IMB Book 2015 file

FEBRUARY 2016Vol 1

Editor’s Note

I am delighted to launch the year ender coffee table

book. Our purpose is to provide a journal that

offers a multi-disciplinary analysis across major

industries such as Television, Advertising, Radio,

Cable/DTH, Digital Advertising etc.

The booklet will strive to combine excellence with

professional relevance and a strong industry focus.

We wish to appeal to the professional, corporate,

governmental, non-governmental and various other

communities. The purpose of the booklet is to fill

the gap between the perspective and the approach

of various disciplines impacting the industries.

It is our aim to address the geographical scope

and diversities, to encompass the worldwide

community of professionals. We have tried to get

across the industry trends foreseen by industry

experts for the year 2016.

We hope the book serves its purpose.

Thanks,

Ayesha Siddiqua

Licensing processes for

HITS needs to be

streamlined and eased by

the government:

he 2015 witnessed two major challenges. The first

was streamlining the process followed by bringing about

transparency in the system. As a responsible industry

player we tried implementing the same and got several

new processes and procedures in place. We also

redefined the roles of human resources in the

organizational setup keeping in mind the objectives of

digitalization.

Another initiative was to introduce the best packaging

and bundling so as to meet the needs of customers across

categories and places. For instance, in a city like Mumbai

there is no uniformity in customer profile across, so it is

essential to understand the end users, their earnings and

affordability so as to offer packages accordingly.

The choice of channels may also differ and therefore the

operators too face a dilemma. The pricing decision is

thus best left directly to the LCOs to decide on product

pricing.

Tony D’Silva

FEBRUARY 2016 INDIAN MEDIA BOOK

Tony D’Silva, Managing Director, Grant Investrade, a Hinduja

Media subsidiary

T

1

The government had silently confirmed 31st of

December as the deadline of phase III. Now, in my view,

there was a need to be firm and quickly reveal its plans.

This would have distanced the operators from guessing

the way forward and avoiding all possible delays in the

implementation.

On the HITS front, it has been a difficult year but we have culminated the two and a half

year’s struggle to get our license. I think that the process from the respective government

body’s side should be streamlined and direct in its approach so as to make it faster.

I believe that India can become a highly competitive

market for the world. We do have the potential to become

a world class country, where we can compete with

everyone across the world. We have the capability,

infrastructure, man power, intelligence. However we are

not being able to support it, reason being we do not

understand the business. For this purpose, we definitely

need to have a broadcaster authority; consisting of

representatives who know what they are talking about.

In 2016, we look forward to moving to an external perspective from an internal perspective.

We plan to consolidate our businesses, grow them and establish ourselves as serious player

in carriage and platform business.

In 2015, we’ve launched our services successfully and have got extremely good responses.

We’ve signed every single broadcaster and some broadcasters who realize the importance

of hits have been extremely supportive.

My message to cable TV operator fraternity is that HITS is a unique business and it clearly

offers them a road map to continue to be the owner of their business. From that point of

view, they should not look at short term gain, there are a lot of operators in the country who

offering set-top boxes at almost half the price. Cable TV operator should understand that

revenue is not coming from set-top boxes. The revenue lies in monetisation, so they should

go for a quality box, offer quality service and work towards customer satisfaction which

will take them a long way.

FEBRUARY 2016 INDIAN MEDIA BOOK2

In July 2015, Indian Government under the leadership of

Prime Minister Narendra Modi initiated Digital India

campaign, aiming to empower Indian citizens with the

power of digital. The campaign’s goal was to provide

broadband highways, universal access to mobile

connectivity, public internet access programme, e-

governance and reforming government through

technology.

WHATDigital advertising is picking up at a great pace and

brands have been relying on it big time. Over the years,

the very definition of the term, digital, has changed

drastically. What does digital mean in India now?

PwC's Matthew Hobbs, Partner, Entertainment & Media,

mentioned in his report that total Global Internet

advertising revenue is forecasted to grow from US$135.42 billion in 2014 to US$239.87

billion in 2019, a CAGR over the period of 12.1 per cent. As the segment captures an ever-

larger portion of advertising budgets, it will exceed TV to become the largest single

advertising category by 2019.

On the other side, according to Carat Advertising Spend Forecast September 2015, digital

media spend is predicted at double digit growth levels of +15.7 per cent in 2015 and +14.3

per cent in 2016, while the Indian advertising market is buoyant as growth prospects in the

country remain high at +11 per cent in 2015 and +12 per cent in 2016.

IndianMediaBook takes a look at the highs and lows of the digital industry in 2015.

EVOLUTION OF A DIGITAL INDIA

?INDIA NOW DOES DIGITAL MEAN IN

Speaking about the initiative, Charulata Ravikumar, CEO, Razorfish India, said, “Make In

India push by the Government is encouraging many Silicon Valley entrepreneurs to start

manufacturing and ideate ventures in India, this will further push the return of talent to

homeland. These entrepreneurs will seek out professional marketing/communication help

specially those who understand India from its heart and are able to transform businesses for

the times ahead.”


Aimed at connecting rural areas with high-speed internet

networks, the Digital India initiative has three core

components such as the creation of digital infrastructure,

delivering services digitally and digital literacy.

According to BCG ‘Shaping the Industry at a Time of

Disruption’ report, there are 250 Million digital

consumers today in India, the number is expected to

shoot up to 600 Million by 2020.

ACTION PACKED 2015According to a study by Internet and Mobile Association of India (IAMAI) in association

with IMRB International, the online advertising market in India touched Rs 3,575 Crore by

March 2015, a 30 per cent rise from Rs 2,750 Crore in March 2014.

Ravikumar opined that the permeation of technology touching every life in one way or the

other has only enhanced opportunities.

But, with these opportunities, emerges the need for brands to become more responsible,

transparent and for digital communication to enable them to be more useful.

“Key sectors such as FMCG, automobile and BFSI have seen growth resulting in the digital

advertising industry stabilizing and even growing in 2015 by 13 per cent,” commented

Ravikumar.

Pratik Gupta, Co-Founder & Director, New Business & Innovations, FoxyMoron found

2015 as an action packed year.

It took years for TV to emerge as the strongest medium, but now internet and small screens

seem to be taking the lead. This marked a change in the way consumers, brands and

agencies not function.

“The digital footprint expanded exponentially this year.

From traditional shop keepers coming up with a website

to the street smart businessmen selling stuff on

WhatsApp, we’re seeing the roots of digital marketing

going deeper and stronger,” added Gupta.

It was a game changing year as various new platforms

such as Instagram, Snapchat and Vine stepped up,

creating a wave of new possibilities for brands. The year

2015 also marked the shift in axioms of idea-powering

activities across paid, owned and earned channels.


“Ideas motivated consumers to action and

create a competitive durable advantage for

those marketers who understand what lies

at the centre of a buzzword-driven

marketplace,” expressed Zafar Rais –

CEO, MindShift Interactive.

Ravikumar also mentioned that digital

growth within this year was at about 10 per

cent over 2014 and was due to challenges

in reach and inadequate infrastructure.

But now, digital industry has begun taking

its run up for the big leap ahead.

NEXT CURVE INDIGITAL MARKETING

Rais informed IndianMediaBook that

marketing automation gained stronger

interest in 2015. More brands got involved

in technology investment discussions with

their IT and analytics teams. Marketing

technologies such as Adobe Analytics,

Marketo, and Gigya observed higher

i n v e s t m e n t a n d a l s o b r o a d e r

understanding and usage across clients.

While total ad spend forecast in 2015 was

at Euros 700 million, the digital spends

were pegged at 9.5 % of above.

With mobile ownership this is expected to

touch 975 million and smartphone

ownership tipping from a current 150

million to 651 million by 2018.

