Indian Market Overview
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Transcript of Indian Market Overview
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8/14/2019 Indian Market Overview
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Strictly private and confidential
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Strictly private and confidential
Overview of Indian Wine Industry
November 2008
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Strictly private and confidential
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Indian Market Section 1
Section 1Indian Market
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Indian Market Section 1
Area 3.29mm km 2, Kashmir region included
Population1.148 bn inhabitants (worlds second largest nation by inhabitants)349 inhabitants per km 2
Capital city Delhi
Government Parliamentary Democratic Republic
Administrativestructure Union of 28 states and 7 union territories (Andaman and Nicobar islands, Chandigarh, Dadra & Nagar Haveli,Daman & Diu, Delhi, Lakshadweep, Pondicherry)
GDP$2,966 bn (2007) by PPP$1,099 bn (2007) by exchange rate
Currency Indian Rupee (INR; Rs)
Languages Hindi, 17 other local languages, English
Religions Hindu (80%), Muslims (14%), Christians (2.4%), Sikh (2%), Buddhists (0.7%), Other (0.9%)
Time zone GMT + 5:30
Taxation 33.7% corporate tax, 12.5% VAT (for most commodities) and tax exemption for f irst 10 years inSpecial Economic Zones
Country riskMoodys: Baa2S&P: BBB-Fitch: BBB-
Source: CIA Factbook, EIU
India at a glance
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Indian Market Section 1
Ranking of GDP growth 2006 2020 (% p.a.)
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
India
Malaysia
China
Thailand
Turkey
Ireland
Indonesia
Korea
Mexico
Chile
U.S.
Brazil
Germany
Japan
Source: Deutsche Bank Research, Formel-G
India is leading the way in GDP growth
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Indian Market Section 1
GDP Growth (USD in millions) GDP in PPP
505591
695
812915
1,140
1,270 1,313
0
200
400
600
800
1,000
1,200
1,400
2002 2003 2004 2005 2006 2007 (a) 2008 (a) 2009 (a)
13,000
10,500
3,870
2,700
1,850
1,700
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
(1) U.S.
(2) China
(4) India
(5) Germany
(9) Russia
(10) Brazil
( a) Es tima te .Source: Economy.com, Global Insights Nov 08 Source: IMF WEO
Inflation Levels Forex reserves ($ billion)
13.10%
3.00%
5.10%
2.30%3.50%
5.80%
4.40%
8.20%
6.80%
4.70%
6.40%
2.50%
5.20%
5.00%
6.80%
4.80%
5.90%
2.50%
7.20%5.20%
5.50%6.50%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
CP I WP I
26 29 3238 42
5474
119140
177
276
0
50
100
150
200
250
300
FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
Source: CMIE, Global Insight Nov 08 Source: Indiastat.com, RBI
Strong fundamentals exist
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Indian Market Section 1
FDI flow into India A.T. Kearney FDI confidence index 2007
6.0
15.7
16.9
15.3
17.5
14.5
8.1
4.5%
2.5%2.9%
3.1%
1.8%
2.1%
2.8%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2002 2003 2004 2005 2006 2007E 2008E
F o r e i g n
i n v e s t m e n
t ( $ b n )
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
F or ei gni nf l ow
% of GDP
Foreign investment Capital inflow
2.21
2.09
1.86
1.81
1.78
1.78
1.75
1.72
1.70
1.70
1.63
1.61
1.59
1.57
1.56
0.00 0.50 1.00 1.50 2.00 2.50
1 (1) China
2 (2) India
3 (3) U.S.
