Comparison between organized and unorganized Indian consumer market:

Today we all are talking about development in our country and government is putting extra effort in this direction. Is effort of Government are in right direction, weather this effort benefiting each citizen .Answer is no, because inequality among the people is increasing, money is accumulating at one pole and also snatching from opposite pole. Rich is becoming more rich and poor is more poor. And this may lead to social disturbance and generally his is known as Revolution. FDI in retail sector may be the cause of next Revolution. Government should reconsider this policy because millions of people depend on the unorganized retail sector. How this would happen? Let me start with simple example, I live in small town kosi kalan of mathura dist. And there are around two thousand of shop & treading firm, in each shop there are two to three people working on an average. These people are generally only source of income of their family and each family consist four to five member. So we can say that twenty to twenty five thousand people depend directly or indirectly on the unorganized retail sector in the town. And there are five to six thousand towns across the country; two to three hundred million people depend on unorganized retail sector for their livelihood. Unorganized retail sector consist shop of various item e.g. Kiryana, stationary, cloth, readymade garment, electronic & electrical item, watch, confectionery and fruit & vegetable etc. Now when retail giants and FDI are allowed, will sell every item 6from pin to car. Then small vendor &shop owner and employee would be deprived from their livelihood. In India average revenue is Rs 74000 per person involved while in Wal-Mart, it is around 7.8 million per person. It means Wal-Mart will take away the job of 100 people and will provide job to one person only, net result 99% person would lose their job. Hundred of sabziwala, fruitwala and kiryana store would be replaced by three or four retail store in each town and their livelihood would be deposited in the account of Ambani & mittal. This can lead to social disturbance. This whole idea may sound, as anti-liberal to economist and policy maker but it may be true according to Indian prospect. These people are saying that it would benefit farmer and will eradicate middlemen. What if Wal-Mart and other giant find it is more profitable to import vegetable, fruit, creels and other food item from other country. Middlemen is cursed in our country, are not they citizen of our country or they do not have right to earn, is only corporate house have privilege to earn? Do we need this type of development in which millions lose their job and few more million bucks would be added in account of some millionaire. Government should not blindly follow U.S., We are different from U.S. culturally, socially, economically. How formulae of success can be same

Impact of organised retailing on the unorganised sector: A review of the study by ICRIER
Developing economies, specifically India, are appearing on the world retail industry radar due to the size and potential of their markets. As organised retail presents enormous business opportunities, big names such as Reliance, Birlas and Tatas along with the foreign supermarket chains (in partnership with Indian companies), have been making an entry into this sector. Fearing loss of business and employment, traders and hawkers have held large-scale protests in various parts of the country. In the light of this, the Ministry of Commerce and Industry commissioned the Indian Council for Research on International Economic Relations (ICRIER) to analyse the impact of organised retailing on unorganised retail, farmers and intermediaries as a possible input to future policy-making.

Characteristics of consumer India :

Characteristics of consumer India By Vinay Wadhokar A Shift From Need Based To Want Based Consumer..

Things are changing :

Things are changing Attitude shift towards consumerism Age structure of population Disposable income Education level Gender bias From Traditional to Modernised traditional

Indian consumer is getting more materialistic :

Indian consumer is getting more materialistic Almost 50% of Indian urban population had adopted work hard and get rich policy by 1996 and another 9% had done so by 2006 Gallop Survey: Indians are more motivated than ever by personal ambition and a desire for material success with an average work-week of 50 hours. India is the hardest working nation globally.

Expected Utility from Products/ Services :

Expected Utility from Products/ Services From Functional to Lifestyle

Consumerism: A way of life :

Consumerism: A way of life Indians desire to set money aside for electronics and durables. Here and Now attitude increasing Travel and entertainment Trend applicable to 15 to 55 age group All

pervasive-urban and rural . 1600% growth in usage of mobile phones.3million subscribers a month.. Advt of designer jewellery , LCD, watches.. BPO - first time market entrants

Comfort with borrowing to fund future consumption :

Comfort with borrowing to fund future consumption Being in debt is no more a discomfort EMI is legitimizing borrowing, making indebtness more acceptable. 60% salaries in EMI EMI makes a lot of sense in borrowing

Foreign is pass ;India is paramount :

Foreign is pass ;India is paramount Made in India has got more credibility Faith in domestic companies have grown up Consumer wants products that are made for Indian needs E.g.: Nokia 1100 ,sunsilk shikakai version Among 20 most respected brands in India 8 are Indian. Indianizing has to do with price levels as well Lifebuoy

Eating habits :
Eating habits From traditional meals to Indianized McDonalds

The rise of Women :

The rise of Women I can and I will!! Influencing to Decisive role in buying decision More eating out , more phone calls Women are changing and reorganizing their household chores Onion paste, ginger paste,etc Ready to eat food

Comfort level with Technology :

Comfort level with Technology InfoTech awareness InfoTech driven employment opportunities Mushrooming of call centers E-choupal Cyber grandma and grandpa!! Washing machines with fuzzy logic.and much more

Some more characteristics :

Some more characteristics High degree of value orientation. Most discerning consumers in the world-Even, luxury brands have to design a unique pricing strategy in order to get a foothold in the Indian market. High degree of family orientation- extends to the extended family and friends as well. Brands with identities that support family values tend to be popular and accepted easily in the Indian market.

