Traditional Trade in India

Topics: Marketing, Marketing research, Economics Pages: 5 (560 words) Published: March 19, 2011
June 2009

Selling and Distribution in India
Opportunities and Challenges associated with Traditional Trade Strictly Private and Confidential

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Introduction to Boston Analytics Objective of Presentation Consumer Market in India Overview Urban-Rural Dynamics Traditional Trade in India Introduction to Traditional Trade Traditional Trade Distribution Emerging Trends Challenges and Initiatives


Company Overview
• Boston Analytics (BA) is headquartered in Boston, MA with the majority of its staff located in India • BA provides fully customized research and analysis to corporations, financial institutions, corporations, government agencies and professional services firms • We serve clients located around the world and study markets around the world • BA services can be segmented into three areas: 1 Research and Analytics Services

Industry studies Market segmentation and dimensioning Company and market analysis Financial modeling and valuation Risk assessment and predictive modeling

India Specific Work
• Indian Consumer Sentiment Index • Business Cycle Leading Indicators • India stock market Indices • Business research and consulting services • Syndicated reports

2 Innovative Products & Solutions (IPS)
Asset management tools Management dashboards Crystallizer Quantitative Market Research (QMR) solutions

3 Macro Economic Analyses
Sentiment indices Market indices Syndicated sector reports Customized analysis on above


Introduction to Traditional Trade
Objective of Presentation
The objective of this presentation is to present a picture of the opportunities and challenges associated with sales and distribution via traditional trade in India, which represents over 90% of the total consumer product trade

Definition of Traditional Trade
Traditional Trade is defined as all that trade that flows through traditional outlets, such as kiosks, corner shops, local mom and pop shops, open markets, etc. It represents all trade with the exception of that which flows through retail chains, supermarkets, or super stores

Key Characteristics
Traditional trade is characterized by a large complex network of independently owned retailers and distributors carrying primarily local or regional brands. It is the prevailing form of consumer trade in emerging markets. It can be difficult to penetrate for both national and multinational firms given its highly fragmented nature, yet it serves as the conduit for reaching the largest percentage of the consumer population

Traditional Trade Categories Food and Beverages Clothing and Textile Consumer Durables Jewelry and Watches Home Décor and Furnishing Personal Care Footwear Books, Music and Gifts


Consumer spending represents a large percentage of India’s GDP unlike other developing countries such as China Components of Real GDP 2008–09*(1)
Components INDIA % of GDP USA % of GDP China % of GDP

Indian Personal Consumption Growth (2005–2025E) ($ B)(2)
CAGR 5.8%

Personal Consumption Expenditures (durables + non-durables + services)

62% 71% 36%

Investment Expenditures Government Expenditures Net Exports (exports imports) Other GDP *Estimates












Personal Disposable Consumption Income growth 2005 Growth in Number of Households Incremental Personal Savings Consumption 2025E

0% 100%

0% 100%

1% 100%

Contribution to overall consumption growth




Source: (1) Bureau of Economic Analysis, Ministry of Statistics and Programme Implementation. (2) The ‘Bird of Gold’: The Rise of India’s Consumer Market, McKinsey Global Institute. 4

Largest proportion of retail spending comes from innumerable small towns and villages with a population 1 Million) 27 Cities 37 72






Large Cities (Pop 0.5–1 Million) 32 Cities





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