4 (4) UK
5 (10) Hong Kong
6 (7) Brazil
7 (18) Singapore
8 (22) United Arab Emirates
9 (6) Russia
10 (9) Germany
15 (15) Japan
18 (*) South Africa
20 (13) Turkey
23 (24) Central Asia
25 (12) Czech Republic
(0 low 3 high confidence)
( ) = 2006 rank.Source: UNCTAD, Morgan Stanley Research Source: A.T. Kearney
India has gained strong standing in the internationalinvestor community
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Indian Market Section 1
Population by age (millions of persons)Population of large urban
communities(millions of persons)
40% 34% 32% 30%
43% 45% 47% 47%
7% 9% 10% 11%5% 6% 6%5% 6% 5% 5%
6%
0%
20%
40%
60%
80%
100%
120%
1996 2001 2006E 2010E0 14 15 34 35 44 45 54 >55
700 1,000 1,110 1,200
3.9%
7.4%
4.6%
1.8%
CAGR435
380
330286
0
100
200
300
400
500
2000 2005 2010 2015
CAGR: 2.9%CAGR: 2.7%
CAGR: 2.9%
Indian middle class breakdown (2002) Indian middle class breakdown (2010E)
High, 1%Upper middle, 5%
Middle, 22%
Low, 72%
F2002 188 million households
High, 1%Upper middle, 5%
Middle, 22%
Low, 72%
F2002 188 million households
High, 4%Upper middle, 7%
Middle, 26%
Low, 66%
F2010E 222 million households
High, 4%Upper middle, 7%
Middle, 26%
Low, 66%
F2010E 222 million households
Note: Definitions (at F2002 prices):Low Up to $1050.Midd le $1050 $4200 .Upper middle $4200 $10,500.High $10,500 & above.
Source: Morgan Stanley, Value Partners
Large working population and growing middle classcontributing to overall growth
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Indian Market Section 1
Current market statistics (as of Mar 2008) Savings and investments
Market capitalization ($bn) 1277Average daily volumes ($bn)
- Cash- Derivatives
Total domestic mutual fund assets ($bn) 125.5
FII ownership (% of market cap) 1.2%
Saving (F2007, % of GDP) 38.0%
Gross capital formation (F2007, % of GDP) 39.4%
Level of gross FDI (F2007, $bn) 22.1
FDI as % of GDP, (F2007) 2.6%
National income statistics Composition of GDP (F2007, %)Nominal GDP (F2007, $bn) 838
Population (F2007, millions) 1,122
Population growth (F1995 2007, % CAGR) 1.8%
Per capita GDP (F2007, $) 747
Nominal US$ GDP per capita growth(F1995 F2007, %)
12.5%
Agriculture and allied activities 18%Agriculture 17%Mining and quarrying 3%
Industry 21%Manufacturing 16%Electricity, gas and water supply 2%Construction 8%
Services 61%Trade, hotels, transport and communications 25%Financing, insurance , rea l est . and bus. services 14%Community, social & personal services 13%
Source: RBI Economic Survey 2007-2008
Facts and figures: economy and markets
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Indian Market Section 1
Market Value (20032007) Market Volume (20032007)
$14.3$16.1
$18.3$20.7
$23.5
13.7%
13.1%13.5%
12.6%
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2003 2004 2005 2006 2007
M a r k e t v a l u e ( $ b i l l i o n )
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
15.0%
% gr ow
t h
Market Value ($ billion)% growth
CAGR: 13.2%
3.6 3.94.2 4.4
4.7
7.3%7.6%
6.6% 6.7%
0.0
1.0
2.0
3.0
4.0
5.0
2003 2004 2005 2006 2007 M a r k e t v o l u m e ( L i t e r s b i l l i o n )
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
% gr ow
t h
Market volume (Liters billion)% growth
CAGR: 7.0%
Market Segmentation (2007) Market Share (2007)
Spirits88.4%
Wine0.8%Beers, ciders
and FABS10.8%
Other 75.5%
SABMiller plc7.8%
Millenium Alcobev6.4%
UnitedBrew eries Limited
10.3%
Source: Datamonitor
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Indian Market Section 1
Distribution (2007)
Specialistretailers46.6%
On-trade41.5%
Other 2.8%
Supermarkets/hypermarkets
9.1%
Source: Datamonitor
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Indian Market Section 1
Domestic Key Player
Established in 1982
Located in Narayangaon, Pune
