Market Research Report : Reverse Logistics Market in India 2012

Insert Cover Image using Slide Master ViewDo not distort

Reverse Logistics Market – India

December 2012

2

SAMPLE

Executive Summary

Market

Need for Reverse Logistics

Drivers & Challenges

Competition

Drivers Government Concern for Sustainability

Garnering Customer Satisfaction

Growing Consumerism among Indians

Economic Viability of Reusing Goods

Challenges Low importance given to returns management

Infrastructural bottlenecks

Warehouse space deficit

REVERSE LOGISTICS MARKET IN INDIA 2012.PPT

• The Indian logistics market comprises approximately A% of the global logistics market in value terms• The reverse logistics market is currently valued at INR X1 bn and is expected to reach INR X2 bn in 20‐‐ at a CAGR of X%

• The reverse logistics market is currently experiencing a major share of demand from A zone of India followed by B zone of India

• Possible Reasons for Return of Goods• Reverse Logistics – With and Without• Reverse Logistics Significance • Reverse Logistics – Needs and Associated Benefits

SectoralSnapshots

• Retail Market • Electronics Market

• Automobile Market • Pharmaceutical Market

Player HPlayer GPlayer FPlayer E

Player DPlayer CPlayer BPlayer A

Key Players

3

SAMPLE

• Introduction

• Forward & Reverse Logistics: Comparison

•Market Overview

•Distribution Channel

•Need for Reverse Logistics

• Reverse Logistics Models

• Industry‐wise Outlook

•Drivers & Challenges

• Key Issues

• Technology Adoption

• Recent Trends

• Competition

• Strategic Recommendations

•Appendix


4

SAMPLE

Logistics primarily deals in transportation and storage operations and is significantly aided by value added services

•The logistics sector comprises 3 major segments – Transportation, Storage and Value‐added services•The growing Indian economy has a positive impact on players operating in storage and value‐ added services segments, while in the transportation segment, container train and project logistics is projecting a promising future outlook

TRANSPORTATION

Container Rail Transport

STORAGE

Road Transport

Express Logistics

Coastal Shipping

Cold Chain

Project Logistics

Modern Warehousing

Logistics Park

Inland Container Depot

Container Freight Station

Port

Freight Forwarding

3PL/4PL

Courier Services

LOGISTICS SECTOR

VALUE ADDED SERVICES

Reverse Logistics


5

SAMPLE Need for reverse logistics is conceived primarily from economic and environmental perspectives

Process of planning, implementing and controlling the efficient and cost effective flow of raw materials, in‐process inventory, finished goods and related information, from the point of consumption to the point of origin, for the

purpose of recapturing value of proper disposal

Process whereby companies can become more environmentally efficient through recycling, reusing, and reducing the amount of materials used

Economic Perspective

Environmental Perspective

REVERSE LOGISTICS


6

SAMPLE

Reverse logistics market is on a gradual growth path with manufacturers realizing its significance

•The Indian logistics market comprises approximately f% of the global logistics market in value terms•Growing Indian economy is having a strong impact on both forward as well as reverse logistics Industry experts are of the opinion that approximately 4% to 40% of products go through a return journey India has recorded an approximate return rate of m%

•The reverse logistics market is estimated at INR X1 bn in 20‐‐ and is expected to reach INR X2 bn in 20‐‐ at a CAGR of X%•Automotive, retail, pharmaceutical and electronics are key sectors driving the demand for reverse logistics Business houses spend approximately e‐f% of their logistics expenses on reverse logistics

• Reverse logistics essentially encompasses customer pick‐up, call center management of returns, warranty management, repairing, refurbishing, repacking of returned items, and resale of refurbished items to the end customer

Market Overview

0

500

1,000

1,500

INR units

X%

20‐‐e

X6

20‐‐e

X5

20‐‐e

X4

20‐‐e

X3

20‐‐e

X2

20‐‐

X1

Market Size and Growth (Value‐wise)


