THE INDIA STORY

SCRIPTING A BRIGHTER FUTURE

Outline

India overview

Media & entertainment in India

Indian advertising industry

India Overview
The Great Indian Diversity

• 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
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 out

geographically

• A high concentration exists in urban centres

India: Eclectic Mix

Projected Population

1500 1179 1264

Population (in millions)

1027
1000

500

0
2001 2011 2016

Year

(Source: National Commission on Population Government of India)

Demographics

• India still has population %Population Poverty Line

around 28% in the rural areas 50
45
40
• 26% in the urban areas living
35
under the national poverty line 30
25
20
15
10
5
(Source: World Bank Indicators, 0
2008)
India China
Demographics

• Literacy is low, however US & UK

increasing at a good pace. The
total adult literacy rate in India
was 66% in 2007 Brazil

• Most developed countries have China

close to 100% literacy

India

(Source: UNICEF- India stats 2008)

0 20 40 60 80 100
Demographics

A new India, a young India

(Source: UNICEF- India stats 2008)

Demographics

Population Distribution

below 6yrs
7 to 14yrs
15 to 59yrs
60+

(Source: UNICEF- India stats 2008)

Demographics

Population Distribution

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

to information technology,
international brands and cartoons

• Discoverers (6 - 14yrs): discovering

new fashion, brands, status and
lifestyle
Demographics

Population Distribution

• Career seekers and Home makers

(15 - 59yrs): eager to channelise
their energies 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
Demographics

Population Characteristics

• Over 50% of India’s population is below 25

forming one of the world’s youngest
populations

• According to UN demographers, India’s

population will surpass China’s by 2040

• Three Indian cities amongst the most populous

cities of the world i.e. Mumbai, Kolkata and
Delhi

• India has the world’s largest English-speaking

population
Politics

Jawaharlal Nehru – India’s first prime Minister

• India: The world’s largest democracy

• The largest number of political parties

• Political scene dominated by the Congress Party for over 50 years

Politics

Dr. Manmohan Singh – India’s current

PM
• An era of unstable multi-party and coalition governments began in the late 90’s
and has continued since then

• An average of 26 candidates competed for each of the territorial constituency

seats

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

• 2009 elections: People have voted for candidates with qualifications/proof of

work rather than manifestoes and community affiliation
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 India’s 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
Economy

A Macro View

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

• Moody’s Investor Service, the credit rating agency, has upgraded India
to investment grade which has opened the doors for fund managers
abroad to invest in India
Economy

A Macro View

• India said to be on a stronger foundation than China due to

democratic style of government, independent judiciary, transparent
banking system and liberal media
Economy

Goldman-Sachs Report 2003

Projections for Indian Economy

30 27
GDP (In $t rillion)

25
20
15 10
10 6
2 3
5 1
0
2011 2020 2025 2032 2038 2050

By 2050, India will become the third largest economy after USA and
China
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, an industry projected to be worth $US 15-20 billion in five
years
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 33 in 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
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 (the

others 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 minister Kamal Nath
Economy

India: On the traveller’s 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

• India’s 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
Economy

India: On the CEO’s radar

• AT Kearney report: India tops the “2004 Offshore Location

Attractiveness Index” 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
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)
India: Getting connected

Mobile Telephony: Future Projections

India: Getting connected

Internet in Urban India

India: Getting connected

Internet

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

million in 2009

• About 80 per cent of the users are in the age group of 19-35 years
Source: IMNAI
report 2008
India: Getting connected

Internet Penetration

Source: IMNAI report 2008

India: Getting connected

Growth in PC Owners & Internet usage

Source: IMNAI report 2008

India: Getting connected

Growth in PC Owners & Internet usage

300
200
2000
100
2008
0
India Japan China

Low internet penetration; Big potential for growth

Source: IMNAI report 2008
India: Getting connected

Indian ‘Internetizens’ V/s Rest of World

 Huge market Opportunities

%Population Owning Asset • Larger future market

Tractor
Car • Around 40% have decent
Telephone standard of living
Television
Refrigerator
Two Wheeler
Sewing Machine
Pressure Cooker
Transistor
Electric fan
Bicycle
Bed

0 20 40 60 80 100
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

quality of life” - Jairam Ramesh, Congress Cabinet Minister

• More and more people are becoming open to the “Buy now, Pay
later” culture. It is seen in the increase in the disbursement of loans,
use of credit cards etc.
Show me the Money!

Expenditure segments
80
70
Households (millions)

60
50
40
30
20
10
0
<30 30 - 60 60 - 96 96 - 125 >125

Household Annual Expenditure (Rs. '000)

(Source: NSSO, 1998-99)
Huge market Opportunities

Private Consumption
• Low growth had adversely
(Billion USDs)
affected consumption

• Now consumption is 400

increasing
300

200

100
1990 1995 2000
India China S. Korea

(Source: World Bank Indicators, 1998)

New face of India

• Times, they are a-changing: Young educated Indians are happy to

continue living in India

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

Case in point:
Namrata Yadav, 23, working for Daksh, one of India’s largest call
centers and BPO firm, says, “I wouldn’t trade my life here to go
abroad”
Media & entertainment in India
Media & Entertainment

