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Retail :
The Indian retail industry has
experienced growth of 10.6% between
2010 and 2012 and is expected to
increase to $750-850 bn by 2015.
Retail business in India is estimated at
around $550 bn, with organized retail
estimated at $28 bn at 5-7% penetration.
Penetration of organized retail is
estimated at about 14% with a 12% rate
of growth per annum.
*Source: Knight Frank
Future trends :
A. FDI in specialty stores:
Multi-brand organized retail
in specialty stores such
as Consumer Electronics,
Furniture and Furnishing,
Footwear etc. are expected
to expand and mature in the
next few years.
B. Dominance of
unorganized retail:
Flexible credit options
and convenient shopping
Real Estate :
Residential construction constitutes 17% of total construction in India. In 2010, the construction
industry in India was estimated to be worth $129 bn, accounting for 7.8% of GDP.
Indias prime property market was
inexorably driven by demographic
change, with the number of
wealthy households forecast
to increase to 11 mn by 2013,
compared to 3 mn in 2003
The residential construction
market is expected to grow by a
CAGR of 10% to 2015, supported by
single-family housing (10% CAGR).
Luxury :
The luxury market in India is pegged to grow at 25% in 2013 till 2015 and likely to touch $15 bn from
the current level of $8 bn.
The number of Ultra High Net worth Households, with a minimum net worth of $ 5mn is expected to
triple to 286,000 in next 5 years with a 5-fold increase in their net worth to INR 235 trillion.
HNIs will double by 2015 to over 400,000 with a collective wealth of $ 2645 bn.
Almost 40% of the investments made by HNIs in India are in real estate. For Delhi-NCR, this figure is
more than 50%.
* Source: Jones Lang LaSalle (JLL)
2011
2012f
2013f
2014f
2015f
Residential construction
(Total)
21,352
23,197
25,249
27,723
30,624
33,757
Single-Family Housing
10,826
11,752
12,805
14,071
15,547
17,151
6,794
7,401
8,080
8,894
9,8512
10,885
Residential Building
Redevelopment
3,732
4,045
4,364
4,757
5,225
5,720
Global Majors :
Dubai-based DAMAC Properties to invest up to
2.9 bn in India.
Merrill Lynch & Co acquire 49% equity in seven
mid-income housing projects of Indias largest real
estate developer DLF in Chennai, Bangalore, Kochi
and Indore for 243 mn.
UAE-based real estate company Rakeen and
Chennai-based mineral firm Trimex
Group form joint venture, Rakindo Developers,
which will invest over 3 bn over the next 5 years.
DLF forms joint venture with Limitless Holding, a
part of Dubai World, to develop a 9 bn township
project in Karnataka.
Gulf Finance House (GFH) to invest over 1 bn in
a green field site close to Navi Mumbai.
Project watch :
Luxury Housing
The industry is projected to grow at a CAGR of 80% through 2012-2014 and around 9,000 units of
luxury housing complexes are slated to be launched over the next 2-4 years.
The total value of luxury homes, launched in 182 luxury residential apartments, offering a total of
25,570 units across the top 7 cities of NCR-Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Pune
and Kolkata in 2008-2012 was around $30 bn.
Affordable Housing :
A Technical Group on Urban Housing Shortage has estimated that the total housing shortage in the
country is 18.78 mn units in 2012.
The demand for affordable housing is expected to grow at a CAGR of around 13% between
2011-2013 (RNCOS) and would exceed 2 mn units across key cities in India with 80% of demand
expected to originate from the $6,700-10,000 income group. Affordable housing is estimated to
reach a market size of over $67 bn by end of 2012 (Knight Frank).
Affordable housing will be a key factor in driving the sector and we have already started working
on progressive solutions in this area for effective and customized implementation of such projects
Kumar Gera, Chairman, Confederation of Real Estate Developers Associations of India (CREDAI).
Project watch :
2013 is expected to bring a larger-than-usual number of NRI investors into the commercial space arena.
NRIs are currently enthused by prevailing exchange rate benefits and the fact that commercial real
estate capital values are still 15-25% under their 2007-08 peak levels.
