Entry into the Indian Retail MarketHow to get your products on the shelves
“For in Asia and around the world, India is not simply emerging; India has already emerged.”
- President Barack Obama
About India8% GDP growth ratePopulation: 1.2 billion22 official languages
Drivers of Growth 2nd worldwide FDI
destination Rising disposable incomes Availability of qualified
staff Strong & stable financial
market Favorable demographic
trends
World’s… Cheapest car, TATA
Nano Largest milk producer Largest tea producer Lowest retail space per
capita at 0.19 m2
Biggest gold market Fastest movie producer
Five P’s of India
Success
Price
Placement
PromotionPartner
Patience
The new Indian upper-middle classYoung Indian couple /Modern Trade Outlet Bangalore
India’s Upper-Middleclass 80 million upper /
upper middle class people, 2010 McKinsey, growing to 550 million by 2025
Disposable income high
Identify themselves with international consumer
2010 20250
100
200
300
400
500
600
2010 SnapshotIndian Upper-Middle Class: 80 million
German Population : 80 million
2025 OutlookIndian Upper-Middle Class: 550 million
Population of the EU 500 million
2050 Consumption
Booming India“The global meltdown of 2008 hardly had any effect on India, while the entire world was reeling under the recession effect. It was India which presented itself as a shining example to other nations, on ways to come out of crises successfully and prosper simultaneously.”
- fxnewsindia
Retail explosion 5th largest retail market globally Worth $ 500 billion Growth rate >15% per annum 5% Organized, growing at 35% per annum Organized retail is being tipped as one of the biggest
gainers from growing consumerism and rising income
Drivers for retail growth
Booming Economy
Large young population
Spurt in urbanisation
Real estate boom
E commerce / Online shopping
How to enter the booming Indian retail marketGolden rules for any exporting company
The Right Placement
Organized TradeTraditional Trade
Types of RetailOrganized trade 5% of total retail market Growing with 35%
annually Leading chains like Spar,
Hypercity, Natures Basket growing rapidly
Broad portfolio of products, domestic and imported
Unorganized trade 95% of total retail
market Mix of modern stand
alone stores and traditional stores
Traditional store’s product portfolio is mostly domestic
Modern stand alone store’s product portfolio carries imported ranges as well
Social classes in IndiaClass Key Facts
Upper-middle High Disposable income Internationally influenced Living in the metros High willingness to experiment and sufficient budget to
buy imported goods
Middle Young working people Office jobs Willingness to experiment, but limited budget to buy
imported goods Good future perspective Higher income than the parents at young age
Lower Living in rural areas and poorer parts of the metros Getting paid in daily wages Working to survive, no disposable income
Your customer: Upper - middle class
2012 2025
42%
19%
38% Upper-
middleMiddleLower
7%21%
72%
Upper-middleMiddleLower
Modern Indian men at a Hennessy Club launch / Modern Trade Outlet in Delhi
Consumer / Retail in pictures
Indian crowd on a night out / Garuda Mall, Bangalore
Consumer / Retail in Pictures
Fashionable Indian girls /Phoenix Mall, Bangalore
Consumer / Retail in Pictures
Bollywood Stars / Forum Mall, Bangalore
Consumer / Retail in Pictures
Expected changesLaw Impact
GST Removal of compounding effect of non-interchangeability of service tax and VAT
Local taxes
Removal of inter-state “import duties” and city level “Octroi”
FDI Allowance of majority stake holding in multi-branded retail (e.g. super markets) resulting in inflow of much required cash and know-how
WTO Reduction in import duties and customs hassle expected
How to introduce products successfully?