Some more characteristics :

Some more characteristics Associated with values of nurturing, care and affection. which communicate feelings and emotions gel with the Indian consumers. Apart from psychology and economics, the role of history and tradition in shaping the Indian consumer behavior is quite unique. For example, hair oils and tooth powder existing with shampoos and toothpaste.

Characteristics of consumer India :

Characteristics of consumer India By Vinay Wadhokar A Shift From Need Based To Want Based Consumer..

Things are changing :

Things are changing Attitude shift towards consumerism Age structure of population Disposable income Education level Gender bias From Traditional to Modernised traditional

Indian consumer is getting more materialistic :

Indian consumer is getting more materialistic Almost 50% of Indian urban population had adopted work hard and get rich policy by 1996 and another 9% had done so by 2006 Gallop Survey: Indians are more motivated than ever by personal ambition and a desire for material success with an average work-week of 50 hours. India is the hardest working nation globally.

Expected Utility from Products/ Services :

Expected Utility from Products/ Services From Functional to Lifestyle

Consumerism: A way of life :

Consumerism: A way of life Indians desire to set money aside for electronics and durables. Here and Now attitude increasing Travel and entertainment Trend applicable to 15 to 55 age group All pervasive-urban and rural . 1600% growth in usage of mobile phones.3million subscribers a month.. Advt of designer jewellery , LCD, watches.. BPO - first time market entrants

Comfort with borrowing to fund future consumption :

Comfort with borrowing to fund future consumption Being in debt is no more a discomfort EMI is legitimizing borrowing, making indebtness more acceptable. 60% salaries in EMI EMI makes a lot of sense in borrowing

Foreign is pass ;India is paramount :

Foreign is pass ;India is paramount Made in India has got more credibility Faith in domestic companies have grown up Consumer wants products that are made for Indian needs E.g.: Nokia 1100 ,sunsilk shikakai version Among 20 most respected brands in India 8 are Indian. Indianizing has to do with price levels as well Lifebuoy

Eating habits :
Eating habits From traditional meals to Indianized McDonalds

The rise of Women :

The rise of Women I can and I will!! Influencing to Decisive role in buying decision More eating out , more phone calls Women are changing and reorganizing their household chores Onion paste, ginger paste,etc Ready to eat food

Comfort level with Technology :

Comfort level with Technology InfoTech awareness InfoTech driven employment opportunities Mushrooming of call centers E-choupal Cyber grandma and grandpa!! Washing machines with fuzzy logic.and much more

Some more characteristics :

Some more characteristics High degree of value orientation. Most discerning consumers in the world-Even, luxury brands have to design a unique pricing strategy in order to get a foothold in the Indian market. High degree of family orientation- extends to the extended family and friends as well. Brands with identities that support family values tend to be popular and accepted easily in the Indian market.

Some more characteristics :

Some more characteristics Associated with values of nurturing, care and affection. which communicate feelings and emotions gel with the Indian consumers. Apart from psychology and economics, the role of history and tradition in shaping the Indian consumer behavior is quite unique. For example, hair oils and tooth powder existing with shampoos and toothpaste.

Consumer Markets
India is currently the twelfth largest consumer market in the world. According to a study by McKinsey Global Institute, India is likely to join the premier league of the worlds consumer market by 2025 improving its position to the fifth. Aggregate consumption in India is expected to grow four-fold in real terms during the period, 2006-2025 to touch US$ 1.73 trillion from US$ 420.7 billion. Also, by then, the middle class will have grown almost 12 times, from 50 million in 2006 to 583 million in 2025. Over 23 million Indiansmore than the population of Australiawill number among the countrys wealthiest citizens. FMCG India's fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy. The total FMCG market is in excess of US$ 17.36 billion and is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. . The Indian FMCG industry grew by 22% in 2006. Of the total sales, food (43%) and personal care (22%) are the largest categories. The fact that the per capita income has nearly doubled in a short span of four years to just under US$ 800 in 2006-07 (from around US$ 450 in 2002-03), has boosted the growth of FMCG companies.The top 10 FMCG companies clocked net sales and net profit growth of 19 per cent for the quarter ended March 2007, compared with the corresponding period for the previous year. The prospect for further growth in this segment is robust as in many category of commodities the market penetration levels of the organised sector is still low. These commodities include instant coffee (6.6 per cent), deodorants (2.1 per cent), skin creams (22 per cent) and utensil cleaners (28 per cent). Consumer Durables A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing has been instrumental in changing the pattern of consumer expenditure. The consumer durables industry, which includes white goods, televisions, VCD and DVD players, and audio systems, has been one of the segments to experience increased demand.
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The microwave oven industry (worth US$ 173.35 million) grew at a robust rate of 48.5%, with the solo category increasing 22%, grill model increasing 36% and convection model growing at 71% over the last year. The fully automatic washing machines market grew at the rate of 40% while the semiautomatic market rose by 19% in the first quarter of 2007.

