Market Entry Partnerships Growth

Smart Cities & Urban Development

November 2015

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India Today & Tomorrow

India Today - 2015 India Tomorrow - 2030

•  Total population of 1.2 billion •  Population Growth Rate: 1.28 % •  31% of the population living in urban areas •  Urban areas contribute 60% of the current GDP

•  Total population of 1.4 billion •  Urban population to increase to 590mn •  41% of the population living in urban areas •  Urban area contribution to GDP to be ~75%

India ranks 135 among 182 countries in terms of quality of life

India’s rank may slip further down if the urban infrastructure is not upgraded

SMART CITIES & URBAN TRANSFORMATION ... NEED OF THE HOUR

SMART CITIES Schemes & Projects

100 SMART CITIES Ministry of Urban Development Budget allocation of €140 mn per city

60 GREEN CITIES Ministry of Urban Development 60 Green Cities Project to focus on creating solar driven infrastructure

SMART PORTS Ministry of Shipping Transformation of 12 Port Cities into Smart Cities by creating world-class port

HARIDAY Ministry of Tourism Budget of €710 mn for infrastructure development of 12 heritage cities

INDUSTRIAL CORRIDORS Ministry of Commerce & Industry 5 corridors connecting the main cities

BILATERAL PROJECTS Singapore/Japan/ Spain Capital City of AP under Singapore Varanasi under Kyoto DDA* – Barcelona

OTHER NEW CITIES State Driven Projects 7 Smart Cities Project – MP Naya Raipur – Chattisgarh GIFT – Gujarat

NIRMAY GANGA Namami Gange Program Multi-Stakeholder Programme to clean and maintain Ganga river front towns/ cities

DDA:  Delhi  Development  Authority  

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Smart City Model Key Components : Urban Component

Smart Living

Smart City

Smart Environment

Smart People

Smart Mobility

Smart Governance

Smart Economy

Energy Management • Smart grid and meters • Smart street lighting • Advanced distribution management system with supervisory control

• Solar energy initiatives • Energy-efficient and green buildings

Urban Mobility • Intelligent traffic management systems • Integrated multi-modal transportation • Electric cars • Environment sustainable mobility plans

E- governance and citizen services • Smart online municipal services • M-governance • Participatory government • Single-window clearance for businesses • Disaster management solutions • GIS maps for city departments performance efficiency • Integrated operation among various departments • Data analysis and insight creation

Smart Spaces • Building automation • Micro infrastructure such as sensor networks • Urban heating and cooling systems • Advanced HVAC and lighting equipment

Smart Environment • Green buildings • Green data centres, • Pollution control systems, monitoring toxic gas levels

• Meteorological station network • Earthquake early detection Noise urban maps

Smart Communication • Optical fibre connectivity • City-wide Wi-Fi connectivity

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Smart City Model Key Components : Social Component

Smart Living

Smart City

Smart Environment

Smart People

Smart Mobility

Smart Governance

Smart Economy Water management (Water)

•  Smart meters and management •  Leakage identification and preventive maintenance •  Water quality monitoring

Smart education •  Digital education •  Smart schools or colleges •  Simulation labs and incubation centres •  Student teacher and parents holistic

connectedness

Smart surveillance •  Surveillance cameras and command centres

analytics •  Situational awareness and analysis •  Simulation modelling and crime prevention •  Smart policing •  Home security systems

Smart hospitals • Improved clinical workflows • Telemedicine • Enhanced patient interactions • Certified smart card readers for patient data security • Updated healthcare information systems • M-healthcare

Waste management •  Real-time information of containers and waste bins •  Automated scheduling of waste collection and

disposal •  Van roaster management and optimization of

resources based on actual requirements

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Execution Strategy

Phase 1 Analysis & Assessment Assessing city demographics, profile, social and physical infrastructure to support current city requirements and its preparedness to transform into a smart city

Phase 2

Phase 3

City transformation •  City planning (master and ICT) •  Financial models •  Technical capacity development •  Prioritisation and implementation planning •  PPP modelling •  City operation model •  PMO for successful execution

Clear, ambitious and widely shared vision

Consulting External Stakeholder

Internal Stakeholders

Successful execution of strategy

Delivery of outcomes

Reassessment of city vision Assessment for city evolution

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100 smart cities

HRIDAY

GIFT City NRDA Industry

corridors

DDA smart city

Varanasi- Kyoto

Resilient cities

Namami Gange

Wave City Lavasa Palava

Smart energy management √ √ √ √ √ √ √ √ √ √ √ √

Smart water management √ √ √ √ √ √ √ √ √ √ √ √

Smart waste management √ √ √ √ √ √ √ √ √ √ √ √

Urban mobility √ √ √ √ √ √ √ √ √ √ √ √ e-Governance and citizen services √ √ √ √ √ √ √ √ √ √ √ √

Smart environment √ √ √ √ √ √ √ √ √ √ √ √

Smart spaces √ √ √ √ √ √ √ √ √ √ √ √ Smart surveillance √ √ √ √ √ √ √ √ √ √ √ √

Smart healthcare √ √ √ √ √ √ √ √ √ √ √ √ Smart education √ √ √ √ √ √ √ √ √ √ √ √ Smart communications √ √ √ √ √ √ √ √ √ √ √ √

With promising prospects for smart cities in India and an array of benefits for city stakeholders, smart solutions are expected to further drive growth in conventional engineering and design services as well as new services. This is likely to expand the market prospects for global vendors in India and provide a platform for them to export their services.

