In­dus­try Special IN­STORE GRAPH­ICS

VM&RD - - Front Page - Surender Gnanao­livu

The or­ga­nized In­dian re­tail in­dus­try is at about US$ $ 60 Bil­lion (source: In­dia Brand Eq­uity Foun­da­tion) and grow­ing at about 20% CAGR. Con­sid­er­ing the av­er­age spend on vis­ual mer­chan­dis­ing by com­pa­nies is about 0.1% of rev­enues and 30% of that is spent on in-store sig­nage, the an­nual mar­ket size es­ti­mate of In-store graph­ics is about US$ 18 Mil­lion. In-store graph­ics play a cru­cial role in cre­at­ing com­pelling ex­pe­ri­ences for cus­tomers to con­vert them to buy­ers from browsers. Their core pur­pose is to de­liver brand­ing, cre­ate im­agery and com­mu­ni­cate brand and prod­uct in­for­ma­tion to com­plete the cus­tomer’s ex­pe­ri­ence in the store en­vi­ron­ment. With au­to­ma­tion and tech­nol­ogy en­abling low en­try bar­ri­ers in this do­main, many new play­ers have en­tered the field to take a piece of the mar­ket es­ti­mate. VM&RD took a close look at the 19 of the top in-store graph­ics sup­pli­ers in In­dia. The in­ter­ac­tion with them re­veals that they have been very busy in sup­ply­ing, as per our es­ti­mate, over a mil­lion square feet of graph­ics an­nu­ally for the or­ga­nized re­tail sec­tor. Some in-sights from the find­ings are as fol­lows: In­dus­try Health Check 1. De­spite the growth of the dig­i­tal me­dia, the in-store graph­ics in­dus­try has grown by an av­er­age of about 20% which is in­ci­den­tally the grown rate of the or­ga­nized re­tail sec­tor. 2. Ow­ing to the en­try of new play­ers who have been ser­vic­ing other in­dus­tries, the av­er­age re­tail con­tri­bu­tion of the turnovers is about 60% now. 3. Though there are new en­trants into the re­tail do­main, the av­er­age age of op­er­at­ing com­pa­nies is about 15 years. This means that ma­jor­ity of them are not de­pen­dent com­pletely on re­tail to sur­vive. 4. Only 5% of the play­ers we spoke with serve re­tail ex­clu­sively and about 10-15% have a con­tri­bu­tion of over 75% of their turnover ex­clu­sively for re­tail. 5. The to­tal rev­enue gen­er­ated from the top 19 play­ers is over ༤ 140 Cr. The av­er­age of each is a low ༤ 8 Cr though the top play­ers are over about 3 times that av­er­age. Con­sumer ser­vice re­port 1. The top 19 ven­dors are spread across three met­ros in In­dia namely, Delhi, Mum­bai and Ban­ga­lore prob­a­bly be­cause of them be­ing the top re­tail mar­kets in In­dia. Mum­bai tops the count with about over 60% play­ers be­ing lo­cated there fol­lowed by New Delhi. 2. Com­pared to the VM&Props in­dus­try’s space man­ning den­sity of 250 sft per per­son this in­dus­try has a higher rate of 160 sft per per­son ow­ing to lower spa­ces and high pro­duc­tion cus­tomiza­tion that needs man­ual in­ter­ven­tion. 3. The top 19 play­ers are ser­vic­ing over 450 clients with an av­er­age of about 25 clients each with the top 3 play­ers ser­vic­ing a chal­leng­ing 50+ Clients each an­nu­ally! 4. Only about 0.75% of the rev­enues of the top 19 play­ers is earned from Gen­eral Trade. 5. Only about 50% of them serve the large or­ga­nized re­tail cor­po­rates and the re­main­ing serve the smaller re­tail­ers and brands in the mar­ket­place. In con­clu­sion, it is ev­i­dent that sup­ply is still in­ad­e­quate for the ex­ist­ing de­mand and hence there is lot more room for more play­ers and growth of cur­rent ones. How­ever, the mar­ket can get dis­rupted with the grow­ing use of dig­i­tal me­dia. Play­ers are left with look­ing at this sit­u­a­tion se­ri­ously as a big threat to man­ager or a huge op­por­tu­nity to grab.

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