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Refrigerators sales rose by 10.7% in value terms and 6.7% in volume terms to touch US$ 936.2 million and 3.75 million units respectively in 2006-07. Air conditioners sales grew by 50% in value terms to US$ 494.5 million and 51.6% in volume terms (1.05 million) in 2006-07. Frost-free refrigerators clocked an unprecedented growth of 50 per cent this summer compared with the previous year.

Consumer Electronics The consumer electronics sector is estimated to grow at the rate of 11 per cent, achieving a production level of US$ 4.95 billion during 2006-07 compared with US$ 4.45 billion in 2005-06. The fast growing segments during the year were colour TVs, DVD players and home theatre systems.
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Colour TV (CTV) production has shot up to over 12 million units during the year 200607. The flat CTV segment now accounts for over 50 per cent of the total domestic TV production. Personal computer (PC) sales are expected to cross 6.5 million units during the year 2006-07. The India client PC market witnessed a 20 per cent year-on-year growth in unit shipments, with the total installed base of PCs in India crossing 22 million during 200607. Sales of TVs are growing by an estimated 13-15%. Sales of home theatres have been growing at the rate of 80 -90% a year. Mobile handset production is expected to grow to over 51 million units this year against 31 million in 2006 to record the highest growth in the Asia-Pacific region, technology research firm Gartner has predicted.

iSuppli, a electronics market research firm, predicts that the Indian audio/video consumer electronics industry will grow to US$ 6.59 billion by 2011, rising at a Compound Annual Growth Rate (CAGR) of 10% from US$ 4.5 billion in 2007. Automobiles The Indian auto industry, worth US$ 34 billion in 2006, has grown at a CAGR of 14% over the last five years with total domestic sales of vehicles reaching around 10.1 million vehicles in 2006-07. Presently, India is the second largest two-wheeler market in the world, the fourth largest commercial vehicle market, the 11th largest passenger car market in the world, and is expected to be the seventh largest by 2016. Credit Cards Currently, the number of credit and debit cards in circulation is close to 26 million and 60 million, respectively. The total transaction on the cards as a whole during the year is said to be close to US$ 30.93 billion. India has become the largest market for VISA debit and pre-paid cards in Asia-Pacific with about 33.9 million card-holders in 2006, accounting for about 3% of the company's total customer-base. Even in terms of total transaction, India is among the top three destinations in the region, accounting for about 62 per cent of the total debit and prepaid card transactions.

E-commerce Thanks to the broadband revolution, more Indians are spending ever more on the web. On last count, 10.8 million Indians, or 43% of the countrys total internet population, bought online. This is 76 per cent more than the number a year ago. The e-commerce market is estimated to grow at 150 per cent to touch US$ 1.36 billion in 2007-08 from US$ 544 million in 2006-07.While the top ten cities account for 45 per cent of the overall shoppers base, urban uptowns, emerging uptowns and other towns account for the rest. Real Estate Mortgage In 1995, just 2.6 million urban households in India could afford a mortgage. After eight years of rapid economic expansion, that number had rocketed to 20.5 million -- a CAGR of 29.4%. In the last fiscal, 2006-07, many banks continued to show robust loan disbursements. The home loan disbursements of public sector banks grew by over 21%, with the total amount outstanding touching US$ 33.42 billion during 2006-07 as against US$ 27.62 billion in 2005-06. SBI had reported growth of around 18% in 2006-07.The ICICI bank's home loan portfolio on March 31, 2007, was around US$ 15.71 billion, constituting 30 per cent of its total advances. Consumer Confidence The Indian consumer remains the most upbeat globally. According to the AC Nielson Consumer Confidence and Opinion Survey, India tops both the 47-nation global survey and the 14-country Asia Pacific study for the fifth time in a row. Also the perception of Indians regarding their personal finances (90 per cent optimistic) and job prospects (94 per cent optimistic) is robust. The Indian middle-class, which is the backbone of the India market story, comprises 56 million people in households earning US$ 4,400-21,800 a year. The upper middle and high-income urban households are estimated to grow to 38.2 million in 2007 from 14.6 million in 2000, according to the National Council for Applied Economic Research (NCAER). With the population of high net worth individuals crossing 1,00,000 this year, the prospect for luxury goods market is also bright and is estimated to touch US$ 452 million in coming years.