• According to a Millward Brown Survey, 93% of Indians responded

to the statement “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 New-age Indians enjoy Night-life in India is as

at a traditional Dandia the Retail Therapy: spirited ass any where
Raas, celebrating Malls & Multiplexes else
Navratras (a major
Indian festival)
Media & Entertainment

• 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)

Media & Entertainment

Indian Cinema aka Bollywood

• World’s 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 provides

employment to Lakhs of people
Media & Entertainment

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 rates go up to 40%

• Only in the last few years, Corporates have entered the scene
thereby increasing the share of the organised market
Media & Entertainment

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 year 2000. This hugely popularised Actor Smriti
Irani in the Indian television scene

• Now:
– “Balika Vadhu”, a daily soap aired on Colors (Viacom
Group), since its launch on 21st July 08, has become a
phenomenon today – tops that chart at 10
– “Chhoti Bahu”, another top-grosser soap on Zee,
launched on 5th Dec 08
– “Bidaai” from the Star Plus stable, the 2nd runner-up
Media & Entertainment

• “Entertainment is part of the Indian psyche, and the consumption of

various forms 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 no other country can in the world can make these claims”

• “India, the cornerstone of Disney’s Global Strategy.”

- Andy Bird, President, Walt Disney
Media & Entertainment

• Only one in 15 households have running water

but one in 7 households have cable television
- THE ATLANTA JOURNAL

• An urban adult spends an average of 4.9hrs a

week on press, 10hrs a week on radio and the
most time i.e. 11.8 hrs on television
Media & Entertainment

Print: Between the lines

• Readership of dailies and periodicals not

showing significant growth

• Losing out to cable television and private

dish television (Tata Sky, Dish TV, etc.)

• Fastest growing segment in print are the

regional players
Media & Entertainment

Print: Between the lines

• 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
Media & Entertainment

Print: Between the lines

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
Media & Entertainment

Print: Between the lines

The top 5 English magazines are:

• India Today
• 2. Reader’s Digest
• 3. General Knowledge Today
• 4. Competition Success Review
• 5. Stardust
Media & Entertainment

Cricket: A Sport, A Religion

• A colonial hangover of three centuries of British

rule in India

• Cricket: The one religion that unifies India

• Cricket stars: Larger than life!

• Attracts the biggest marketers from FMCGs to

Electronic appliances

• Played in every nook and corner of the country

Indian Advertising
A Bird’s Eye-view

• Indian media market will grow only 4.7% year-on-year in 2009,

compared with 14.7% in 2008

• Advertising revenues of newspapers, the biggest segment within the

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

• Television—the second biggest category—will grow at a much

slower rate of 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 to expand to Rs. 23,755 Crores by this year’s close

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

Media Spends

(Source: GroupM report 2009)

Media: YOY %age Change

(Source: GroupM report 2009)

Media: %age Shares

(Source: GroupM report 2009)

Media: USD M, Net

(Source: GroupM report 2009)

Category Growth Estimates

(Source: GroupM report 2009)

Category Growth Estimates

(Source: GroupM report 2009)

Media Spends: Snapshot

Medium %age of
Spends

• Newspapers 18%
• Magazine 21%
• TV 18%
• Radio 48%
• Outdoor 20%
• Digital 91%
• Cinema 50%

(Source: GroupM report 2009)

Snapshot of TV Advertising during QI 2009

Key Findings

• 20 per cent rise in TV advertising during the first quarter of 2009

compared to same period in 2008
• 'F&B' sector had the maximum share of overall TV advertising
during the first quarter of 2009
• 'Social advertisement' was the top category on TV during Jan-Mar
'09
• 'HUL' leads in TV advertising during the first quarter of 2009
• 'LIC Jeevan Varsha' topped the list of new brands advertised on TV
during Q1'09
Source: AdEx India Analysis, May 2009
Volume of growth of TV Advertising during QI 2009

• During the first quarter of 2009, TV advertising has seen a rise of 20% compared to the same
period in 2008
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/internet service providers' with 9 per cent and 6 per cent share were at second and
third position in the top 10 list of sectors on TV during this period
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.
'Social advertisement', 'cellular phone service' and 'aerated soft drink' were the top three
categories on TV. Five out of the top 10 categories on TV belonged to 'FMCG' sector while
two were from the 'auto' sector
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' - had recorded a positive shift in their respective ranks to be in the top 10 advertisers
list of Q1 '09. 'Vodafone Essar Ltd', which was at the third position during Q1 '08, moved
down to the ninth position in the top 10 advertisers list of Q1'09
New brands advertised on TV during Q1'09

• 'LIC Jeevan Varsha', 'Mahindra Xylo' and '7 Up Natural Lemon Flavour' were the top 3 new
brands advertised 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
Agency Rankings: Top 15

1. O&M
2. JWT
3. Lowe
4. Mudra
5. McCann Erickson
6. Rediffusion Y&R
7. Leo Burnett
8. Contract
9. RK Swamy BBDO
10. Draft FCB Ulka
11. Grey Worldwide
12. Bates 141
13. Saatchi & Saatchi
14. Percept/H
15. Ambience Publicis
(Source: Ad Agency Reckoner 2008, Economic Times)
Parting Thoughts…
• “India’s progress is far more impressive than China’s”
- Peter Drucker, management guru

• “Asian century, India’s decade”

- Surjit Bhalla, leading economist
Namaste!