Key Brands: Marquise de pompadour, Ivy, Joie, Chantilli,Figueira, Riviera, Vino Sparkling, Vin Ballet, Hammer
Production capacity of 15 million liters
Total Revenue: $53.4mm (2007-08)
Investors: Arisaig Partners, Reliance Capital Private Equity
Established in 1997
Located on the outskirts of Nashik
Key Brands: Dindori Reserve Shiraz, Sula Red Zinfandel, SulaCabernet Shiraz , Satori Merlot, Madera Red, Sula SauvignonBlanc, Sula Chenin Blanc, Madera White, Viognier, Dia White
Sales: Over 2 mm bottles in 2007-08
Total Revenue: $2.3mmInvestors: Future Capital Holdings, GEM India Advisors
Established in 1988
Located in Nandi Hills, Bangalore
Key Brands: La Rserve, Sauvignon Blanc, Cabernet Shiraz,Shiraz Rose, Viognier and Clairette
Production capacity of 2.1 million liters
Total Revenue: $4.6mm
Investors: n/a
Source: Company websites
International Key Player
Established in 1743
Located in Epernay Marne, France
Key Brands: Brut Imprial, Brut Imprial Ros, MillsimeBlanc 1998 & 1999, Nectar Imperial
Total Revenue: $1,173.9mm (2007)
Source: Company websites
Indian Wine Market Competitive Landscape
Market Share (2006)
Others29%
SamantSoma18%
Grover Vineyards
9%
IndageChampagn
44%
Source: Euromonitor
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Indian Market Section 1
Industry Overview Trends
The Indian wine market only makes up 0.8% of the entire Indian alcoholsegmentThe Indian wine market has an estimated size of $265mm and 11mmliters in terms of volumeThe industry has been growing steadily by 32% (2002-2007) and isestimated to grow by an additional 32% over the next 5 years (2007-2012)The countrys 3 main wineries include Sula vineyards, Chateau Indagevineyards and Grover vineyards the three players together contribute ~90% of the marketFive-star hotels, pubs and bar-cum-restaurants are the primary wineselling outlets in the country as 63% of the sales are through thesechannels
The Indian wine industry is on an upswing as production andconsumption are expected to increase by ~32% over the next 5 yearsAs the industry grows, new players such as Seagram and United Spiritshave entered the market (2007). While a number of other players suchas Diageo are said to be keen on entering as wellWith a low set up cost for a wine plant between Rs.1015mm ($0.2$0.3mm) with a capacity of 100,000 liters, competition and the overallmarket are expected to increaseAs wine consumption is still in its infancy, manufacturers are providingwine at economical prices
wine in the Rs300-500 price range make up ~59% of wines soldHowever, ~80% of wine consumption is confined to major cities likeMumbai (39%), Delhi (23%), Bangalore and Goa. The non urban areasstill account for only 20% of the market
Market Value (20022007) Market Value (20072012)
$147
$197
$112
$82$62$49
23
35
6
8
0
50
100
150
200
250
2002 2003 2004 2005 2006 2007
M a r
k e t V a l u e
( $ m
i l l i o n s )
0
1
2
3
4
5
6
7
8
9M
ar k e t v ol um
e ( L i t er s mi l l i on )
Still light g rape w ine Sparkling wine
Fortified w ine & vermouth Market volume (Liters million)
CAGR: 32%
$197$265
$360
$479
$795
$624
811
15
20
26
33
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012
M a r
k e t V a l u e
( $ m
i l l i o n s )
0
5
10
15
20
25
30
35M
ar k e t v ol um
e ( L i t er s mi l l i on )
Still light g rape w ine Sparkling wine
Fortified w ine & vermouth Market volume (Liters million)
CAGR: 32%
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews, Rabobank research dated February 2008, press
India Wine Market Overview
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Indian Market Section 1
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Indian Market Section 1
Sales of Wine by Sub sector (2007) Forecast Sales of Wine by Sub sector (2012)
