from family friends and other sources where interest ratesgo up to 40%

Only in the last few years, Corporates have entered the scene therebyincreasing the share of the organised market


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Serial Bombing: Constant reinvention

From Kyunki Saas Bhi Kabhi Bahu Thi to Balika Vadhu

Then: Kyunki saas with 1830 episodes was, for the longest

period,

the top-grosser daily soap,

aired on Star Plus since the year2000. This hugely popularised Actor Smriti Irani in the Indiantelevision scene

Now:

Balika Vadhu, a daily soap aired on Colors (Viacom Group),

since its launch on 21st July 08, has become a phenomenontoday tops that chart at 10

Chhoti Bahu, another top-grosser soap on Zee, launched on5th Dec 08

Bidaai from the Star Plus stable, the 2nd runner-up


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Entertainment is part of the Indian psyche, and the consumption of variousforms of entertainment is one of your most pleasurable past-times

60% of the Indian population is under 34 and 7 million Indians will enter

the lucrative 20-34 age group every year for the next decade, almost noother country can in the world can make these claims

India, the cornerstone of Disneys Global Strategy.

- Andy Bird, President, Walt Disney


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Only one in 15 households have running water butone in 7 households have cable television

- THE ATLANTA JOURNAL

An urban adult spends an average of 4.9hrs a weekon press, 10hrs a week on radio and the most timei.e. 11.8 hrs on television


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Print: Between the lines

Readership of dailies and periodicals not showingsignificant growth

Losing out to cable television and private dishtelevision (Tata Sky, Dish TV, etc.)

Fastest growing segment in print are the regional

players


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Amongst the top 80 dailies

Avg. readers/copy: 7.1

Max. readers/copy: 19.2 Min. readers/copy: 1.4

Amongst the top 130 magazines:

Avg. readers/copy: 13

Max. readers/copy: 75.2 Min. readers/copy: 1.8


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The top 5 English dailies are:

The Times of India

Mumbai Mirror (Times supplement)

Hindustan Times

The Hindu

The Telegraph

Deccan Chronicle

The Indian Express


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The top 5 English magazines are:

India Today

2. Readers Digest

3. General Knowledge Today

4. Competition Success Review

5.Stardust


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Cricket: A Sport, A Religion

A colonial hangover of three centuries of British rulein India

Cricket: The one religion that unifies India

Cricket stars: Larger than life!

Attracts the biggest marketers from FMCGs toElectronic appliances

Played in every nook and corner of the country


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Indian Adver ising


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A Birds Eye-view

Indian media market will grow only 4.7% year-on-year in 2009, comparedwith 14.7% in 2008

Advertising revenues of newspapers, the biggest segment within the media

industry, will actually see a fall (-2%)

Televisionthe second biggest categorywill grow at a much slower rateof 7%

Digital media and radio are expected to be the front-runners this year,growing at 25% and 15%, respectively, thus enabling the media market toexpand to Rs. 23,755 Crores by this years close

India & China are driving ad spends in the Asia-Pacific region


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Media Spends

(Source: GroupM report 2009)


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Media: YOY %age Change



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Media: %age Shares



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Media: USD M, Net



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Category Growth Estimates



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Category Growth Estimates



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Media Spends: Snapshot

Medium %age of Spends

Newspapers 18%

Magazine 21%

TV 18%

Radio 48%

Outdoor 20%

Digital 91%

Cinema 50%



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Snapshot of TV Advertising during QI 2009

Key Findings

20 per cent rise in TV advertising during the first quarter of2009 compared

to same period in 2008

'F&B' sector had the maximum share of overall TV advertising during the

first quarter of2009

'Social advertisement' was the top category on TV during Jan-Mar '09

'HUL' leads in TV advertising during the first quarter of2009

'LIC Jeevan Varsha' topped the list of new brands advertised on TV duringQ1'09

Source: AdEx India Analysis, May 2009


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Volume of growth of TV Advertising during QI 2009

During the first quarter of2009, TV advertising has seen a rise of20% compared to the same period in2008


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Share of sectors in TV advertising during Jan-Mar '09

Top 10 sectors contributed for 60 per cent share in overall TV advertising during Q1 '09. 'Food &Beverages' sector leads with 17 per cent share. 'Personal care/personal hygiene' and 'telecom/internetservice providers' with 9 per cent and 6 per cent share were at second and third position in the top 10list of sectors on TV during this period


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Contribution of top categories in TV advertising during Q1 '09

During the first quarter of 2009, 31 per cent share was contributed by the top 10 categories. 'Socialadvertisement', 'cellular phone service' and 'aerated soft drink' were the top three categories on TV. Fiveout of the top 10 categories on TV belonged to 'FMCG' sector while two were from the 'auto' sector


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Top Advertisers on TV during Q1 09

'HUL' maintained its first position on TV during the first quarter of 2009 and 2008. Compared to Q1'08, three advertisers - 'Cadburys India Ltd', 'Smithkline Beecham' and 'Procter & Gamble' - hadrecorded a positive shift in their respective ranks to be in the top 10 advertisers list of Q1 '09. 'VodafoneEssar Ltd', which was at the third position during Q1 '08, moved down to the ninth position in the top10 advertisers list of Q1'09


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New brands advertised on TV during Q1'09

'LIC Jeevan Varsha', 'Mahindra Xylo' and '7 Up Natural Lemon Flavour' were the top 3 new brandsadvertised on TV during the 1st quarter of 2009. Top 10 new brand list was a mix of five brands of'FMCG' sector, three of 'auto' sector and two from 'banking/finance/investment' sector


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Agency Rankings: Top 15

1. O&M

2. JWT

3. Lowe

4. Mudra

5. McCann Erickson

6. Rediffusion Y&R7. Leo Burnett

8. Contract

9. RK Swamy BBDO

10. Draft FCB Ulka

11. Grey Worldwide

12. Bates 14113. Saatchi & Saatchi

14. Percept/H

15. Ambience Publicis

(Source: Ad Agency Reckoner 2008, Economic Times)


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Par ing T o g s


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Indias progress is far more impressive than Chinas

- Peter Drucker, management guru

Asian century, Indias decade

- Surjit Bhalla, leading economist


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N

amas e!

india story 2009

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