Advertising and Marketing Industry in India

Last Updated: May 2013

Introduction

India is a diverse market and hence marketers adopt multi-faceted strategies to woo consumers. While there is a consumer who can be acknowledged through conventional media like television and radio, there is an emerging class of consumers who seek awareness through digital platforms and internet media.

Thus marketing as an industry is evolving in a big way and offers great opportunities to marketers across the globe. Domestic as well as international players are devising newer and better strategies to please Indian consumer markets that are anticipated to witness immense growth in coming years.

Marketing Industry Dynamics

• Indian smart-phone users access internet more than their counterparts in the US, according to a mobile survey conducted by IPSOS and Google. The survey pointed that 36 per cent of all smart-phone owners in India are in the age group of 18 - 29
• Meanwhile, social media is penetrating deep in the lives of Indian internet users. There are 110 million Internet users in the country and 62 million on the Facebook
• India is among the top three fastest growing Internet markets in the world, stated a study by industry body Assocham and ComScore. "Among the BRIC nations, India has been the fastest growing market adding over 18 million Internet users and growing at an annual rate of 41 per cent”, according to the study

Advertising and Media & Entertainment Industry

• The Indian media and entertainment (M&E) industry grew from Rs 728 billion (US$ 13.45 billion) in 2011 to Rs 820 billion (US$ 15.15 billion) in 2012; marking a growth of 12.6 per cent
• Total advertising expenditure (AdEx) across media stood at Rs 327.4 billion (US$ 6.05 billion) in 2012 while advertising revenues increased by 9 per cent
• Print continued to be the largest beneficiary, accounting for 46 per cent of the advertising pie at Rs 150 billion (US$ 2.77 billion)
• Furthermore, television continued to be a dominant segment in the M&E industry while new media sectors (like animation/VFX) and Films and Music segments recorded strong growth. Radio is expected to witness great emancipation at a compounded annual growth rate (CAGR) of 16.6 per cent over 2012-17

Direct Selling

Direct selling is becoming very popular as a marketing strategy these days. Direct selling has gone beyond cosmetics to include technology products, herbal medicine to garments etc in its offerings. The segment accounted for 35.8 per cent of non-store retail sales, 4.41 per cent of organised retail sales and contributed 0.07 per cent of gross domestic product (GDP) in 2011, according to a study conducted by Indicus Analytics, India’s leading economics research firm. Direct selling, as a technique and industry segment, is poised to gain importance in India in coming years.

Direct selling majors are also betting high on their marketing strategy to grab a greater share in the market. While mainstream players like Sahara are foraying in direct selling segment, Amway’s turnover has crossed the revenues of some of the leading FMCG companies.

ICRIER has recently issued a report which says that with economic development and growing consumerism, the consumer market in India has undergone a significant change and direct selling as a category is emerging fast. The direct selling industry is growing at around 20 per cent and companies are expanding their footprints in Tier 1 and 2 cities. In 2009-10, India ranked 11^th among the top direct selling countries in terms of direct sellers, and has approximately three million direct sellers. The Indian direct selling market is expected to touch Rs 71, 500 crore (US$ 13.26 billion) by the end of 2013.