However, according to ZenithOptimedia’s

Advertising Expenditure Forecast Report,

in 2018 mobile advertising is expected to

overtake desktop and account for

50.2 % of all internet advertising.

“Brands are finally beginning to invest in

making their digital marketing strategies

more intelligent and insightful, something

that will be seen to a larger extent in 2016

with more insightful campaigns releasing,

and heavier budgets being allocated to get

it first time right,” added Rais.

The report also predicts that Programmatic

advertising will account for more than half

of digital display advertising 53 % and will

increase its shares to 60 % in 2016. Thus,

Programmatic advertising is forecasted to

grow another 34 % in 2016 an 26 % in

2017.

On the other side, as per PwC, display

Internet advertising revenue was the

second-largest component of Internet

advertising revenue in 2014 and maintains

a solid 7.9 % CAGR to 2019. Yet mobile

Internet advertising revenue’s rapid

growth of 23.1 % CAGR means that it will

overtake display by the end of the forecast

period.


THE SOCIAL SCENE Nowadays, social media is beyond,

marketing, helping improve department’s

right from Human Resources, Logistics to

Business Development.

“Content has taken new turns. While story

telling has been closely related to social

media over the past few years, visual and

video story telling formats picked up pace,

with brands creating long and short form

content to cater to various demographics,”

expressed Zafar Rais.

Social media advertising went to new

levels - right from Facebook going beyond

the number of fans to focusing on

engagements and lead generation

capabilities, Twitter opened up its

advertising options keeping conservative

budgets in mind.

“Socialing, or the act of brands going

beyond merely socializing to social

interweaving will be considered more

seriously by brands and each must build its

capability in this quickly,” commented

Ravikumar.

Gupta on the other hand expressed that

while video ads are certainly not new, due

to the fact that it is owned by Google, the

possibilities are virtually limitless,

“This will most definitely dominate digital

in the coming year as apart from YouTube

which already hosts billions of videos,

advertising platforms like Facebook and

Bing will now offer advertisers video

options. Thus, we should expect to see

more types of video ads popping up in

more unexpected places,” commented

Pratik.

Other big players such as Instagram,

SnapChat, LinkedIn have worked on

creating lucrative routes of advertising as

well. While there are questions on the

organic impact and use of influencers

versus advertising, both play different

roles and shall continue to do so.

Instagram played an important role here

with the introduction of 3 applications in

the year that helped users and brands tell

their story in more than just a click. This is

t h e b e g i n n i n g o f m o r e v i s u a l

communication tools and features that will

see a rise in 2016.

“Interaction on social media as well will

create an engaging mobile friendly view.

Wearable Content innovation will win and

brands trying telling stories through stock

photos will gradually die, while brands

that invest in real photos and videos will

win over engagements and appreciation,

expressed Rais.


The various facts and figures point out at

digital’s great future. Due to the action

packed powerful performance of 2015,

higher expectations from 2016 are

foreseen. Recently, ZenithOptimedia’s

Report estimates global ad expenditure to

grow by 4.7 % in 2016, reaching $ 579

billion by end of the year.

Ravikumar shares that 2016 may well

remain a year of patience, perseverance

and a test for survival of the fittest and the

fastest in this new digital age. More brands

will use augmented reality and wearable

technologies in 2016, bringing online and

offline experience together. And last but

not the least, the popularity of visual

storytelling will continue unabated in the

upcoming year.

According to Rais growing trend of Online

Advertising is expected to grow by 10 % at

a global rate. With the rise in mobile

advertising, online ad expenditure will see

a rise through the year and the next.

Global mobile advertising market will hit

two significant milestones in 2016;

according to new figures from eMarketer,

surpassing $100 billion in spending and

accounting for more than 50 % of all

digital ad expenditure for the first time.

“With the backlash of social media and

with a heavy reliance of brands on

celebrities coupled with the increased

l ega l p re s su re s on ambassador

endorsements, digital consumers and

micro influencers will start playing a

significant role for brands. And companies

should invest in this right away,

commented Ravikumar.

While, Gupta believes that various digital

mediums such as Location Specific Ads,

Real Time Bidding, Video Ads –

everything saw their share of changes in

2015 and triggered an ignition for changes

expected in 2016.

“Application indexing will lead to an

explosion of applications. As the ranking

possibilities for applications become more

complex, 2016 will be the year when every

business owner realizes the online

visibility advantages of a dedicated

application,” expressed Gupta.

Concluding his thoughts, Zafar Rais,

mentioned that all-inclusive Social

experience – Social Media sites are

investing in keeping the consumers glued

on to their portal by providing everything

right there. Facebook’s search engine will

allow further visibility to brands, given it’s

predicted to go beyond the way you search

on Google or Yahoo.

“There is an expectation of better

consumer spends, likely to spread now to

Tier 3 towns as well and provide improved

healthcare to the masses. Inflation,

however remains a challenge with the

consumer still in constant contemplation

of Spend vs Save,” concluded Ravikuar.

EXPECTATIONS 2016


BLURING TRADITIONAL

BOUNDARIESEarly this year, global media investment group

GroupM mentioned in its This Year, Next Year report

that advertising spends in India will grow 12.6 % to

touch INR 49,000 Crore.

Likewise, according to Carat Ad Spend Report growth

prospects remain high in India, with advertising spend

estimated to grow by +11 % in 2015 and by +12 % by

2016.

2015: A WALKTHROUGH THE MEMORY LANE

Amer Jaleel, Chairman & CCO, Mullen Lintas, believes

that we are still in the phase of inequality of media, which

means an OKish idea pushed with enough money in a

powerful medium will win over a superior

communication thought just because the weight wasn't

behind it.

While there were path-breaking campaigns such as

Nescafe’s cartoonist ad and the Mauka Mauka series –

Indian ad industry also witnessed a lag with stereotypical

brand pushing campaigns.

Leading broadcasters have been strictly following the 10+2 Ad Cap which was bound to

impact creativity and ad quality.

As a result, brands were seen moving to digital mediums, where the opportunity to

showcase ad films for longer durations was persistent. Start-up brands such as TrulyMadly,

Oyo Rooms, and Urban Ladder leveraged branded content trend with short films, as

opposed to mainstream TVCs.

Indian Media Book takes stock of the Indian ad industry.

“Online medium however, saw many more experimental formats being developed such as

stand ups, music videos etc. I guess there is a clear movement towards more and more

creative happening on the net than on mainline. Yet, there is a long way to go. We still are

using online primarily to do longer duration of the same TV ad,” expressed Priti Nair,

Co-Founder, Curry Nation.


In 2015, design thinking has been recognised as a force

to reckon with like never before. Wipro acquired a large

European design consulting firm, Infosys started giving

great emphasis on design thinking, every start-up

incubation initiative insists on design intervention as part

of the mentoring process. All these and more such

examples are becoming the new norm.

Commenting on the growth of Design industry, Ashwini

Despande, Co-Founder, Director, Elephant Design, said

“Design consulting industry has had a fantastic year. I

would peg the growth at 20 per cent or more on an

average. This is quite the opposite of how design

businesses are doing across Europe and some of the

developed Asian economies.”

Despande further commented that it has been a very vibrant and dynamic year, as speed of

synthesis and analysis for building a brand is being challenged by the start-ups.

“More and more businesses are looking at branding as an evolutionary process rather than

being obsessed about the fallacy of getting it right the first time. Progressive business

leaders are acknowledging design as a tool of differentiation,” added Despande.

BLURRY RESULTS There is no doubt that 2015 was an exciting year, but somehow it’s failed to impress the

lady who named 2014 as Advertising Ka Sarkaar. We are talking about Priti Nair,

Co-Founder, Curry Nation’s Priti Nair who believes that 2015 was slow and more or

less stagnant.

“It was a year that didn’t see any big moves or movements like the previous years so

perhaps on the positive side you could call it stable,” pointed out Nair.