Concept Stage Design Stage

Execution Stage

√ Yes √ Partial √ No

Opportunity Landscape

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69 cities: 54% of GDP Andhra Pradesh Visakhapatnam, Vijaywada

Bihar Patna

Chattisgarh Raipur, Durg

Gujarat Ahmedabad, Surat, Vadodara, Rajkot

Haryana Gurgaon, Faridabad

Jharkhand Jamshedpur, Dhanbad, Ranchi

Karnataka Bengaluru, Mysore, Hubli-Dharwad

Kerala Kochi, Kozhikode, Malappuram, Thrissur, Kannur, Thiruvananthapuram, Kollam

Madhya Pradesh Indore, Bhopal, Jabalpur, Gwalior

Maharashtra Mumbai, Pune, Nagpur, Nasik, Vasai, Aurangabad, Solapur, Bhiwandi

Orissa Bhubaneshwar

Punjab Ludhiana, Amritsar, Jalandhar

Rajasthan Jaipur, Kota, Jodhpur, Bikaner

Tamil Nadu Chennai, Coimbatore, Madurai, Tiruchirapalli, Salem

Telangana Hyderabad

Uttar Pradesh Lucknow, Varanasi, Ghaziabad, Kanpur, Agra, Meerut, Allahabad, Moradabad, Bareilly, Aligarh, Noida, Gorakhpur, Saharanpur

West Bengal Kolkata, Asansol

Others Delhi, Goa, Chandigarh, Pondicherry

• Agartala • Aizawl • Dehradun • Dispur • Gangtok • Imphal • Itanagar • Jammu, Srinagar • Kohima • Shimla

• Amaravati • Ajmer • Badami • Dwarka • Gaya • Mathura • Puri • Warangal

12 state capitals

8 tourist or religious heritage cities

•  In January 2015, the Ministry of Urban Development (MoUD) announced the mission to roll out 100 smart cities across the country under national priority.

•  These smart cities will leverage innovation and technology for e-governance and the Digital India initiative.

•  Also, they will focus on employment generation, involve citizens in decision-making and policy execution, as well as improve the quality of life.

100 Smart Cities

Multiple Distributor Model

Single Distributor Model

Direct Commercial Presence Model

India Entry Option

Licensing Route

Joint Venture Route

Industrial Presence

India Entry Options

Commercial Presence

Own Setup Route

For companies that have high value added niche products

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For companies that have medium to high end general products and services

Models To Setup Industrial Presence

Indian Partner Complementary Service Portfolio

•  Extensive Market Knowledge •  Complimentary service portfolio •  Local Sourcing & Execution Capabilities •  Marketing & Sales Capabilities

Tentative Roles & Responsibilities

• Greenfield initiative will ensure that market objectives are in line with Italian Company’s expectations and standards

• Strong local understanding of market dynamics to continuously adapt to product characteristics and designs

• Opportunity to leverage the cost advantage and India presence to other other South Asian markets, if desired

Advantages / Benefits

Target Market

Joint Venture

Challenges

•  Indian partner may seek a substantial role in the overall operations, leading to conflicts between Italian company and the Indian partner

•  Long drawn negotiations to define all aspects of the Joint Venture/Licensing

•  Longer/delays in awarding the projects

Italian Company Indian Partner

• Technology and design know-how

• Project management support

• Training • Marketing, sales • Quality Control

• Sales and marketing, pricing and local inputs

• Business development in India

• Sourcing capabilities • Local engineering &

construction capabilities

Joint Venture NewCo

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Licensing

Italian Company

Multiple Distributor Model

Italian HQ Asia/India Manager

Distributor 1

Distributor 2

Distributor 3

Single Distributor Model

Italian HQ Asia/India Manager

Pan India Distributor

Direct Commercial Presence Model

Italian HQ Asia/India Manager

Sales Personal

Technical Manager

Newco Wholly Owned Indian Subsidiary

Director Of Sales

Distributor 1

Distributor 2

Distributor 3

Distributor 4

Models To Setup Commercial Presence

Model 1 Model 2 Model 3

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Commercial Presence: Comparative analysis

Single Distributor Model Multiple Distributor Model

Direct Commercial Presence Model Factors

Investment Low Low Relatively High

Future Expansion &

Scalability

Market Intelligence

Product Focus &

Sales Efficiency

Geographical Reach

Nil Low High

Nil Low High

Moderate Product Focus Low Sales Efficiency

Moderate Product Focus Moderate Sales Efficiency

High Product Focus High Sales Efficiency

Low Moderate High

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Steps For Success In The Indian Market

PLANNING FOR TOMORROW SIMPLIFIED PROCESSES SEAMLESS EXECUTION

•  International company should c o n d u c t a n i n d e p e n d e n t investigation on the Indian market to understand the potential that it offers.

• Define annual qualitative and quantitative targets for the Indian market.

• Define a road map and budgeting system to achieve the target by prioritizing on key products/services, market segments and geographies

• Setup reporting systems to encourage involvement and share responsibilities.

• Reporting system should have high element of follow-up and feedback mechanism.

• Setup internal and external systems and processes to execute sales and after sales support.

• Clarity in communication and e x p e c t a t i o n w i t h t h e distributors.

• Business aspects such as minimum stock purchase, cost sharing on fairs, definition of consumables vs warranty parts should be clearly defined in the agreement.

• Rigorous fol low up wi th distributors and market feedback on the products.

• Continuous study of the market and customizing the product based on market demand.

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ITALY Corso Venezia 36

20121 Milano Phone: +39.02.89053850

Fax: +39.02.89053860

USA 1432 K Street NW Washington DC

20005 Phone: +1.202.7890001

Fax: +1.202.7890009

INDIA Fairlink Center Off New Link

Road Mumbai 400053

Phone: +91.22.40393710 Fax: +91.22.40168369

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