7

SAMPLE

Economic and environmental perspectives associated with reverse logistics…

Reverse logistics by non‐governmental

organizations (NGOs)

•Public interest organizations are operating in this space towards reusing and disposing

low value goods such as municipal waste which is expensive to recycle

•Opportunity exists for NGO’s as it becomes extremely difficult for the government to

solely mobilize all waste material through reveres logistics

•Example ‐ SAAHAS, a Bangalore based voluntary organization, is committed to finding

solutions to problems related to solid waste management

• In this mode, reverse logistics is established and managed by large manufacturers who have the resources and available finances to execute its operations in this space

•Goods covered under reverse logistics operations include product returns (inventory returns, warranty returns, damaged goods), product recalls, recycling, reuse of materials, waste disposal, repair and remanufacturing

•Large amounts of initial investment is need to set up this huge and fragmented kind of self owned reverse logistics operations

•Example ‐ Future Group has its own logistics setup which is providing reverse logistics services to its indigenous companies including Big Bazaar, Pantaloon etc.

Corporate self owned

reverse logistics


8

SAMPLE Industry‐wise Outlook – Summary

Pharmaceutical Industry

Retail Industry

ConsumerElectronicsIndustry

Auto Industry

CURRENTLY OPERATIVE


9

SAMPLE

Consumer electronics and durables segment is enjoying increased demand due to technological advancements

Electronics Market – Overview

• The consumer electronics and durables market is growing at a phenomenal pace

• Young demographic population, rising disposable income, easy finance options along with growing prominence of consumer electronics retail stores and online retail industry are the key drivers for the industry

Consumer Electronics and Durables

0

200

400

600 B

20‐‐

A

INR bn

M%

20‐‐e

C

0

5,000

10,000

15,000

20,000

‘0007%

20‐‐

S2R2Q2

P2

20‐‐

S1R1

Q1

P1

SRQP

Sales Trends in Consumer Electronics

Consumer Electronics and Durables Market Segmentation

White BrownConsumer Electronics

•Air Conditioners

•Refrigerators

•Washing Machines

•Microwave Ovens

•Chimneys

•Fans

•Electric Irons

•Juicers

•Mixer and Grinders

• Television sets

• Set Top Boxes

• Audio and Video Players

• Personal Computers

• Laptops and PCs

• Cell Phones

• Digital Cameras

• Camcorders


10

SAMPLE

Forward and Reverse Supply Chain in Electronics Sector

Raw Material

Part Fabrication

Assembly

Parts Assembly

Distribution

Consumers

Refurbish

Forw

ard Logistics Flow

in Electronics Sector

Reverse Logistics Flow

in Electronics Sector

Remanufacture

Recycle

Landfill

Secondary Markets(in case of resell due to outdating)


11

SAMPLE

Drivers & Challenges – Summary

Drivers

Government Concern for Sustainability

Garnering Customer Satisfaction

Growing Consumerism among Indians

Economic Viability of Reusing Goods

Challenges

Low Importance Given to Returns Management

Infrastructural Bottlenecks

Warehouse Space Deficit


12

SAMPLE RLMS addresses core reverse logistics requirements that help in easy identification and repair of defective products

Reverse Logistics Management System (RLMS)

Process and Benefits

• Improved customer satisfaction

•Reduced Turn Around Time

•Advanced planning in warehouses

•Reduced transportation costs

•Advanced tracking functionality

•Decision‐making on product types and easy identification of defective parts

•A web‐based application that captures all commodity related information from warranty to final disposal• It is a configurable and scalable solution that enables after sales management of goods sold•Cost of installation depends on the number of users and operation period allotted by the client company – the cost may range anywhere between INR 1.5 mn to INR 4 mn as per the requirement

•The RLMS can be installed by either the manufacturing company or by reverse logistics service provider