D FOR

DESIGN


“Retail spends have gone down while etailers/e-commerce players have advertised heavily

across all mediums. Even telecom spends saw a low while handsets have been up.

Everyone seems to be after launching their mobile apps and that has seen a huge increase in

spends for downloads. Also, saw a dip in textiles though a few new players have entered.

Saw a big time movement of Travel and Education players into digital,”

commented Thakur.

2016 – CONTENT CONTINUES TO REIGN Sunil Lulla, MD, Grey Group India, opines that 2016

must be seen in context of the economy, which at this

time is full of challenges. But compelling story telling

will never cease to amaze.

Societal trends reflect largely on the performance and

content of every industry. Conversations will become

more important than conversions.

“From a creative standpoint, the age of the more correct, more strategic thinker will

yield to the creative leaper. And that should be an interesting reversal to observe,”

expressed Jaleel.

Naresh Gupta, CSO, Managing Partner, Bang in the

Middle, shares that there has been too much of

domination of technology on advertising. Data analytics,

platforms, and apps, will take a back seat while pure

brand ideas will hop behind the wheels.

“Advertising has become too driven by offer and

transactions. No brand can be built on back of efforts that

drive hands and feet only; brands will invest back in storytelling across media. From offline

to online to point of sale, compelling stories are the only thing that will connect brands and

brand fans”, commented Gupta.

Upendra Thakur, Co-Founder, Origin Beanstalk,

too believes that the year lacked zing. There were no

exciting products launches and FMCG category was

largely static while, real estate has been down. The only

high point could be witnssed during the fierce e-

commerce battles.


THE BULL’S EYE! A brand can solve significant problems, but it can’t become relevant in the lives of

people until it starts communicating with them. This is the reason advertising exists.

Here are the top five ad campaigns of 2015, which not only managed to boost their

respective brands but also successfully occupied a place in audience’s hearts.

In order to create buzz around World Cup, Star Network

rolled out experimental ad film #MaukaMauka, right

before the India v/s Pakistan match.

Surprisingly, the experiment turned out to be a profitable

move and thus, Star decided to continue #MaukaMauka

by follow up films and as they say - the rest is the history.

#MaukaMauka campaign was conceptualised by a team

of four members from Bubblewrap Films. However, the creative idea comes from by

Mustafa Rangwala, Start Networks.

The main lead through all films was the Delhi based actor Vishal Malhotra.

With millions of views on all ad films, the campaign was trending on social

media as well.

In 2014, Nescafe tasted huge success through their ad

film featuring a stand-up comedian who stammered,

under #ItAllStarts campaign.

Taking #ItAllStarts to another level, Nescafe rolled out a

new ad film. Conceptualised by McCann Erickson, this

film tells the story of a cartoonist losing his job at a

newspaper, as the publication decides to drop cartoons.

He then takes up to social media and makes it big.

This ad film too created a buzz and is still running strong various on television and social

media platforms with approximately 6,730,331 views on YouTube so far.

#MAUKAMAUKA

NESCAFE- CARTOONIST


AIRTEL 4GTo claim the fastest internet service, Airtel rolled out

Airtel Challenge, an ad film that commits to pay users

mobile bills for life if their network is proven to be faster

than Airtel 4G.

The campaign has been conceptualised by Taproot India,

featuring a young and spunky protagonist – Sasha

Chettri, who gets into a network duel with a challenger.

Snapdeal’s Dil ki Deal campaign launched in month of

May has managed to grab many eyeballs. The campaign

features Bollywood’s perfectionist Amir Khan in a very

unique style of narration and presentation.

Conceptualised by Leo Burnett under the banner of

Picture Perfect Films, the ad film is directed by Rajay

Singh and produced by Rickii Kapoor. The idea behind the campaign was to build an

emotional connect with customers.

After the success of Dil Ki Deal, later during Diwali festive season, Snapdeal launched

#DiwaliDilKiDealWali.

Conceptualised by FCB Ulka, this campaign was based on the theme of Sale-o-Shayari.

The shayarana Andaaz of Aamir Khan grabbed lead to the success

of the campaign.

SNAPDEAL #DILKIDEAL

India v/s Pakistan theme tends to bring out the best of

creativy.

Aimed at spreading the message of being united,

Fevikwik rolled out an interesting ad film during the

India v/s Pakistan match titled Todo Nahi Jodo.

This 40 seconder ad film is probably that ad film, which

audience love to watch during the break instead of

changing the channel.

FEVIKWIK- TODO NAHI JODO

Like #MaukaMauka, the success of this experimental ad film, forced Airtel to convert it

into a campaign by launching series of ad films.

As an Indian soldier and his Pakistani counterpart try and outdo one another during their

usual border-march, the sole of the Pakistani soldier’s shoe comes apart. He looks

pleadingly at his rival, who, in a flurry of movement, miraculously fixes it.


According to prediction of Kurien Mathews,

Co-Founder, Metal Communication, “Luring good

people into the marketing communication industry will

remain a big challenge. Budgets will grow, and there will

be more e-commerce start-ups entering the fray. Also,

there will some more new agencies being launched.”

GAZING AT THE CRYSTAL BALL

A slow-motion replay reveals how the Indian soldier whips out a tube of Fevikwik from his

pocket and mends his rival’s shoe instantly. They salute each other and disband, at which

point a voice-over and super go, Fevikwik. Todo nahin Jodo.

The ad film invited flak from for taking a dig at the legendary Wagah Border act. However,

creatively it continued to be remembered as a milestone.

Advertising has grown from a tool of communication to a stream of creativity, passion and

storytelling.

According to Gupta target audience will become just a media enlisting tool. Brands will

target fans and not the wider swarm of audience. Fans are what will create following for the

brand. Marketers will have to give the audience a stage to work on.

From a brand point of view, Jaleel believes that marketers will have to abandon a lot of holy

grails like 'that's the one thing we are about' or ? 'we are not the sort of brand that talks like

that', in pursuing more and more non-obvious ways of capturing this diffusion of eyeballs.

Speaking about the trends foreseen in 2016, Jaleel said, “I see a future where there are tiny

media brands (though they may eventually be owned by giants) and even individual ones.

It's this interesting mash-up I guess that'll start acquiring some form in 2016.”

Commenting about the expectation from the New Year,

Ashish Bhasin, Chairman & CEO South Asia Dentsu

Aegis Network, said, “2016 will also be good. We

anticipate another double digital growth next year

(between 10-12 %). Contribution of new categories like

e-Commerce is contributing well in the growth of

advertising agencies.”

There will be marginal increase in TV (12 to 16 %). He also predicts that finance

advertising will be better and more than what it was in 2015.Spends in FMCG will see a rise

and so will travel and fashion/apparels.

With new age ad formats seeping in, its high time that the industry stop categorising

advertising into water-tight online and offline compartments. Creativity across any

platform is pure for of advertising and this seems to be THE future trend.


THE INDEPENDENTINDIA CONTINUES

MSOs TALE OF

STRUGGLE IN

According to TAM Annual Universe Update 2015, the

Indian cable and satellite TV industry is currently at 161

million households which is over 11 % from January,

2014. Digital Households 84 million have grown at 8 %

while terrestrial households have witnessed a drop.

Speaking on the performance of cable TV industry in

2015, Jeevan Khanna, Founder, Lucknow9 said, “This

year the cable television industry has not witnessed any

significant changes. All stakeholders have been busy in

planning their revenues, thus adding to the confusion

and chaos before mandatory digitisation. No one

endeavoured on improving basic infrastructure such as

rate per channel, revenue sharing between MSO and

LCO, bank subsidy or indigenous boxes etc.”