Sub Sector
TotalValue
($ mm)
TotalVolume
(Liters mm)Still light grape wine 154.7 7.2
Still Red Wine 72.9 3.6Still White Wine 81.8 3.6Still Rose Wine _
Sparkling wine 37.5 0.5Champagne 28.0 0.1
Other sparking wine 9.5 0.3Fortified wine & vermouth 4.5 0.5
Port / Oporto 4.5 0.5Sherry _ Vermouth _
Nongrape wine _ _ Total 196.7 8.2
Sub Sector Total Value
($ mm)
TotalVolume
(Liters mm)CAGR
(2007-2012)Still light grape wine 686.9 30.5 34.7
Still Red Wine 326.7 15.4 35.0Still White Wine 360.2 15.1 34.5Still Rose Wine 0.0 _ _
Sparkling wine 97.6 1.1 21.1
Champagne 73.9 0.3 21.4
Other sparking wine 23.7 0.8 20.0Fortified wine & vermouth 10.9 1.2 19.6
Port / Oporto 10.9 1.2 19.6Sherry _ _ _ Vermouth _ _ _
Nongrape wine _ _ _
Total 795.4 32.8 32.2
Regional Consumption Share of Price Segment
Maharashtra37%
Delhi25%
Karnataka12%
Goa10%
Other 16%
INR200 600
75%
INR < 20015%
INR600 800
6%
INR > 8004%
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
Wine Segmentation (2007)
Red45%
White25%
Fortified15%
Sparkling8%
Ros7%
Source: Industry Estimates
India Wine Market Overview (continued)
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Indian Market Section 1
India has a familiaritywith French wine asthey are the largest
importer of wine
Wine Imports by Country of Origin: Total Value (2006)
France44%
United ArabEmirates
2%
Germany3%
SouthAfrica
1%
UnitedKingdom
7%
USA5%
OtherCountries
7%
Argentina3%
Australia12%
Chile2%
Italy14%
Source: GTIS
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Indian Market Section 1
Market Value (20022007) Market Value (20072012)
$11 $15
$38
$29$24
$19
0.2 0.2
0.3 0.3
0.4
0.5
05
10152025303540
2002 2003 2004 2005 2006 2007 M a r
k e t V a l u e
( $ m
i l l i o n s )
0.0
0.1
0.2
0.3
0.4
0.5
0.6 M ar k e t v ol um
e ( L i t er s mi l l i on )
Other sparkling w ineChampagneMarket volume (Liters million)
CAGR: 27%
$57$68
$82$98
$47$38
0.50.6
0.70.8
1.01.1
0
20
40
60
80
100
120
2007 2008 2009 2010 2011 2012 M a r
k e t V a l u e
( $ m
i l l i o n s )
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Other sparkling w ineChampagneMarket volume (Liters million)
CAGR: 21%
Indian Sparkling Wine Market Overview
Price Segmentation (2007)
Rs 650 toRs749
7%
Over Rs75010%
UnderRs549
28%
Rs 550 toRs649
55%
Notes: Under Rs549 ($13.9)Rs550 to Rs649 ($13.9 - $16.4)Rs650 to Rs749 ($16.5 - $19.0)Over Rs750 ($19.0)
Source: Euromonitor International estimates, Official statistics, Tradeassociations, Trade press, Company research, Trade reviews
HNWI Population Growth(2005-2006)
21.2%20.5%
16.0% 15.5% 15.4%
14.1%13.3% 12.9% 12.6% 12.2%
0%
5%
10%
15%
20%
25%
Sin g ap o re In d ia In d on esia Ru ssia Un ited ArabEmirates
SouthKorea
SouthAfrica
I sr ael CzechRepublic
HongKong
H N W I p o p u l a t i o n g r o w t h ( % )
Notes: HNWI (High net worthindividuals)Growth rates and absolute HNWInumbers are rounded.
Source: Capgemini Lorenz curveanalysis, 2007
Overview Brand Share of Champagne (2003-2006)
Consumption of sparkling wine in India is quite low
in 2007, sparkling wine contributed less than 6% of the total volumeof wine sales
Approximately 50% of sales comes from affluent consumers in WestIndia centered in Pune , Mumbai and DelhiThere is little interest in high-priced sparkling wine beyond major citiesand developed states
% Totalvolume Brand Company 2003 2004 2005 2006
Moet &Chandon(LMVH MoetHennessyLouis Vuitton)
Moet HennessyIndia Ltd
54.7 55.7 56.0 56.0
Dom Perignon(LMVH MoetHennessyLouis Vuitton)
Moet HennessyIndia Ltd
43.8 41.5 41.5 42.0
Others 1.5 2.8 2.5 2.0
Total 100.0 100.0 100.0 100.0
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Indian Market Section 1
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
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