ProcessBe

nefits


13

1,600

18,000

Net Profit/Loss

‐2,000

400

2,000

200

4,000

0

6,000

‐200

8,000

‐400

Total Income

20,000

600

800

10,000

1,000

1,200

1,400

12,000 14,000 16,0000

Player C

Player B

Player A

Player CPlayer BPlayer A

Size of the Bubble represents Market Capitalization in INR units

Major Private Companies – Summary

SAMPLE


14

SAMPLE

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Player A

5th Road, 6th Street,

City A – 700 xxx

Tel No. 91 22 6679 xxxx

Fax No. 91 22 6679 xxxx

Website www.playera.com

Year of Incorporation 19‐‐

Ticker Symbol 53xxxx (BSE)

Stock Exchange Bombay Stock Exchange

Name Designation

Person A MD

Person B CFO

Person C CEO

Head Office

Public: Domestic Company – Player A (1/3)

City X

Category Products/Services

Freight forwardingProvides air, sea and road freight forwarding services

LogisticsPlanning and implementation of supply chain solutions

Warehousing and Distribution

Provides facility management, inventory management and material management solutions


15

SAMPLE

Financial Snapshot Key Ratios

Financial Summary

• The company incurred a net loss of INR d units in FY 20‐‐, as compared to net loss of INR c units in FY 20‐‐

• The company reported total income of INR R4 units in FY 20‐‐, registering an increase of m% over FY 20‐‐

• The company earned an operating margin of f% in FY 20‐‐, an increase of g percentage points over FY 20‐‐

• The company reported debt to equity ratio of d in FY 20‐‐, a decrease of h% over FY 20‐‐

Net Profit/LossTotal Income

INR units

‐20

‐40

‐60

‐80

INR units

250

200

150

100

50

020‐‐

dR4

20‐‐

cR3

20‐‐

b

R2

20‐‐

a

R1

Private: Foreign Company – Player A (2/3)

Particulars y‐o‐y change (20‐‐to‐‐)

20‐‐ 20‐‐ 20‐‐ 20‐‐

Profitability RatiosOperating MarginNet MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on AssetsReturn on Fixed Assets

Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity RatiosCurrent RatioCash Ratio

Leverage RatiosDebt to Equity RatioDebt to Capital RatioInterest Coverage Ratio

Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset TurnoverWorking Capital TurnoverCapital Employed Turnover

Improved Decline


16

SAMPLE

Key Business Segments Key Geographic Segments

Business Highlights

Description News

Overview

Recent Transactions

Reverse Logistics

0%

50%

100%

20‐‐

A

0%

50%

100%

20‐‐

B

XX

Private: Foreign Company – Player A (3/3)


17

Appendix

Ratio Calculations

Operating Margin (Operating Income/Revenues)*100

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin (Income Before Tax / Revenues *100

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

Return on Working Capital (Net Income / Working Capital) *100

Return on Assets (Net Income / Total Assets)*100

Return on Fixed Assets (Net Income / Fixed Assets) *100

Operating Costs (% of Sales) (Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100

Ratio Calculations

Current RatioCurrent Assets / Current Liabilities

Cash Ratio{(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

Debt to Equity Total Liabilities / Shareholders Equity

Debt to Capital Ratio{Total Debt / (Shareholders Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Capital Employed Turnover Sales / Shareholders Equity


SAMPLE

18

Thank you for the attention

About Netscribes, Inc.Netscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.

The Reverse LogisticsMarket – India report is part of Netscribes, Inc. Transportation & Logistics Series.For any queries or customized research requirements please contact:

Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction.

Phone: +91 33 4027 6214/6215E‐Mail: [email protected]

Follow us on:


http://www.facebook.com/researchonindia

https://twitter.com/ResearchOnIndia

http://www.linkedin.com/groups?gid=3280715&trk=hb_side_g

Market Research Report : Reverse Logistics Market in India 2012

Business

Transcript of Market Research Report : Reverse Logistics Market in India 2012