Non-tier I cities are considered as the home ground of DTH players. However, post

digitalisation, MSOs are giving tough competition in some areas. A major reason is that

MSOs have to deal with the LCOs to reach out to their subscribers. Apart from this,

independent MSOs are also suffering from the biasness of broadcaster toward major

MSOs.

“For independent MSOs, the year 2015 can be termed as the year of patience, where they

are patiently waiting for the ‘Achche Din’. From the growth point of view, the year was

neutral, as no growth or changes have been witnessed, while the expenses are increasing

year after year. In fact, government was slow with no policies or schemes being rolled

out,” added Ravi Gupta, Co-Founder, Delhi Distribution Co (DDC).


THE IMPACT OF DIGITISATIONDigital population grew by 4 % in January 2015 over January 2014. Digitisation was

expected to solve a lot of issues including the reach of television, ARPU, communication

with LCOs and much more. While it has been a busy time for major cable operators since

Phase I & II of digitisation, smaller individual cable players stand at a dead end.

“After digitization there is no growth for MSOs.

From the time broadcasters have separated from

aggregators it is only the broadcasters who are

growing. For instance, the media pro which offered

Zee + Star content at Rs 40 is now charging Rs. 70/-

for the same content,” expressed Ravi Gupta.

However, in January 2015, all India Digital penetration is 66 % in TAM reported markets

and it hiked from 0.1 million to 1 million that leads to a significant growth in the Digital

universe for SEC CDE.

On the other side, Gaurav Gupta, Star Broadband Services, believes that digitalisation

brought many positive changes in terms of quality of service and service delivery. “At

present, we are at a stable position. But growth is only in terms of technology wherein

distribution of revenue is not properly defined, expressed Gaurav Gupta.

As per the TAM report, cable TV and satellite penetration have witnessed a growth across

all TAM reported markets with growth being highest in Rajasthan, UP and MP LCOs,

while Kerala market witnessed the highest growth in Digital penetration.

Ravi believes that digitisation, brought 100 % transparency between consumers, LCOs,

MSOs and broadcasters. Shedding light on the issue he further mentioned that earlier

broadcasters used to blame MSOs for hiding the actual number of subscribers. At present,

the situation is such that they themselves are not willing to get the fee disclosed as the

broadcasters deal in fix fee with big MSOs and DTH players. So incase of any, cross

holdings, broadcasters simply try to beat their competitors and earn maximum profit.

“Digitalisation has provided a number of benefits to the Broadcasters, LCOs and

Government, while MSOs’ growth is completely paused”, added Neeraj Jain, Executive

Director & Managing Director, Sea TV Network.


“The major issues of cable TV operators in Bihar is the competition as there are 4 major

MSO’s namely; Darsh, Siti, GTPL, Den. The overall size of the impatient market is

decreasing and the revenue per sale is consistently trending downward. Operational costs

and capital needs continue unabated and options for alternative outpatient business

development are met with competition from the very distributors, commented Sushil

Kumar, Director, Darsh Digital Network.

However, with regard to socioeconomic development Bihar lags behind as compared to

other states with its ARPU ranging from Rs. 100-150. Entertainment tax in Bihar is Rs. 15

and 15 % on the revenue for DTH players.

The taxation is eating up our profits. Thus, service tax and entertainment tax also need to be

controlled,” commented Khanna.

Ravi informed that the presence of broadcasters is a major issue. There are more than 800

broadcasters in all and the number of channels owned by few exceeds 30. This gives them

an add on advantage of getting more business through advertisements.

Likewise Gaurav Gupta too believes that the only major issue of MSOs in Delhi are

discrimination in the pricing by the broadcasters.

Shedding the light on the issues in Uttar Pradesh, Jain mentioned that in UP nobody is

following the guidelines of TRAI. Rules and regulations are there, but there are only few

MSOs are following them. Thus, there is no meaning of digitalisation.

Independent MSOs are also facing a lot of issues while collecting the payments. Many time

LCOs refuse to pay, as major MSOs are offering lesser price. But they can’t offer, as they

are paying higher to the Broadcasters.

THE STRUGGLE OF INDEPENDENT MSOs

Non-tier I cities are considered as the home ground of DTH players. However, post

digitalisation, MSOs are giving tough competition in some areas. The major reason is

MSOs have to deal with the LCOs to reach out to their subscribers.

According to Bihar state Pay-TV FTA Report 2014, cable TV market in Bihar is dominated

by regional MSO Darsh Digital and Maurya Cablenet, which operates through a joint

venture with Siti Cable. Among DTH operators, Dish TV is a key operator in Bihar.


Commenting on the situation of independent MSOs,

Gurdev Singh Bullar, Founder, God Father

Communication, said, “For us, today situation is the

same as prior to digitalisation. I’ve not witnessed any

major change in Punjab post digitalisation. The issues

are still as it is such as no transparency, biased

broadcasters, lack of rules and regulations.”

THE BIASED BROADCASTERSMajor MSOs and DTH players hold very good equation with broadcasters, independent

MSOs are suffering from the biasness of broadcaster toward major MSOs. According to

Khanna, especially in Uttar Pradesh, there are many issues such as lack of transparency

from the Broadcasters. They are declaring the RIOs but not sharing any further details on

the deal.

“Broadcasters are being biased with independent MSOs and they offer different prices to

the National and other big MSOs. Government must decide fixed MRPs for broadcasters

and that should be the same to all i.e. both DTH players and MSO, added Khanna.

Undoubtedly, digitalisation brought MSOs, cable TV operators at the same level/platform

and now these rivals, MSOs, DTH players and independent MSOs are trying hard to get

edge upon the increasing competition.

Speaking about the biasness of broadcasters, Jain said, “Broadcasters are not only increasing the rates, but also they are biased towards major MSOs. We are paying a higher amount for the same thing as compared to major MSOs. It’s getting very difficult for us to compete in such kind of biased environment as there is no scope for growth.”

Explaining the reason behind this biased behaviour, Kumar informed that the volume of

major MSOs are very high and thus, the CPS rate in comparison to the independent MSOs

is very low including discounts. It therefore creates a big hurdle for survival of an

independent MSOs as the CPS rates are high. Also, the credit limit of major MSOs is high

in comparison to the independent ones.


REGIONAL CONTENTPost digitalisation, the consumption of local and regional content has increased and it’s

helping MSOs to get an edge upon the competition.

“There is huge scope for local content these days. Our local channels are very beneficial to

us. Our satellite channels are doing really very well and getting us positive responses from

the audience,” commented Jain.

Local channels are very important to compete with DTH

players. Jain further added that people are switching to

DTH players, whereas cable operators are not being able

to serve that well, there is a need to educate them.

There is good scope for regional channels but since it is

not promoted well they do not get the required hike.

Also, the Ad revenue is not so good due to lack of

promotion.

“Yes, there has been an increase in regional content consumption post digitisation. Darsh

Digital Network Pvt. Ltd. is performing very well in its areas and covers all significant

content at all its distribution points,” commented Kumar.

After all struggles and issues faced, independent MSOs have survival instincts. Darsh

Digital Network, has achieved good numbers and in Phase 2 and Phase 3 markets giving

tough competition to MSOs. Kumar informed that the venture has covered almost 40 % of

areas across Patna.

On the other side, DDC is claims to be India’s first channel that has moved 100 % from SD

to HD. Darsh Digital Network is planning enter the high speed broadband, OTT (Over The

TOP) VOD (Video On Demand) service, Local Darsh Channels etc. Phase III areas have to

be digitalized as it is planning to carry on the same in entire Bihar and Jharkhand. It is

aiming to cover all the areas in Phase III and Phase IV.

While Lucknow9 is looking for investors to raise funds, so as to invest in invoicing- billing

and thereby become a completely digitalised.

