Business Trends in Advertising Industry

Topics: Retailing, Automotive industry, Online shopping Pages: 7 (1747 words) Published: August 16, 2013

Retail industry, being the fifth largest in the world, is one of the sunrise sectors with huge growth potential and accounts for 14-15% of the country’s GDP. According to the Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. The recent announcement by the Indian government with Foreign Direct Investment (FDI) in retail, especially allowing 100% FDI in single brands and multi-brand FDI has created positive sentiments in the retail sector.

Emerging areas –
Some sectors that occupy a prominent position with the retail industry are:

Apparel Retail: Everybody understands the impact of fashion and textiles on the environment. Almost $19.5 billion were spent on online apparel shopping in the year 2009 and increasing since then. Fashion & Lifestyle Retail: In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the retail to grow faster. Food & Beverage Retail: Backed by huge potential and changing lifestyles, the food and beverage retail market is growing at a robust 30-35 per cent per year. Pharmaceutical Retail: Driven by therapies like anti-diabetic, vitamin, anti-infectives and dermatology, it accounted for a robust 15% growth in 2011. E-commerce or E-tailing – the next big revolution: With the advent of e-commerce in the retail industry, retail stores are facing stiff competition from e-stores. The rising demand for e-shopping has lead to a new debate cropping up in the world.  

Factors driving growth are-
* Emergence of nuclear families
* Falling real estate prices
* Growing trend of double-income households i.e. Large working population * Increase in disposable income and customer aspiration
* Low share of organized retailing
* Growing liberalization of the FDI policy in the past decade


This industry is one of the key drivers of economic growth of the nation. Since the delicensing of the sector in 1991 and the subsequent opening up of 100 percent FDI through automatic route, Indian automobile sector has come a long way.

The auto sector reported a robust growth rate of 26 percent in the last two years (2010-2012). The BSE AUTO Index outperformed the benchmark Nifty by 79%, 12% and 19% in FY10, FY11 and FY12, respectively.

The world standings for the Indian automobile sector, as per the Confederation of Indian Industry, are as follows:

* Largest three-wheeler market
* Second largest two-wheeler market
* Tenth largest passenger car market
* Fourth largest tractor market
* Fifth largest commercial vehicle market
* Fifth largest bus and truck segment

Current market –
India is emerging as a strong automotive R&D hub with foreign players like Hyundai, Suzuki, General Motors setting up base in India. However, the sector has shown a sluggish growth of 12 percent in 2012. The trend is likely to stay with a 10 percent growth outlined for 2013 citing high ownership costs (fuel costs, cost of registration, excise duty, road tax) and slow rural income growth.

However, from a long-term perspective, rising incomes, improved affordability and untapped markets present promising opportunities.

The Government recognizes the impact of the sector on the nation’s economy, and consequently, the Automotive Mission Plan 2016 launched by it seeks to grow the industry to a size of US $145bn by 2016 and make it contribute 10 percent to the nation’s GDP.

Factors that will drive growth in the sector -
* Rising incomes among Indian population will lead to increased affordability, increasing domestic demand for vehicles, especially in the small car segment. * Fuel economy and demand for greater fuel efficiency is a major factor that affects consumer...
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