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Business Opportunities in India

Kevin McCole is the Chief Operating Officer of the UK INDIA BUSINESS COUNCIL - for the latest updates follow @UKIBC

When I lived in Kolkata (2005 to 2008), supermarkets were only starting to feature. We used to get our fruit, vegetables, and meat from markets or from a micro-businessman selling from the pavement. We occasionally treated ourselves to sausages, bacon and cheese bought from the chef at the Oberoi hotel. This was legit but, as you would imagine, expensive.

Kevin McCole

16 July 2014

Visiting India always leaves me exhausted but exhilarated. I have to blame the Indian people for this – they have so much energy, drive and ambition. They also have sky-high aspirations, for themselves and for their country.  

This came through loud and clear in the election results announced on May 16th, when the BJP exceeded projections and became the first party to win a majority since 1984. Key to their success was its pro-business and pro-opportunity message, which won-over the aspiring young population.

There were an incredible 150 million first time voters in this election. It's this young population - their aspirations and their growing disposable incomes - that offer great opportunities for British businesses.

The Indian Consumer

I generally try to avoid using statistics, mostly because I can’t remember them,  but will resort to a few to put the Indian consumer in some context and show projections of their expansion.

At 55%, private domestic consumption is the single largest component of India’s GDP, and is what attracts most of the country’s investment. Both AT Kearney and the McKinsey Global Institute (MGI) predict that India will be the world’s 5th largest consumer economy by 2025, up from 12th now. 

You will often read references to India’s middle class. In considering consumption, a 2010 OECD report described this group as those with a disposable income of $10 - $100 per day. This is currently less than 10% of population. By 2039, the OECD predict it will be 90% - a staggering 1 billion people.

The Opportunities

These consumer-led opportunities go beyond the typical “retail sector”. The traditional areas of food and drink, fashion, health/beauty, electronics and white goods, are strong and growing fast. But so too are automotive, travel and leisure, healthcare, education, media and entertainment, and financial services.

According to Standard Chartered’s 2011 report, “India in the Super Cycle”, the consumer market in India will be worth $15 trillion by 2030, and $4 trillion of that will be in food and drink. This is a remarkable expansion, particularly as India’s total GDP is currently $1.8 trillion.

Food and Drink

When I lived in Kolkata (2005 to 2008), supermarkets were only starting to feature. We used to get our fruit, vegetables, and meat from markets or from a micro-businessman selling from the pavement. We occasionally treated ourselves to sausages, bacon and cheese bought from the chef at the Oberoi hotel. This was legit but as you would imagine, expensive.

Packaged food – cereals, snacks, and tinned food - was bought from a small “convenience store” at the end of our street. The personal service was great, but the selection and availability of food was at best erratic. It very much depended on what the shop owner was able to pick up on his sourcing trips to Thailand.

Thanks to a rise in the number of importers as well as wholesalers like Booker and the Tata-Tesco joint venture, these small stores are now bringing a more reliable supply of western goods to the corners of India’s teeming streets.

Supermarkets are also gaining traction. An Indian supermarket buyer told me that the problem is not demand for British food and drink products, it is supply. The goods fly off the shelves and can’t be replenished quickly enough.  

Fashion and Beauty

As demand for western styles and readymade garments continues to grow at 40-45 percent annually and aspirations draw consumers towards western brands, it is no surprise that British high street brands Next, M&S, ELC, Monsoon, Thomas Pink and the Body Shop are all present in India. Pavers England is another example of a premium high street brand sucessfully selling shoes to India's middle class. 

A fast emerging segment is children’s wear and accessories. It makes up approximately 20% of the total apparel market and is expected to grow at a CAGR of 10.5% over the next ten years (UKIBC Retail Sector view April 2013).


Indians are buying vehicles, graduating from bicycles to motorbikes to small and larger cars (this is also creating as yet un-met demand for roads). India is the world’s 2nd largest motorbike market, and the likes of Harley Davison and more recently, Triumph are making their mark in the luxury segment. The same goes for Jaguar and Land Rover brands when it comes to cars.

A recent, perhaps sad, example of changing tastes is the closure in May of the Hindustan Motors factory in Kolkata which had been producing the Ambassador, which is modelled on the 1953 Morris Oxford. The demise of the Ambassador has been clear to see on Kolkata’s roads. I recall being stunned when I arrived there in November 2005 to see that about 75% of all cars on the road seemed to be Ambassadors, with the yellow taxis particularly dominating the streets. By the time I left, the Tata Indica and Suzuki Maruti were visibly gaining market share on the choked roads.

Travel and Leisure

The travel and leisure industry is also going through a transformation. Cox and Kings’ business was built on providing luxury holidays in India, with a small number of Indian’s travelling overseas. Now, around 900,000 Indians travel across the world on a Cox and Kings holiday, up from 4,000 in 1990. 

Healthcare and Education

Given the strong role of the state, we in the UK don’t normally think of education and healthcare as being part of the consumer market. But inadequate state provision, alongside growing disposable incomes and aspirations, are driving private sector provision. In education, this is from nursery all the way through to HE, including personal development for professionals. In healthcare, the opportunities cover the spectrum - medical devices and hospital equipment, data management, management of primary healthcare services, clinical trials and R&D.      

Media and Entertainment

TV channel surfing can be a full time job in India, with more than 600 TV channels and 145m pay-TV households. 1,000 films are produced in India every year, and it's not just Bollywood. In fact, more films are produced in Tamil Nadu than in Mumbai, the home of Bollywood.

While Indian-generated content dominates, it has been striking over the years to see the growing number of channels showing US and UK content – both old and new content, from “Yes Minister” to “Spooks” to “Downton Abbey”. Many a weekend can be lost in India watching back to back live Premier League matches as the lunchtime, 3pm and evening matches are all broadcast.

The popularity of smart phones and tablets as a means of communication, and of consuming information and entertainment is rapidly gathering pace. As incomes and aspirations rise, India's vibrant digital, media and entertainment industries are far from their peak, and are hungry for UK content, technology and expertise (Ernst and young Doing business in India guide 2012).

Financial Services

Finally, while Indians are becoming increasingly good at spending, they are excellent savers with the middle/consuming class becoming active investors in the stock mark. They don’t, though, have sufficient access to services such as insurance and pensions and, indeed, in some instances, to banking. This is changing, albeit slowly, as India liberalises in these areas and as technology enables connectivity to people in remote areas. Financial services is clearly an area where the UK excels, and one where reforms in India will help both the Indian people and UK expertise.

Meet and Beat the Challenge

It's not just Indian people and businesses that are positive, aspirational and ambitious. British companies, big and small succeeding in India share those qualities. The international director of a British engineering SME told me last week that, if it was easy to operate in India, it wouldn’t hold such great opportunities as the market would be saturated. He and his colleagues are devoting their positive energy and attitude to building their presence now, before their rivals wake up. I’d urge all UK companies to at least look at India. There are complexities, but they can be natigated and the tremendous opportunities accesses. 

Why do business in #Indonesia? Read the new #blog by Chris Wren from @BritChamindo: http://t.co/7cyruRZ1plpic.twitter.com/A8htjN2dzc

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