With 1.25 lakhs installed STBs, Sea TV Network is the leading player in Agra and is

targeting 5 lakh STBs in phase III to cover 150 Kms in nearby regions and also getting

expansion offers from all over India.

The oldest digitised network Star Broadband is serving in South Delhi and is planning to

expand its services to smaller towns. Also Star Broadband is in the process of launching its

app for mobile presence.

“Now with mandatory digitisation post 1 January 2016, there is a hope of market correction

and emergence of serious players in this business, who can add value to the economic

ecosystem,” concluded Khanna.


INDIAN TELEVISIONINDUSTRY’S REVENUEEXPECTED TO EXCEED32.7 BILLION BY 2019$

According to the FICCI KPMG Indian Media and

Entertainment Industry Report 2015, television

industry in India, which was estimated at Rs 475 billion

in 2014, will grow at a CAGR of 15.5 per cent to reach

Rs 975 billion in 2019.

The number of households having TV sets in India

increased to 168 million in 2014, implying a TV

penetration of 61 per cent, even as the Cable and

Satellite (C&S) subscribers increased by 10 million in

2014, to reach 149 million.

Uday Sodhi, Executive VP & Head, Digital Business, Multi Screen Media (MSM),

believes that the industry has experienced exponential growth in non-linear digital

infrastructure, anchored to rising smartphone penetration, increasing numbers of

broadband users and faster internet speeds.

Sharing his thoughts on the performance of the industry,

Sodhi said, “All indicators suggest that the ecosystem

will continue to improve at a rapid pace adding fuel to the

gold rush in OTT video. Video will account for 66 per

cent of mobile data traffic in India by 2019, up from 36

per cent in 2014, according to estimates from CISCO.”

Apart from this, Media and Entertainment industry is receiving strong support from the

government, as it takes various initiatives such as digitising the cable distribution sector to

attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in

cable and DTH satellite platforms and granting industry status to the film industry for easy

access to institutional finance.

AD SPEND & REVENUESIndia Brand Equity Foundation (IBEF) mentioned in its report that India’s Media and

Entertainment industry is expected to grow steadily over the next five years. The same

report stated that television and print are expected to remain the largest contributors to the

advertising pie in 2018 as well.


The report further revealed that the industry revenues are likely to exceed $ 32.7 billion by

2019 from US$ 17.0 billion in 2014, growing at compound annual growth rate (CAGR) of

14.0 per cent between 2015 and 2020.

Sharing her thoughts on the TV ad spend, Anita Nayyar,

CEO, India-South Asia, Havas Media Group, said, “TV

industry is probably the only one which does not get

impacted at an overall level. Inspite of average growth in

the overall advertising industry TV probably is a major

gainer. Given 2015 has been an election year and the E-

commerce sector has been the sunrise sector which has

stormed the industry with big spends largely in favour of

TV.”

In 2014, Indian general elections boosted the television advertising revenue that leads to

the improved macro-economic outlook due to a stable government at the centre.

According to FICCI KPMG report, the total TV advertising market is estimated to have

grown at 14 per cent in 2014 to Rs 155 billion. Going forward, TV advertising in India is

expected to grow at a CAGR of 19 per cent to reach Rs 299 billion by 2019.

As a result, the revenue from advertising is expected to grow at a CAGR of 13 per cent and

will exceed Rs 81,600 crore (US$ 12.29 billion) in 2019 from Rs 41,400 crore (US$ 6.24

billion) in 2014.

Talking about the subscription revenue, it will grow at an annualized 16 per cent; higher

than ad revenue's 14 per cent annualised growth, stated FICCI KPMG.

On the other side, IBEF disclosed that in 2014, the subscription revenues for broadcasters

grew at only 10 per cent to Rs 75 billion. This is expected to grow at a CAGR of 22 per cent

from 2014 to 2019 to Rs 201 billion.

In the Indian media and entertainment industry one of the

most disputed subjects is the measurement. The industry

has been divided over various issues related to

measurement.

The TV rating data Television Audience Measurement

(TAM) has been a moving target for broadcasters and

BARC’S DEBUT

advertisers. As a result, in April 2015, the industry bodies representing the three key

stakeholders - broadcasters, advertisers, and advertising and media agencies – launched a

new rating system – BARC India.


“While we started with rolling out household data in

April 2015, in a short span of six months, we have come

a long way, fulfilling the promise of giving the

stakeholders a sense of “What India Watches” with our

All India (Urban+Rural) ratings”, commented Partho

Dasgupta, CEO, BARC India.

BARC has been receiving strong support from the industry as it is a measurement system of

the industry, by the industry and for the industry. Thus, it further introduced its rural ratings

in October 2015 to strengthen its position.

According to BARC survey, there are 153.5 million TV households, of which 77.5 million

are from urban India, while 76 million belongs to the rural India. Dasgupta further added

that the huge numbers of rural India TV households were completely ignored, until BARC

India started rolling out All India ratings through its 22,000 Bar-O-Meters installed across

the length and breadth of the country.

REPORT CARDAccording to BARC survey, all India data include the younger age group of the television

viewers from rural India, who not only have a high spending power, but are also

aspirational. The same reflects in the high percentage of viewership which comes from

rural India to English Entertainment, English News and English Movie channel genres.

“For instance, 73 per cent ratings in the English News genre comes from non-metros, 40

per cent ratings in English Movie channels comes from Rural India and 41 per cent ratings

in English Entertainment channels comes from rural India”, added Dasgupta.

Star Plus was the undisputed ruler in 2014, witnessed tough competition from Colors in

2015. Zee TV has been playing its cards smartly and surprisingly Zee Anmol turned out to

be the biggest gainer according to BARC rural ratings.

Sony Sab and Sony Entertainment were seen struggling for more than a year, however

finally succeeded in gaining eyeballs.

On the other side, Sony Max, Zee Cinema and Star Gold emerged as the top entertainers in

Hindi movie genre. Sharing views on the expectations from 2016, Ajit Andhare - COO,

Viacom18 Motion Pictures said, “Satellite rights, which is one of the key revenue streams

for the studios will play an even more important role. Films are consumed on TV by a wider

audience base and the ratings that the motion picture will get will just be another success

matrix for the film producers/ studios.”


Among the Hindi news channels, Aaj Tak, India TV and ABP news competed well,

whereas in English news market Times Now turned out to be the undisputed king.

However, in the debut week of India Today TV, the channel began with good numbers

while claiming the throne however gradually started losing eyeballs.

“2016 will see BARC India foray into split beam and digital measurement which will give

an insight into what people watch across multiple screens,” expressed Dasgupta.

However, Nayyar believes that digital is staged to gain ground, it is TV which will again

receive favourable response given more states going into elections and large established E-

commerce players consolidating spends and many more start-ups receiving their rounds of

funding.

“Automobile sector will also see many launches and once again the skews will favour the

TV industry. Not to mention regular spends coming the TV way from FMCG, Telecom,

Mobile and the likes of Patanjali,” concluded Nayyar.


THE RISE WEBSITES

OF CASHBACK& COUPON

The cashback and coupon websites began a new

trend with the online shopping industry in 2014. They

further strengthened their market position and became

an important segment in the booming e-commerce

industry in India in the year 2015. Cashback and Coupon

websites are commission based ventures which work to

generate sales and pull traffic for the online retail

partners they tie up with, such as Amazon, Flipkart,

Snapdeal, Jabong, Myntra, ShopClues etc.

Today, these portals give an opportunity to save more money, even on the discounted

products. A retailer pays commission to the website and instead of keeping the entire

commission it shares it with the customers.

Speaking about the reason behind the success of the

segment, Swati Bhargava, Co-Founder, CashKaro said,

“Cashback and coupon portals have emerged as an

important segment in the booming e-commerce industry

in India. The Indian customer loves a good bargain and

that is what is the key driver of cashback sites in the

country and also makes a perfect fit.”

