g 3 inclusive growth - by h.m. bharuka
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INCLUSIVE GROWTH
By H.M. BharukaKansai Nerolac Paints
4 P’s OF INCLUSIVE GROWTH
PARTICIPANTS/PLAYERS
PLACE
PEOPLE
PRODUCTS
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATION DEALERS/RETAILER
PAINTERS
VENDORS
70% -ORGANIZED SECTOR70% -ORGANIZED SECTOR
30%- UNORGANIZED SECTOR30%- UNORGANIZED SECTOR
MANUFACTURERS
UPGRADED MARKET OFFERINGS
SUSTAINABILITY
WORK ENVIRONMENT
TECHNOLOGY
PROXIMITY TO CUSTOMER
ADAPTIBILITY
OFFERS AFFORDABLE SUBSTITUTESBENCHMARK
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATIONDEALERS/RETAILER
PAINTERS
VENDORS
VENDORS
ORGANIZED UNORGANIZED
VALUE 65%
VOLUME 52%
VALUE 35%
VOLUME 48%
TECHNOLOGYTECHNOLOGY
INNOVATION
INDIGINEOUS
COLLABORATION/EDUCATION
CAPACITYCAPACITY
INCREASE CAPACITY IN SYNC WITH INDUSTRYINCREASE CAPACITY IN SYNC WITH INDUSTRY
SERVICESERVICE
INFRASTRUCTURE
I.T
LOGISTICS
INFRASTRUCTURE
I.T
LOGISTICS
SUSTAINABILITYSUSTAINABILITY
COMPLIANCE
AWARENESS
COMPLIANCE
AWARENESS
SURVEY – INVESTMENT IN R&D, IT AND SHE
FOCUS ON ADVANCED TECHNOLOGY
INCREASED CAPACITY WORLD CLASS SERVICE
SUSTAINABILITY
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATIONDEALERS/RETAILER
PAINTERS
VENDORS
DEALERS/RETAILERS
GROWTH
PROFIT
CURRENT SCENARIOCURRENT SCENARIO
SMALL SIZE DEALERS
Sales Value< 10 LakhsNo. of Dealers
20800
Sales Value< 10 LakhsNo. of Dealers
20800
Net Profit 8%
Net Profit 8%
MEDIUM SIZE DEALERS
Sales Value< 50 LakhsNo. of Dealers
11000
Sales Value< 50 LakhsNo. of Dealers
11000
Net Profit6%
Net Profit6%
LARGE SIZE DEALERS
Sales Value > 50 LakhsNo. of Dealers
3200
Sales Value > 50 LakhsNo. of Dealers
3200
Net Profit5%
Net Profit5%
With Establishment CostNet Profitability
3%
With Establishment CostNet Profitability
3%
With Establishment CostNet Profitability
3%
NET PROFIT > Rs. 5 lacs
NET PROFIT Rs. 1 – 3 Lac
NET PROFIT < 1 Lac
DEALER SURVEY
DEALER
71% 62%Less Profitable
Less Profitable
No Second GenerationNo Second Generation
AMBIENCEAMBIENCECURRENT
THE WAY FORWARD
ATTRACT THE NEXT GENERATION DEALERS
IMPROVED PROFITABILITY OF DEALERS
MODERN RETAIL FORMATS
FOCUS ON SERVICE
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATIONDEALERS/RETAILER
PAINTERS
VENDORS
GOVERNMENT
NEEDS A FRESH PERSPECTIVEBe seen as a Protector
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATIONDEALERS/RETAILER
PAINTERS
VENDORS
ASSOCIATIONUNITY
Government- Change of Approach
Systematic Registration
Approach
Focus on Accurate data collection
Holding for Small
Players
Research for Common
Cause
Talent pool Providers
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATION DEALERS/RETAILER
PAINTERS
VENDORS
SOCIETY
VIEWS OF SOCIETY
INCONVENIENCE
SUBSTITUTES
PARTICIPANTS/PLAYERS
MANUFACTURERS
SOCIETY
GOVERNMENT
ASSOCIATIONDEALERS/RETAILER
PAINTERS
VENDORS
PAINTERS
PETROL PUMP CASE STUDY
1900’s
2011
POVERTY
HEALTH
4 P’s OF INCLUSIVE GROWTH
PARTICIPANTS/PLAYERS
PLACE
PEOPLE
PRODUCTS
REACHREACH
ALL INDIAPopulation
117 Cr
Per Capita Consumption
1.5 Kg
URBAN INDIA
Population 32.7 Cr
Per Capita Consumption
3.6 Kg
RURAL INDIA
Population 84 Cr
Per Capita Consumption
0.7 Kg
4 P’s OF INCLUSIVE GROWTH
PARTICIPANTS/PLAYERS
PLACE
PEOPLE
PRODUCTS
TOTAL SHARE OF POPULATION & PAINT DEMAND
2005 2025
Total Population:1107 mn
Total Population:1107 mn
Total Population:1429 mn
Total Population:1429 mn
Paint Consumption for Middle class to super rich
1107 mnLiters
Paint Consumption for Middle class to super rich
1107 mnLiters
Paint Consumption for Middle class to super rich
12289 mn Liters
Paint Consumption for Middle class to super rich
12289 mn Liters
Low Quality / Economy Paints
Low Quality / Economy Paints
Economy / Medium Quality Paints
Economy / Medium Quality Paints
Premium PaintsPremium Paints
Super Premium PaintsSuper Premium Paints
RKMRKM
Population growth
27%CAGR-13%CAGR-13%
4 P’s OF INCLUSIVE GROWTH
PARTICIPANTS/PLAYERS
PLACE
PEOPLE
PRODUCTS
CHINA COATINGS MARKETINDIA COATINGS MARKET
Other Segmentslike
Industrial, Powder ,Refinish should contribute more to the industry and
be in sync with the World Paint Market
GDP growth momentum to continue at above 7% YOY for next 3 decades.GDP growth momentum to continue at above 7% YOY for next 3 decades.
Per capita income crossing threshold of $1000Per capita income crossing threshold of $1000
Nuclear family to increase as dependency ratio droppingNuclear family to increase as dependency ratio dropping
Working population (at 65%) expected for next 3 to 4 decades..Working population (at 65%) expected for next 3 to 4 decades..
Population in absolute terms increasing from 1100 mn to 1400 mn by 2025Population in absolute terms increasing from 1100 mn to 1400 mn by 2025
Increase in middle class, upper middle class and rich Increase in middle class, upper middle class and rich
INDIA – A BRIGHT FUTUREINDIA – A BRIGHT FUTURE
KEY TAKEAWAYSKEY TAKEAWAYS
The prospects of the Indian Paint Industry look bright
Profitability in distribution channels like dealers and painters
Unorganized Sections should get Organized rapidly
Make Paint Industry appealing for consumers and best talent
Hence Inclusive Growth is the Answer