Inclusive Growth Is Driving India's Economy: Prasun Basu, Neilsen
President - South Asia, The Nielsen Company, had some rather positive forecasts for India while delivering the State of the Union at the launch of the BW Businessworld Marketing Whitebook
Delivering the State of the Union at the launch of the BW Businessworld Marketing Whitebook, Prasun Basu, President - South Asia, The Nielsen Company, noted that marketers in India have the luxury of finding opportunity across the spectrum, be that in terms of age, education, income, location or technology.
Basu's forecast is that India is poised to be the fifth largest economy in the world overtaking France and the United Kingdom in the next one year. “India is the fastest growing economy in the world. Currently it is at No 7 and by 2019, India will be in the top 5 largest economies of the world with the US, China, Japan and Germany ahead of it in the list.”
He extolled the unique qualities of the Indian market and economy, noting that India houses three major countries in one. Measuring various sections of the country by their nominal GDP he said, “North India is equivalent to Argentina, East and West India to Mexico, and South India to Turkey. By 2030, North India will be equivalent to Mexico, East and West India to Turkey and Indonesia put together and South India to Brazil.”
He identified India's diversity as the overarching theme for the growth story. “Inclusive growth is the biggest driver here.” No wonder then that his message to retail marketers in particular was that success will lie in reaching both ends of the spectrum.
Rural growth is outpacing Urban growth in the FMCG space. A study of the two markets shows that the rural to urban value growth ratio across Q1 2017-2018 is 1.4:1. This was 1.1:1 in 2016-2017, but the rural market bounced back in 2017-2018. In the long term though, urbanisation will be the larger growth story. Nielsen predicts that by 2030, the quantum of urban FMCG sales will stand at $ 84 billion while in rural India it will be around $ 53 billion.
Retailers will also need to balance their act in terms of offline vs digital trade. He said that the sweet spot will lie in “combining traditional trade with modern trade.” Consumers and marketers are converging on the digital platform. Pointing out that cellular growth is outpacing Wi-Fi growth, he said that the reach of streaming apps, shopping apps, and payment apps have seen around 1.5% growth in adoption since 2017. “By 2030 e-commerce is expected to contribute to 11% of FMCG sales in some categories,” Basu said. According to a Nielsen study, e-commerce will contribute to $ 300 billion of the $ 2.8 trillion retail base. In 2015 e-commerce barely contributed to $ 18 billion of the $ 600 billion retail market.
Overall, Nielsen has predicted India’s growth in 2018 to be around 11%. This is also seen as the most recent study by the market research agency that shows that the growth across Urban, Rural, Grocers, Modern Trade, and the North and West markets is in double digits exhibiting higher growth than the 2018 forecast.
In summary, Basu’s State of the Union infused the room with optimism and hope for the years ahead.
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