Apart from this, these players make shopping experience even better for the customer, by

helping them in getting best deals, so that they can save more money.

“Overall couponing has become an integral part of the online marketing ecosystem and

brands have realised the benefits that coupon partners bring to the table,” said Ankita

Tandon, COO, CouponDunia.

2015 was an exciting year for the e-commerce players and online market places. Cashback

and Coupon portals played a key role in the growth of this sector, by acting as a helping

hand to the small e-commerce stores and start-ups, which don’t have big budgets to run

display ads; they can easily tie up with cashback and coupon sites and start promoting their

products without any investment.


THEUCCESSSTORY

During The Great Online Shopping Festival (GOSF) 2014, Cashback and Coupon

websites played a key role in getting the transaction of the ecommerce players. With about

450 brands and websites offering discounts as part of GOSF, buyers got smarter this time

with the help of price-comparison, coupons and cashback websites to avoid the tiring task

of visiting each e-commerce portal trying to find the best deals.

According to Rohan Bhargava, Co-Founder, CashKaro,

this affiliate marketing segment now accounts for a

commendable 15-20 per cent of e-commerce sales in the

country. Recognizing the contribution of cashback sites

in driving quality traffic and sales, e-commerce

companies are now increasingly relying on cashback

marketing and building it into the overall marketing

strategy to get an edge over others in the market.

Coupons and cashback sites usually involve a lot of digital marketing which includes

Search Engine Optimisation, Google Adwords, video ads, display ads, search ads, social

media, mobile app, print advertising and mailers, among others.

Festive season is one of the major periods where ecommerce players witness a hike in

transactions with maximum sales as compared to the rest of the year. Thus, these cashback

and coupon players are also utilising the opportunity by offering good deals to make the

most of it. Apart from metro cities, these ventures are getting good responses from tier II

cities.

On the other side, Tondon informed that while brands

individually drive to gain their market share,

coupon/deal partners are the platforms that savvy,

regular online shoppers frequent and hence brands need

to be present there to cater to the smaller audience but

one with significant buying power.

“Like CD, most of the partners in this vertical would have seen 80-200 per cent increase in

traffic, transactions and revenue on a y-o-y basis,” added Tondon.

Rohan recalls these cashback sites as enablers of e-commerce, as with expansion they have

begun generating interest among VCs and angel investors. With the growth of

e-commerce, these sites have started getting attractive funding offers.


NEED FOR MANAGEMENTCustomers expect to get the cash back immediately after the completion of the transaction

and while shopping online, but that doesn’t happen.

There is no minimum amount for cash withdrawal; customer can withdraw any amount

available but, his/her account won’t be activated until the return period of the purchased

product is over, which usually varies from retailer to retailer and is normally within 30-90

days.

The discount which is offered to a first-time customer will not be the same for repeat

customers; therefore, it is a great tool for customer acquisition, but not for customer

retention.

GOOD HOPES FROM 2016Swati believes that given a reduction in traditional discounting by retailers, cashback will

continue to be a key marketing channel since it offers real saving without blatant

discounting.

Likewise, Tandon mentioned that with the advent of mobile platforms, coupon/deal

partners too have become extremely savvy when it comes to their infrastructure and

backend processes.

“As online users across the country increase, brands will want all the support they can get

from direct and channel partners like coupon/deal platforms to not only convert potential

window shoppers to buyers but also help in the hand holding of these newbies.

Coupon/deal platforms too will have to evolve to better serve their product to the first time

user and yet ensure the regular savvy one is not disappointed,” expressed Tandon.

Rohan is expecting cashback tracking on mobile app to

go live soon with more retailers enabling App to App

tracking. He also believes that, the enablers of e-

commerce such as Cashback, Coupons and price

comparison sites will continue generating interest

among VCs and angel investors as they expand.

“Recognizing the contribution of cashback sites, more and more e-commerce sites will

allocate attractive commissions to cashback and coupon sites to maintain their leadership

position in this competitive market. We expect more retailers who were earlier offering

only coupons to build technologies that enable them to adopt the cashback model,"

concluded Rohan.


THE GOLDEN ERA OFINDIAN RADIO INDUSTRY

Over the years, evolving technology got the radio

consumption in India to another level. The development

of Indian radio industry in past decade can be attributed

to the launch of several private FM radio channels and in-

built FM radios in smartphones.

According to CII & BCG’s Shaping the Industry at the Time of Disruption report, the

Indian radio industry has registered 11 per cent CAGR over 2010-2015 and is currently

valued at INR 2,300 Crores. There are 250-300 Million radio users today which is more

than TV Household’s and Inter-net users in India.

Speaking about the growth of radio industry Nisha

Narayanan, COO, Red FM said, “The industry has

reached at a level today after years of hard work and

perseverance and we are really grateful of all our

listeners and advertisers who have posed faith in us. Of

course the medium is reaching to far more listeners than

earlier but at the same time the competitive landscape has

also widened. From what used to be Print, radio and OOH; today we have a wider choice

when it comes to media mix. Radio has still a long way to go – task is to take it to 8-10 per

cent of overall media pie…and with phase 3 and 4 we hope to reach to that level.”

Mahesh Shetty, EVP, Head - Digital Initiatives, Radio Mirchi, also believes that after

digital, it’s the radio industry which has been growing really very fast.

THROWBACK: 20152015 has been an exciting year for media and entertainment industry. According to FICCI-

KPMG Media & Entertainment Report, the radio industry registered a robust growth of

around 24 per cent with the top eight metros still dominating the market, accounting for 70-

75 per cent of industry revenues.

Commenting the on performance of radio industry in 2015, Harrish Bhatia, CEO, My FM,

said, “The industry’s performance has been good so far. The outlook of the industry is

positive and promising. If we compare Q1 and Q2 of this financial year we have grown by

about 12 per cent. We see a lot of new category experimenting and using radio medium

specifically dotcom. The advertising spends from existing categories like Real Estate,

Automobile, Banking and Finances have increased over last year.”


2015 witnessed increasing number of FM radio listeners

coupled with the growing expenditure on advertisement

campaigns by real-estate, pharmaceutical, education,

healthcare sectors, etc., are resulting in strong growth of

the FM radio industry.

While, Shetty informed that the Radio industry has

grown between 10-13 per cent range and he expects

further growth of about 12-15 per cent,which is far ahead

of print.

However, as per the estimates by India FM Radio Industry Forecast & Opportunities, 2019,

the Radio industry is expected to witness double digit growth during 2014-19.

Narayanan too believes that 2015 has been an eventful year for the Radio Industry.

Expressing her happiness and excitement about the success of 2015, Narayanan said, “I am

happy to see FM radio at this stage in the decade long journey of most of us. With Phase – 3

finally getting off the ground after having been in the offing for 4 years is, in my view the

biggest and the best thing that could have happened to the Industry. Of course one expected

some more, but then well begins is half done is what I believe in.”

PHASE III – THE MOST AWAITED DEVELOPMENT

The year 2015 witnessed the commencement of the most

awaited phase III auction in July 2015. This is further

expected to bring in revenue of about US$ 390 million.

Phase III FM license auctions will drastically expand FM

radio services from 86 cities to 294 cities and rural areas,

enlarging FM radio’s reach from 40 per cent to 75 per

cent of the Indian population.

Tier-2 & 3 cities have been untapped markets offering latent growth opportunities for FM

radio market. Further, following the phase III auction, radio’s positioning will be

strengthened with pan India presence attracting more advertisers.

“Phase III saw the most competitive and aggressive bidding for various frequencies on

offer in Batch 1 and I must complement the Ministry for pulling off a glitch free auction,”

added Narayanan.

According to the results declared by the Information and Broadcasting Ministry on its

website, HT Media Limited and Reliance Network Broadcast Limited are among the top

players that have emerged as highest bidders in the e-auctions for the first batch of channels

under the private FM radio phase III expansion.