Cities such as Mumbai, NCR-Delhi, Bangalore and Chennai saw 72.5% total commercial space absorption
in 2012.
All-India demand for office space is expected to reach 180 mn sq. ft. by 2013 in 7 major cities: Mumbai,
NCR, Pune, Bengaluru, Chennai, Hyderabad and Kolkata, catering to 75% of total demand.
Project Watch :
Kanakia Spaces has just completed a $85 mn, 1.2 mn sq.ft project in Andheri, Mumbai, with the largest
single floor plate of 1,60,000 sq.ft in the country (0.7 km long; and more than 3.5 acres).
NCC Urban Infrastructure Limited, has over 10 projects with a total built-up area of 2.5 mn sq.ft. in
Bangalore, Chennai, Hyderabad and Kochi.
Manjeera Constructions Ltd., Hyderabad plans to develop $134 mn, 1.8 mn sq.ft mixed use project, on
the Kukatpally-Hitec City corridor.
* Source: 2012 Fitch Report
New entrants :
Real estate major DLFs subsidiary DLF Brands
will bring Chicago-based Claires Stores Inc to
India and open 75 stores over 2011-16.
French retail chain, Carrefour has entered
India with lease deals across 10 to 12 sites.
RPG-owned Spencers Retail plans to set up
15-20 new stores, all-India, in 2011-12.
Spar Hypermarkets, the food retail chain of
Dubai-based Landmark Group, has invested
$51.31 mn in setting up 5 hypermarkets.
* Source: 2012 Fitch Report
Tourism :
India, after China, is considered one of the most lucrative hotel markets in the world and has the
2nd largest construction pipeline in Asia. India has an estimated 170,000 hotel rooms of which
around 60,000 are branded. Even with the expected addition of another 60,000 hotel rooms
(across segments) over the next 3-5 years, the industry is expected to fall short of meeting
the long term demands of an economy growing at 7-9% p.a.
Hospitality :
The Indian Hospitality industry, estimated at $17 bn, contributes 2.2% of Indias GDP. The sector is
expected to grow to $36 bn by the end of 2018. Of the top twenty global brands (in terms of number of
hotels), around 18 brands are already present in India.
In 2009, Hotel construction in India accounted for 23% of total Asia Pacific construction projects.
Project watch:
The worlds largest hotel group by number of rooms, IHG, will launch 19 Holiday Inn Express hotels
in India by 2016.
Starwood operates under brands such as Le Meridien & Sheraton and intends to set up 100 hotels by 2015.
Accor, a global hotel chain who is pushing its mid-market brands, plans to open 81 hotels by 2015.
One of the largest conglomerates in India, Tata Group, is planning to open over 40 budget
hotels before 2012.
Office Furniture
Furniture
India is ranked 8th in terms of consumption in the world. The organized furniture industry is estimated
at around $8 billion and is expected to grow at a CAGR of about 25-30% annually. The modular furniture
market in India, estimated at about $160 mn, is dominated by bigger players like Godrej and BP Ergo.
The market size of the international range of premium furniture is estimated to be worth about $20
mn, and is serviced by foreign players. The current imports are mainly from Italy, Germany, Spain,
China, Korea, Malaysia, Indonesia, Philippines and Japan.
The furniture market in India is mainly concentrated in A, B and C class cities.
It is estimated that the top 784 urban centres contribute 41% to the total consumer furniture market.
A and B type cities together contribute 33% of the total market.
There are about 5000 firms in the domestic organized sector, and nearly 10500 importers of furniture.
India imports around US $150 mn worth of furniture, growing rapidly and catering to urban,
affluent households.
Major Players :
Furniture retailing giants : Pantaloon,
Shoppers Stop, Trent, RPG, Vishal
Retail, Reliance and Tata group.
Industry watch :
Godrej & Boyce Manufacturing Co
Ltd, BP Ergo, Featherlite, Haworth,
Style Spa, Renaissance, Millenium
Lifestyles, Durian, Kian, Tangent,
Furniture Concepts, Furniturewala,
Zuari, N R Jasani & Company and PSL
Modular Furniture.
