Indian Growth Story in Retail

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CONFIDENTIAL

India Growth Story:
Pyramid To Diamond – Rise Of Consuming Class
Arvind Singhal Chairman, Technopak Advisors www.technopak.com Harvard Business School 15th March 2009

India
A nation in transition …

Some Raw Facts …
• Sustained high growth of GDP since 1991 of about 6% per year has led to a fundamental transformation of Indian economy. Some dimensions include:
• 12th largest in the world in 2008 and poised to become the 4th largest in absolute $$$ terms sometime by 2030 • About 300 million Indians pulled out of poverty line in last 20 years, though over 300 million still await their turn • At about US$ 400 Billion in private consumer consumption (retail spending), capable of supporting many multi-billion $$ in revenue size consumer product and services businesses

Some Raw Facts …
• Many growth drivers including:
• Favorable demographics, dropping dependency ratio, and rapidly rising education levels • Steady urbanization • Very promising broad-basing of components of overall gross domestic output, encouraging broad-basing of geographic spread of economic activity, and well-founded optimism on broad-basing of the nature of jobs that match the current skill sets of the population

Some Raw Facts …
• Other encouraging indicators include:
• While India’s growth story has been dented in the aftermath of global developments, the economic system has shown an expected resilience, with no failed financial institutions, no industry wide bankruptcies, no massive layoffs, no significant increase in consumer loan defaults • Surprisingly, though, India’s public sector has shown amazing resilience to withstand the turbulence in the environment • At around 6% - 6.5% GDP growth in current year, and probably >6% in 2010, India will still have a very robust growth in absolute terms

Some Raw Facts …
• With major worries stemming largely on account of:
• Increasing fragmentation of political system,... [continues]

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