HT Media bagged channels in Delhi, Mumbai, Hyderabad, Kanpur and Lucknow, whereas

as Reliance successfully managed to win the bids in Pune, Lucknow and Patna.

With Phase 3 FM auctions allowing more than one frequency in a city, radio stations are

anticipated to aggressively pursue localized content and news (with some conditions) to

attract audiences and advertisers alike with wider bouquet of channels.

RADIO ADVERTISINGPhase III auctions are likely to have a positive impact on radio advertising, as prior to this

post phase II auctions in 2015, the radio industry’s advertising share increased from 1.6 per

cent to 3.6 per cent in 2009.

However, over the last 2 years radio advertising received a fillip from increased

government and political spending including the elections in 2014 and emergence of e-

commerce as a major advertiser.

“We had a very good start with most cities and stations seeing demand for radio advertising

going up. Most of the radio players have been growing in double digit figures and are

witnessing a healthy demand on the inventory front, making it clear that there is room

enough for new stations in some markets,” expressed Narayanan.

Radio industry can also leverage live events such as musical award shows to gain brand

awareness and offer advertisers with a strong advertisement medium.

Globally radio advertising has been resilient to the structural migration to digital as radio is

the top source for music consumption with time spent on radio increasing from 10.4

hours/week in 2009 to 12.3 hours in 2014 with total share of media consumption stable in

26-27 per cent despite the digital explosion. Further it is an attractive medium for

advertisers given its combination of reach, ability to choose individual geography and

effective pricing.

Radio particularly continues to remain the media of choice for music discovery even in

developed markets and hence attracts interest from publishers and advertisers.


2016: YEAR OF ACTIONCII & BCG’s report stated that the Indian radio industry is expected to grow in the range of

18 per cent to 20 per cent CAGR to between INR 5,000 Crores and INR 6,000 Crores by

2020. Even our base case scenario factors a healthy growth rate of 18 per cent CAGR

assuming that phase 3 auctions have the same positive impact of phase 2 auctions with

radio share of total advertising increasing from 5 per cent in 2015 to 6-8 per cent by 2020.

There is no doubt that post phase III auctions of batch 1, all winners will get busy in

launching and consolidating their stations and batch 2 and phase 4 are likely to be expected

in 2016.

“From the radio point of view, I would call 2016 as the

year of radio. As we all won frequencies in phase III and

will make these stations functional, commented Shetty.

Radio industry has a bright future, believes Narayanan

and she is excited and confident about the future of radio

industry. “We want be more closer to our listeners by

offering them best of 3600 and in that direction digital

and on ground engagements and activation will see

bigger role. Personally I see industry growing more than 20 per cent in 2016; a notch higher

than 2015” expressed Narayanan.

However, on the other side, Shetty predicts that in terms of reach, the private FM radio will

reach out to far more listeners.

“We will also launch our second brand as we have second frequencies in the many of the

markets that we are operating. In terms of audiences, we will come out with the different

kind of content, added Shetty.

According to Narayanan, one can also expect evolution of few more markets such as

Hyderabad, Pune, Chandigarh, Ahmadabad, Kochi, Jaipur, Trivendrum etc as key growth

makers. Eastern & North eastern cities such as Patna, Bhubneshwar, Guwahati and

Shillong will also emerge more strongly in overall radio planning scenario and that will

make industry grow faster than its current level.

“Dotcom business is a big boost to the medium though currently our market spends are not

huge but we anticipate it to be big in 2016,” said Bhatia.

Radio requires experiments to get into new formats, content and engagement. “I am

hopeful that the convergence of Radio with Digital, TV and Print will be more visible in

time to come. All this plus wish if government also comes out with their new DAVP related

advertising rate structure, more autonomy on news events and live sports etc; it would help

in taking radio to greater heights” concluded Narayanan.


AN ACTION PACKED YEAR

FOR THE E-COMMERCE SECTOR2016 EXPECTED

Recently, TechSci Research mentioned that the Indian e-

Commerce market is estimated to grow at 36 per cent

from 2015-2020. As stated in the report, rising number of

high speed internet users is encouraging businesses to

innovate and offer a diversified array of products and

services online.

Neeru Sharma, Co-Founder & Director, Infibeam informed that India has emerged as 3rd

largest internet user base in the world and as per the reports published if the trend continues

India will be the 2nd largest in terms of Internet user base. The Broadband subscriber in

India is predicted to be over 144 million in 2019 from 86 million in year 2014.

According to Goldman Ecommerce Report 2015

published in May, the ecommerce market was worth $12

billion by the end of the fiscal. It currently projects a

stronger-than-expected growth of $23 billion. The report

further mentions that as on 31st March 2015, India had

around $11 billion through online sales.

2015: MIXED REVIEWSThere were 35 million online shoppers in India as of Q1 2014 and is expected to cross 100

million mark by end of year 2016. Recent statistics show that retail e-commerce sales in

India have grown tremendously, from 2.3 billion U.S. dollars in 2012 to an estimated 17.5

billion U.S. dollars, representing an almost eight-fold growth.

“Market size of e-tail is US$ 7 billion in 2015 and expects the market size of e-tail in India

to be around US$ 44bn by 2020. This means the size and opportunity of e-commerce will

be phenomenal,” commented Sharma.

According to Zafar Rais – CEO, MindShift Interactive, E-commerce became a bigger

playground with additional categories being formed by the old players, and with a lot of

enterprising new players creating new categories. Grocery, concierge services, ready-to-

eat healthy meals, carpooling are some of the key game changers that have entered in 2015.


Speaking about the performance of the industry, Amarjit

Batra, CEO & Founder, OLX, said, “2015 a year that saw

stars became super stars, as well as many new stars

entering the space. It was also a year that saw companies

that were unable to succeed in the mainstream e-tail and

online classifieds diversify into multiple brands. These

companies will have to start from scratch, and raise funds to build and grow their new

brands.”

As of 2015, the retail e-commerce sales as a per cent of total retail sales in India account for

0.9 per cent of all retail sales in India, with an expected growth, reaching 1.4 per cent in

2018, stated Statista report.

However, Ganesh Vasudevan – CEO, IndiaProperty believes that unlike earlier times

where the market suffered because of high interest rates and political instability and the

market dynamics favoured investors and builders, in 2015 the residential market was

primarily a buyers’ market.

“Firstly RBI reduced the repo rate by 125 basis points

since January 2015, forcing banks to reduce the home

loan rates for property buyers. Secondly builders in most

of the big cities like Delhi NCR, Mumbai, Pune etc. had

high unsold inventories and therefore offered good deals

and discounts for homes. Overall residential property

sales this year have been slow and witnessed negligible price movement. But buyers

especially end users made constant enquiries about properties indicating high intent in

buying,” commented Vasudevan.

On the other side, according to Peyush Bansal, Founder & CEO, Lenskart, the industry

overall witnessed growth this year, as most players expanded their presence from urban

cities to Tier 2 and Tier 3 cities.

Expressing his thoughts on performance of e-commerce industry, Bansal said, “This year

witnessed e-commerce companies trying constantly to differentiate themselves by offering

services like cash backs, 30-day replacement warranty, mobile wallets etc. In all, the

industry fared well this year and holds immense potential for growth in the coming

years as well.”


Gone are the days, when online shopping was limited to PCs and laptops. Nowadays,

shopping on mobile is trending. In fact, leading players like Myntra went app only and

Flipkart has a keen interest in opting for similar model.

More than 235 million people in India access internet through mobile devices. This is the

primary reason for e-tailers to focus on mobile app penetration across the country.

“Mobile has been the platform for growth, and 2015 has yet again proved the same.

