Entry into the Indian Retail MarketHow to get your products on the shelves

“For in Asia and around the world, India is not simply emerging; India has already emerged.”

- President Barack Obama

About India8% GDP growth ratePopulation: 1.2 billion22 official languages

Drivers of Growth 2nd worldwide FDI

destination Rising disposable incomes Availability of qualified

staff Strong & stable financial

market Favorable demographic

trends

World’s… Cheapest car, TATA

Nano Largest milk producer Largest tea producer Lowest retail space per

capita at 0.19 m2

Biggest gold market Fastest movie producer

Five P’s of India

Success

Price

Placement

PromotionPartner

Patience

The new Indian upper-middle classYoung Indian couple /Modern Trade Outlet Bangalore

India’s Upper-Middleclass 80 million upper /

upper middle class people, 2010 McKinsey, growing to 550 million by 2025

Disposable income high

Identify themselves with international consumer

2010 20250

100

200

300

400

500

600

2010 SnapshotIndian Upper-Middle Class: 80 million

German Population : 80 million

2025 OutlookIndian Upper-Middle Class: 550 million

Population of the EU 500 million

2050 Consumption

Booming India“The global meltdown of 2008 hardly had any effect on India, while the entire world was reeling under the recession effect. It was India which presented itself as a shining example to other nations, on ways to come out of crises successfully and prosper simultaneously.”

- fxnewsindia

Retail explosion 5th largest retail market globally Worth $ 500 billion Growth rate >15% per annum 5% Organized, growing at 35% per annum Organized retail is being tipped as one of the biggest

gainers from growing consumerism and rising income

Drivers for retail growth

Booming Economy

Large young population

Spurt in urbanisation

Real estate boom

E commerce / Online shopping

How to enter the booming Indian retail marketGolden rules for any exporting company

The Right Placement

Organized TradeTraditional Trade

Types of RetailOrganized trade 5% of total retail market Growing with 35%

annually Leading chains like Spar,

Hypercity, Natures Basket growing rapidly

Broad portfolio of products, domestic and imported

Unorganized trade 95% of total retail

market Mix of modern stand

alone stores and traditional stores

Traditional store’s product portfolio is mostly domestic

Modern stand alone store’s product portfolio carries imported ranges as well

Social classes in IndiaClass Key Facts

Upper-middle High Disposable income Internationally influenced Living in the metros High willingness to experiment and sufficient budget to

buy imported goods

Middle Young working people Office jobs Willingness to experiment, but limited budget to buy

imported goods Good future perspective Higher income than the parents at young age

Lower Living in rural areas and poorer parts of the metros Getting paid in daily wages Working to survive, no disposable income

Your customer: Upper - middle class

2012 2025

42%

19%

38% Upper-

middleMiddleLower

7%21%

72%

Upper-middleMiddleLower

Modern Indian men at a Hennessy Club launch / Modern Trade Outlet in Delhi

Consumer / Retail in pictures

Indian crowd on a night out / Garuda Mall, Bangalore

Consumer / Retail in Pictures

Fashionable Indian girls /Phoenix Mall, Bangalore

Consumer / Retail in Pictures

Bollywood Stars / Forum Mall, Bangalore

Consumer / Retail in Pictures

Expected changesLaw Impact

GST Removal of compounding effect of non-interchangeability of service tax and VAT

Local taxes

Removal of inter-state “import duties” and city level “Octroi”

FDI Allowance of majority stake holding in multi-branded retail (e.g. super markets) resulting in inflow of much required cash and know-how

WTO Reduction in import duties and customs hassle expected

How to introduce products successfully?

Exporting to India

The right product and price

Quality Imported = Quality Live up to this

expectation! Dress your product

right

Set MRP right Indians are price

sensitive reg. their day to day needs

Higher disposable income allows to experiment with imported products

No competition with local brands, but with other imported products

Customer End-Price build-up

10%• Transport• Handling

45-60%• Duties• Clearing

60%• Margins for

importer, distributor, retailer

2%+5%• CST• Octroi

14%• VAT

MRP Calculator (approximate)45% dutiesSnacks/chips etc

SKU/pallet

750

1500

3000

€ 0.50 212

162 137

€ 0.75 269

219 193

€ 1.00 325

275 249

55% dutiesChocolate/mueslis etc

SKU/pallet

750

1500

3000

€ 0.50 225

172 146

€ 0.75 285

232 206

€ 1.00 345

293 266How this works1) Identify your relevant import duties2) Estimate #SKU/pallet and select your FOB price3) Define your MRP