International tie-ups :
Wipro hires international designers Eric Chan and Tim
Wallace to launch Startline range of products.
Rockworth Systems Furniture (India) Pvt. Ltd., a joint
venture between Dubai-based Al Reyami Group and
Thailand-based Rockworth Public Company Limited, set
up its first manufacturing facility in India at Sri City SEZ,
a multi-product special economic zone.
Furnishings
The Indian home furnishings market is estimated at $3.5
bn and is expected to reach $5.6 bn by 2015. The luxury
furnishings market comprises 3% of the market and is
growing at 25-30% per annum.High demand from mini
metros and tier-II cities.
Ceramics
India ranks in the top 3 in ceramic
tile production in the world. The market
share of India has risen from a little
over 2.7% to 5.6%.
A major change in the ceramic tiles
industry was the introduction of vitrified
and porcelain tiles which accounted for 50%
of the total tile sales by value. These new
products and the conventional wall and
floor tiles have together made the
organized sector grow to a formidable
1150 mn industry.
10%
Curtains
11%
Upholstery
13%
Bath
11%
Others
Bed Linen
55%
Lighting Industry
The Indian lighting industry is currently
pegged at $1.9 bn and is growing at about
17 - 18% per annum. The LED Industry is
expected to reach around $500 mn by 2015.
Major players in the industry are already
offering very good value propositions in the
market, making this segment dynamic.
With a strong movement towards sustainable
solutions in lighting, LEDs are expected to be
the next choice in lighting for consumers, and
a McKinsey report has predicted that 70% of
lighting will become LED based by 2020.
The key segments identified in this
changeover will be hospitality, retail, outdoors
& residential.
Furniture Hardware
The furniture and architectural
hardware market is very roughly
estimated by industry experts at
$4 bn. Of this, 40% is imported
and 60% is manufactured in the
domestic market. The industry
has grown at a CAGR of 20-25%
in last 2 years and is expected to
continue at the same rate for the
next 10 years.
The market is largely in the
unorganized sector, with 80%
falling in this segment.
India has manufacturing hubs
in tier 2 centers such as Rajkot
and Aligarh which compete with
Chinese products but the lack of
new technology and machinery
have slowed growth.
CUSTOMS TARIFFS
2013 BUDGET
Comprise Basic Duty + Countervailing Duty (CVD) + Special CVD
Paints
The domestic paint industry is expected to touch the $10 bn
mark in the next 3 years on the back of rising urbanization
and economic revival.
In 2012, the paint industry stood at $5.2 bn, out of which the
decorative segment contributed nearly 71% at $3.7 bn, while
theremaining $1.5 bn was contributed by the industrial segment.
In terms of volume, the industry stood at 3.11 mn tonnes, of
which the decorative segment accounted for nearly 77% .
According to IPA the 70:30 trend of decorative and industrial
segments will continue in the future, on account of growing
urbanization and increase in disposable income.
In the industrial segment, the auto sector will continue to push
demand. The industry is also expecting an increase in price in
the coming years, and has witnessed almost 30% increase in price
over the last three years.
* Source: Indian Paint Association
KITCHEN
Wood And Other Kitchen Accessories
Basic Duty + CVD + Spl CVD
26%
LIGHTING
Lamps, Light Fittings, Search Lights, Spot
Lights, Hanging Lamps, Complete Fittings
Basic Duty only
FURNITURE
Decorative, Marine, Aircraft, Elastic
Laminated, Laminated And All Other Ply
Basic Duty + CVD + Spl CVD
26%
FLOORING
Parquet, Tongued, Grooved, Molded,
Non-Coniferous Wood, Bamboo
Basic Duty + CVD + Spl CVD
* Source: www.cybex.in
26%
26%
TABLEWARE
26%
12%
PAINT
Acrylic, Vinyl, Dispersion, Emulsion,
Distemper, Varnishes, Pigments, Dry paints
Basic Duty only
7.5%
14%
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