India consumer

By Tassos Stassopoulos, Alliance Bernstein

Rapidly ageing societies in developing countries represent important markets for consumer companies. However, it should be understood that vast cohorts of elderly people heading into the sunny uplands of their lives does not necessarily imply a bright future for investors.

It’s easy to overlook the ageing trend in emerging markets. Countries like India and China are home to the world’s youngest populations in terms of size. Yet as birth rates decline and healthcare improves, older people will constitute a growing percentage of the population. In the top 12 emerging markets, the over-65 demographic is growing at an annual rate of approximately 3.7 per cent (see chart) — nearly double the rate in developed countries. Read more

Since April car sales in India have been improving as consumer sentiment picks up following this year’s general election – and August saw the biggest year-on-year jump in this upturn as festival season neared.

Sales of passenger cars were up 15.2 per cent year-on-year in August to 153,758 units, according to data published on Wednesday by the Society of Indian Automobile Manufacturers (Siam), a trade body. Read more

It’s all kicking off in Indian ecommerce. Flipkart, an ecommerce website founded by two former Amazon employees, raised $1bn in equity this week. Amazon itself quickly followed, with an announcement on Wednesday that it was investing a further $2bn in the country.

As competition becomes fierce at the top of the market, beyondbrics went to Bangalore to meet senior executives from Myntra, the fashion retailer that Flipkart acquired this year. Read more

By Nishesh Dalal, KPMG India

With the new Indian leadership focused on accelerating economic growth and with business confidence at a high, some of niche industries are set to receive the much needed impetus to propel growth. One such industrial segment that is gradually enhancing its growth potential is the huge but relatively unheralded dairy sector.

India is the world’s largest milk producer in the world, accounting for over 17 per cent of total production. The Indian dairy market is estimated to be worth $10bn in annual sales, employs over 90m people and provides an important source of nutrition. Read more

By Tassos Stassopoulos, AllianceBernstein

Consumer dynamics in emerging markets are often misunderstood. Although the rise of the middle classes is a defining characteristic of a vibrant, developing economy, the working classes will be the real engines of consumer growth in developing countries.

In other words, the middle classes tell you what has happened. But looking ahead, the fastest growth will be driven by the masses of lower income workers as they improve their lot to join the ranks of the middle class. Read more

The slaughter of cows is banned in many states in India and the export of cow meat is prohibited across the country.

But go to any major Indian city and you will find steaks and beef burgers on the menu in high-end restaurants, a new phenomenon that has has led to confusion and protest alike. Read more

Like this but without the beef

The Whopper is coming to India – and it looks like it will be relatively inexpensive to break into the market.

“My sense is that to build a solid and profitable business as a Burger King franchise in India over the next seven to ten years will require somewhere between $80m to $100m of capital commitment,” says Sameer Sain, managing partner at Everstone Capital, a private equity firm which this month entered a joint venture with Burger King to bring the fast food brand to India. Read more

Those splashes of rouge on India’s street corners? The culprit is paan.

Made of the heart-shape betel leaf, paan is chewed across south Asia as a mouth freshener and thought to help digestion. But the less discourteous of chewers carelessly spit the remnants straight back out, a constant gripe for municipal authorities that has led to repeated demands for a ban on the stimulant.

So, in its own little way, chewing gum brand Center Fresh is doing its bit for society as it launches a new paan flavoured gum. Read more

Lots of cars – not a lot of sales

For the eighth consecutive month car sales fell in India this June. And this time the entire sector is in trouble.

Domestic passenger car sales were down 9 per cent to 139,632 units, from 153,450 units a year earlier, according to data from the Society of Indian Automobile Manufacturers seen by the Press Trust of IndiaRead more

McDonald’s burgers, Bata shoes, Titan watches – household names with stores on most of the India’s main streets. But rather than run the operations themselves, these popular brands are using franchises to access the Indian market – and other businesses are catching on.

Operating via franchise, a business structure where companies licence out the right to sell products or provide services in their name, allows businesses to expand rapidly. A report suggests that total sales made through franchisees in India, valued at $13.4bn in 2012, will quadruple by 2017. Read more

The king of online marketplaces is teaming up with local players as it looks to make headway in India’s unique and growing market.

On Tuesday, eBay said it was going into a commercial partnership with Snapdeal, an Indian online shopping platform set up in 2010, as well as investing in the company. Read more

Some 6 per cent of India’s population lives in slums and these communities have become powerful, both economically and politically. The slum dwellers’ low-end aspirational consumption could now be propping up certain sectors as demand wanes elsewhere.

As a first-time visitor with a textbook image of a slum in mind, standing at Mumbai’s Mahim train station at the threshold of Dharavi, one of Asia’s largest slums, you might expect some demarcation between the formal and informal world. Read more

Shares in Hindustan Unilever, Unilever’s Indian arm, soared around 20 per cent on Tuesday after its Anglo-Dutch parent announced a $5.4bn offer to raise its stake from 52.5 per cent to 75 per cent.

That’s certainly a big vote of confidence in the Indian consumer, as Unilever said in its statement. But it also looks like a response to recent moves to tighten rules on the control majority shareholders can exercise over their Indian subsidiaries. Read more

As beyondbrics reported last week, India’s online user base is now the third largest in the world. Yet, shopping websites haven’t taken off quite as fast as other internet services. India’s rotten infrastructure is usually blamed, with its traffic-blocked roads delaying delivery.

But one company has shown that the challenges can be overcome – at a price. Read more

Ford and WPP have apologised for tasteless ads showing scantily-clad women bound and gagged in the back of a car.

While the images were never published as part of an official campaign, someone at JWT India, Ford’s agency in the country, uploaded them to the sharing site Ads of the World.

From there, they were picked up by sites like Business Insider and quickly drew an outraged response across the web.

 Read more