Most businesses saw traffic from mobile increasing manifold, but those who were the first

ones to invest in developing a robust mobile App reaped maximum benefits,”

expressed Batra.

In India, 9 per cent of the country’s population made purchases via mobile phone within the

past month, as of the fourth quarter of 2014.

According to Bansal, this year, as technology evolved,

the e-commerce industry as well adapted itself to newer

techniques, with an objective of facilitating more

purchases online and gratifying consumer demands.

The mobile applications help in reaching out to

customers located in remote and rural areas.

E-commerce companies have also been able to bridge the service gap considerably by

sending service updates and other communications via their mobile app, e-mail, and SMS.

“It isn’t surprising to note that with a population of over 1.2 billion people in India and with

an uptake in mobile and internet adoption, players in the industry were focussed on tapping

consumers across segments, by adding more sellers on their website this year,

added Bansal.

Expressing his views on growth of mobile technology,

Zafar informed added that mobile-only will become

bigger – The fact that Google believes mobile usability

as relevant for most favourable search results is in itself a

sign of the growing importance of mobile. Among

Google Webmaster Tools you'll find a new one called

Mobile Usability, designed specifically to cater to this

new requirements.

M-COMMERCE V/S E-COMMERCE

The revenue coming from mobile app is on the rise e.g. 50 per cent for Flipkart while 70

percent for Quikr.


Batra has high expectations from 2016, he believes that it will be an action packed year.

According to Batra, in 2016 new businesses will continue to enter the space, the first signs

of consolidation will start emerging in the industry.

According to Tracxn, in the first nine months of 2015, Indian e-commerce start-ups

received $2.6 billion in funding compared to $3.1 billion in all of 2014.

“Funding will continue to flow into the space, but investors will start focussing more on

business viability, rather than just growth. A fair bit of the investments will start going

towards acquisitions”, added Batra.

Likewise, Vasudevan’s expectations are also positive, as he mentioned that even though

the realty market moved at a slow pace in 2015, property seekers continued to make

enquiries.

By 2016, 653 million people in the Asia Pacific region are expected to buy goods and

services online, a figure which translates into over 48 per cent of internet users in the Asia

Pacific region purchasing products or services online.

“With lowering home loan interest rates and developers giving good deals for homes the

market is likely to pick up in the second half of 2016. Developers offering mid and low

income segments properties will witness maximum demand from buyers. Mobile usage for

property search is expected to get doubled in the coming year, commented Vasudevan.

According to recent data, the number of digital buyers in India alone is expected to reach 41

million by 2016, representing 27 per cent of the total number of internet users in the

country.

On the other side, Bansal mentioned that the coming year seems to be promising for the e-

commerce industry as online retailers will experience more success in areas where they are

supported with good retail infrastructure. As per industry sources, value of India's e-

commerce market is estimated to reach nearly $18-20 billion in 2016.

“In 2016, businesses will be more about mobile than ever – they'll build fully approachable

websites, focus on mobile ads and create separate content meant specifically for the

moving user, added Zafar.

On the other hand, Vijay Shekhar Sharma, Founder, Paytm informed that the venture has

grown 6 time y-o-y and expecting 60 times y-o-y, hopefully. “This is the time when m-

commerce and mobile wallets arrived to the centre stage and the trends will be up &

above,” expressed Sharma.

2016 THE YEAR TO WATCH OUT FOR


Online retail or e-commerce is transforming the

shopping experience of customers and the sector

therefore has seen unprecedented growth especially in

the last two years. This year, as technology evolved, the

e-commerce industry as well adapted itself to newer

techniques, with an objective of facilitating more

purchases online and gratifying consumer demands.

E-COMMERCE MARKET IS ESTIMATEDTO REACH NEARLY $18-20 BILLION IN

2016: PEYUSH BANSALINDIA’S

Some of the most popular product categories among

online shoppers in the region include airline tickets and

reservations, baby supplies, cosmetics, clothing,

accessories and shoes, as well as computer hardware and

software.

However, Sharma believes that, significant shifts in technology, innovation and

connectivity are driving the convergence of physical and digital transactions in the world of

e-Commerce. Economic growth accelerating and investment in internet sector is at an all-

time high.

“India's consistent GDP growth rate vis-a-vis US and China has driven high growth in

internet usage and e-retail penetration. Massive investment in internet sector in India over

last 3 years by private investors added to significantly for accelerated growth in e-tailing,”

concluded Sharma.


THROWBACK: ECOMMERCE INDUSTRY IN 2015

It isn’t surprising to note that with a population of over 1.2 billion people in India and with

an uptake in mobile and internet adoption, players in the industry were focussed on tapping

consumers across segments, by adding more sellers on their website this year.

Another interesting development this year was e-tailers foraying into physical stores to be

able to provide multiple touch points to customers. In addition to this, physical stores have

also helped e-commerce companies to reinforce their online brand and make a stronger

connect with the consumers. While this was seen an upcoming trend this year it is all set to

become more prominent in the future.

34

The industry at large continues to focus on its marketing

initiatives to personalize services for customers and

bring convenience to them at their doorstep, which will

continue to rise in the coming years. As an example, at

Lenskart, we are focussed on investing and expanding

our, “Free Home Trial” service through which customers

can select up to 5 frames of their choice from our wide

CONSUMER SPENDAdditionally, consumer spends across online and offline platforms will continue to rise in

the coming year owing to improved digital connectivity, plethora of options across the

platforms and ever-increasing offers by e-commerce players to ensure customer loyalty.

VERTICAL SPECIFIC E-TAILThis concept has picked up rapidly in the last years and will continue to grow. Vertical

specific e-tailing is focussed on providing niche product or service to consumers as they

can differentiate one player from mainstream e-commerce players. Such ventures such as

our own, is focussed on providing personalized and user-friendly experience to customers

without compromising on quality.


The industry overall witnessed a growth this year, as most players expanded their presence

from urban cities to Tier 2 and Tier 3 cities. The combination of rising disposable incomes,

consumer demands, favourable demographics, increasing mobile and internet penetration

and lucrative offers by e-commerce companies have fuelled the growth of the e-commerce

industry across markets.

This year we saw e-commerce companies constantly trying to differentiate themselves by

offering services like cash backs, 30-day replacement warranty and mobile wallets etc. In

all, the industry fared well this year and holds immense potential for growth in the coming

years as well.

TRENDS FORESEEN FOR THE YEAR 2016The coming year seems to be promising for the e-

commerce industry as online retailers will experience

more success in areas where they are supported with

good retail infrastructure. As per industry sources, value

of India's e-commerce market is estimated to reach

nearly $18-20 billion in 2016.

PERSONALIZATION

35

E-commerce players will also face competition from traditional retail players who are

slowly moving their businesses online, to encash the benefits that the e-commerce model

provides. The extended reach of the online platforms is the primary reason for offline

retailers to launch e-commerce offerings.

VIRTUAL REALITYThis as a concept will pick up in the next few years. E-commerce companies are already

investing in building customer friendly mobile app/website interface to give customers an

experience close to physical reality. Companies have started to invest in technologies such

as 3D try ons, to offer personalized user experience. The current high investment by online

retailers such as Lenskart, in disruptive technologies such as 3D try on, is indicative of the

future potential.

Peyush Bansal, Founder and CEO, Lenskart

FIERCE COMPETITIONIn the next few years competition in the domestic e-commerce industry is expected to

intensify as many firms big and small plan to foray into online retailing, realising its

potential. This will require and we’ll hopefully witness more customer centric initiatives

by online retailers to ensure customer loyalty.


range which our executive brings to the customers at their doorstep. Available through 40+

Indian cities at the moment, we wish to take this to more cities in the future to bring

convenience to our customers.

36

India

n M

edia

Book

.com

Indian Media Book

Documents

IMB Book 2015 file