Price Levels in India

Milk: 45 INR / 1 litre

Chocolates: 80 INR / 100gr

Tropicana: 100 INR / 1 Litre

Axe Deo: 150 INR / 150ml

Nivea Shaving Foam: INR 200 /

200ml

Pasta Sauce: 280 INR / 350gr

Local white wine:550 INR / 750ml

Smirnoff Vodka: 750 INR / 1 Litre

From our Portfolio

Non-Stop:INR 189 (125gr)

VanDerMeulen Melba Toast: INR 125 (100gr)

Antica Cantina:INR 180 (200gr)

Quickbury regular INR 180

Quickbury Sugarfree INR 245

Lonka INR 220

DavelaarINR 400

ThorntonsINR 740

Placement & Promotion

Increase POS Listings (budget) Margins to retailers Nationwide distribution

network Quality products Attractive price points

Increase Sales/POS

Sampling & promoting Brand awareness Shelf placement,

presentation Quality products Attractive price points

Success of a product is determined by 2 factors:1. How many points of sale do you have?2. How many SKU’s per store do you sell?

Listings for MTO MTO charges listing fees

before placement Listing fees are per SKU Listing fees vary and are

highest for new suppliers Listings depending on

perceived product potential by MTO

Listing procedures take 2-4 weeks

Chains Indication/SKU

Spar € 175/-

HyperCity € 250/-

Spencers € 85/-

Natures Basket

€ 450/-

Nilgiris € 200/-

Namdharis € 150/-

General Trade OutletsPro’s of GTO Many more outlets

than MTO No listing fees On average lower

margins Free in-store

promotions possible Easier influenced by

merchandiser

Con’s of GTO Lower sales per store

for imported products Individual supply /

invoicing Sub-distributor needed Irregular in product

portfolio No sales reports No temperature control

Promotions Product Visibility

In-store samplings Floor stickers Posters Danglers Shelf talkers

Expo participations Social media

campaigns

Type Cost indication

In store sampling

€125/ day

Floor stickers € 500 / month

Posters € 350 / month

Danglers € 350 / month

Expo participation

€ 450 / weekend

Social media As per campaign

Market Entry with NexusNovusIntroduction and expansion

NexusNovus Enabling Business in India

since 2007, headquartered in India

Professional and pragmatic partner for SMEs

Market Entry Services Strong nationwide network,

leading to savings in cost & time

Experienced team with Indo-European identity

Unique portfolio: one-stop-shop

NexusNovus Advantage European Management, we understand your

needs and expectations Nation-wide distribution network including 7

distribution centers 5 years of experience in retail Products placed in 90% of all the modern retail

outlets in India Network of merchandisers across all major cities. Negotiation skills in the Indian retail  market and

understanding of the business culture Qualified marketing and product promotion team

4 Steps to Success Test

Place products in the shelves of organized and unorganized retail, promote them, collect consumer feedback and measure the actual sales results

EvaluateAnalyze the sales results and consumer feedback and see what implications this has for your product, your price point, your marketing strategy and your business development approach

PlanBased on the evaluation, plan a detailed strategic approach on how to grow in the Indian market

ExpandAfter a successful test, activate all other major cities in India, increase the number of activations of MTO’s, GTO’s and Specialty Stores/Institutions, and support the retail activation with marketing and promotion activities

Test, Promote, EvaluateOur job Shortlisting 5 SKUs with the manufacturer Calculating the MRP of the products Transport and duty clearance of the 2 pallets Coordinating and executing a pilot study in India in

approximately 20 MTO outlets of 3 chains, 10-15 GTO outlets, and 5 Specialty Stores

Organizing and executing in-store promotion activities and samplings

Promoting the products through online media and events Providing detailed sales results overview every 2 weeks Creating a detailed evaluation report and expansion strategy at

the end of the pilot Participating in events Bearing all other direct and indirect costs: Domestic transport,

warehousing, personnel, management, shop visits etc.

Your job Shortlisting 3-5 SKUs along with

NexusNovus for which the pilot will be executed

Supplying approximately 400-500 products per variety, Free of Cost

Labeling the products as per the Indian Weight & Measurement requirements

Support for activation budget

Test, Promote, Evaluate

For enquiries:

Contact:Victor EveleensDirector I&Dv.eveleens@nexusnovus.com+91 80 6535 3528