1 10 10 India a Growth Opportunity James Randall

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India – a huge opportunity for Growth James Randall – Tokyo October 2010



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GfK Retail and Technology India A Growth Opportunity, James Randall October 2010

India, diversity in numbers:1,156,897,766 Population

82% Hindu, 12% Muslim, 2% Christian,2% Sikh and 1.5% Buddhist

16 Official Languages & 1,650 Dialects

75% rural in 615,000 villages

27 States, 4,378 towns35 Metro Cities 1m+ population

39 Towns 0.5m – 1m population

320 Towns 100 – 500k population

3,984 Towns up to 100k population

Source: GfK nielsen India and Government of India Census

49% 14% 18% 20%

Metros 0.5m - 1m pop 100 - 500k pop up to 100k pop

Retail Share:



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Exploding population:Predicted to be the largest population in the world by 2026 at 1,471,000,000…

Over 50% of the population is below 25 years of age

Population+ 19m a year

Source: National Population Stabilisation fund

0 – 14 yrs 19% 31%

15 – 64 yrs 60% 64%

65+ 21% 5%

Fastest growing working age population

in 2020 average Indian will be 29yrs (v 37 yrs in China)



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2009 GDP (current prices IMF 2009):

$14,256bn $4,908bn $5,068bn $1,235bn $3,352bn

Source: IMF and Indian PM’s Economic Advisory Council Forecast

The fastest growing population…. :Experiencing rapid growth but with a very low GDP Per Capita …

9.7% 9.2% 6.7% 7.2% 8.2% 9.0%

2006 - 07 '07 - 08 '08 - 09 '09 - 10* '10 - 11* '11 - 12*

Indian GDP

2009 GDP Nominal Per Capita:

$46,381 $3,678 $39,731 $1,031 $40,875

Value of final goods & services produced by nation in a year, converted marketexch rate to US$divided by the average (or mid-year)



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Growing middle classes become world’s 5th consumer group:In 2 decades will grow from 5% to 40%, their incomes will balloon to $1.1bn (x11) …

The Classes 1990 2000 2008-09

Source: National Council of Applied Economic Research (Household in mn.)

1 3 7

29 55 85

48 9066

48 32 32

35 24 15

Rich(US$ +5,000 p.a.)

Consuming(US$ 1200 – 5000 p.a.)

Climbers(US$ 500 – 1200 p.a.)

Aspirants(US$ +350 - 500 p.a.)

Destitute(US$ < 350)

Between 2000 & 2009 Rich & consuming grew by 59% or 34m HOUSEHOLDS!

The next 10 years could see 55mextra consuming households (2x UK)



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2010 = huge market growth rates in India:

Source: GfK nielsen India retail sales

87%

37% 37% 35%

20%

14% 12% 12%

ategory: LCD/Plasma Mobile AC Notebook DSC Refrigeration WM Microwave

millions units) 3m 139m 4m 3m 2m 8m 4m 1m



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Low Penetration of Products & Growing Middle Class:

TV & Mobile Phone Cross Class & Rural Divide

3.0%

7.0%

19.0%

55.0%

55.0%

Penetration

Rural Share:

10%

31%

6%

8%

2%

As Indians become Middle Class they expect:

Refrigerator, Washing Machine, Air Conditioner and a PC




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New Customer in India in the next decade:Mobile Penetration reaches 85%, TV 75% H.H. and 147m Consuming Households by 2020

10 3

11 3

22 0

223

36 6

New Customers in Millions




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Exploiting the Market Opportunity:

Korean Brands, well established & manufacture in India

LCD Brand Share by country Jan 2010:

49 3810

Aug 2010: 615 3D TVs sold



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India: a growth opportunity ?Summary:

Population grows by 19m people a year (approx size of Australia or NL)

1.2bn people in 4,378 towns and 610k villages (50% sales in Metros)

50% of Indian Population is under 25......

Indian Middle Class set to grow by 55m Households in 10 years

Indian Middle Class forecast to become world‘s 5th consumer group

Low penetration provide double digit growth rates for years to come

Masses of opportunity for new entrants



India – a huge opportunity for Growth James Randall – Tokyo October 2010

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1 10 10 India a Growth Opportunity James Randall