Exporting to India
The right product and price
Quality Imported = Quality Live up to this
expectation! Dress your product
right
Set MRP right Indians are price
sensitive reg. their day to day needs
Higher disposable income allows to experiment with imported products
No competition with local brands, but with other imported products
Customer End-Price build-up
10%• Transport• Handling
45-60%• Duties• Clearing
60%• Margins for
importer, distributor, retailer
2%+5%• CST• Octroi
14%• VAT
MRP Calculator (approximate)45% dutiesSnacks/chips etc
SKU/pallet
750
1500
3000
€ 0.50 212
162 137
€ 0.75 269
219 193
€ 1.00 325
275 249
55% dutiesChocolate/mueslis etc
SKU/pallet
750
1500
3000
€ 0.50 225
172 146
€ 0.75 285
232 206
€ 1.00 345
293 266How this works1) Identify your relevant import duties2) Estimate #SKU/pallet and select your FOB price3) Define your MRP
Price Levels in India
Milk: 45 INR / 1 litre
Chocolates: 80 INR / 100gr
Tropicana: 100 INR / 1 Litre
Axe Deo: 150 INR / 150ml
Nivea Shaving Foam: INR 200 /
200ml
Pasta Sauce: 280 INR / 350gr
Local white wine:550 INR / 750ml
Smirnoff Vodka: 750 INR / 1 Litre
From our Portfolio
Non-Stop:INR 189 (125gr)
VanDerMeulen Melba Toast: INR 125 (100gr)
Antica Cantina:INR 180 (200gr)
Quickbury regular INR 180
Quickbury Sugarfree INR 245
Lonka INR 220
DavelaarINR 400
ThorntonsINR 740
Placement & Promotion
Increase POS Listings (budget) Margins to retailers Nationwide distribution
network Quality products Attractive price points
Increase Sales/POS
Sampling & promoting Brand awareness Shelf placement,
presentation Quality products Attractive price points
Success of a product is determined by 2 factors:1. How many points of sale do you have?2. How many SKU’s per store do you sell?
Listings for MTO MTO charges listing fees
before placement Listing fees are per SKU Listing fees vary and are
highest for new suppliers Listings depending on
perceived product potential by MTO
Listing procedures take 2-4 weeks
Chains Indication/SKU
Spar € 175/-
HyperCity € 250/-
Spencers € 85/-
Natures Basket
€ 450/-
Nilgiris € 200/-
Namdharis € 150/-
General Trade OutletsPro’s of GTO Many more outlets
than MTO No listing fees On average lower
margins Free in-store
promotions possible Easier influenced by
merchandiser
Con’s of GTO Lower sales per store
for imported products Individual supply /
invoicing Sub-distributor needed Irregular in product
portfolio No sales reports No temperature control
Promotions Product Visibility
In-store samplings Floor stickers Posters Danglers Shelf talkers
Expo participations Social media
campaigns
Type Cost indication
In store sampling
€125/ day
Floor stickers € 500 / month
Posters € 350 / month
Danglers € 350 / month
Expo participation
€ 450 / weekend
Social media As per campaign
Market Entry with NexusNovusIntroduction and expansion
NexusNovus Enabling Business in India
since 2007, headquartered in India
Professional and pragmatic partner for SMEs
Market Entry Services Strong nationwide network,
leading to savings in cost & time
Experienced team with Indo-European identity
Unique portfolio: one-stop-shop
NexusNovus Advantage European Management, we understand your
needs and expectations Nation-wide distribution network including 7
distribution centers 5 years of experience in retail Products placed in 90% of all the modern retail
outlets in India Network of merchandisers across all major cities. Negotiation skills in the Indian retail market and
understanding of the business culture Qualified marketing and product promotion team
4 Steps to Success Test
Place products in the shelves of organized and unorganized retail, promote them, collect consumer feedback and measure the actual sales results
EvaluateAnalyze the sales results and consumer feedback and see what implications this has for your product, your price point, your marketing strategy and your business development approach
PlanBased on the evaluation, plan a detailed strategic approach on how to grow in the Indian market
ExpandAfter a successful test, activate all other major cities in India, increase the number of activations of MTO’s, GTO’s and Specialty Stores/Institutions, and support the retail activation with marketing and promotion activities
Test, Promote, EvaluateOur job Shortlisting 5 SKUs with the manufacturer Calculating the MRP of the products Transport and duty clearance of the 2 pallets Coordinating and executing a pilot study in India in
approximately 20 MTO outlets of 3 chains, 10-15 GTO outlets, and 5 Specialty Stores
Organizing and executing in-store promotion activities and samplings
Promoting the products through online media and events Providing detailed sales results overview every 2 weeks Creating a detailed evaluation report and expansion strategy at
the end of the pilot Participating in events Bearing all other direct and indirect costs: Domestic transport,
warehousing, personnel, management, shop visits etc.
Your job Shortlisting 3-5 SKUs along with
NexusNovus for which the pilot will be executed
Supplying approximately 400-500 products per variety, Free of Cost
Labeling the products as per the Indian Weight & Measurement requirements
Support for activation budget
Test, Promote, Evaluate
For enquiries:
Contact:Victor EveleensDirector I&[email protected]+91 80 6535 3528