India market
Republic of India
Fig. 1 National flag of India
India (official name: the Republic of India; Hindi: Bhārat Gaṇarājya) is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. With 1,210,193,422 residents reported in the 2011 provisional census report, India is the world's second-most populous country. Its population grew by 17.64% from 2001 to 2011,compared to 21.54% growth in the previous decade (1991–2001). The human sex ratio, according to the 2011 census, is 940 females per 1,000 males. The median age was 27.6 as of 2016. The GDP per capital is $8,484 estimated in 2019.
Fig. 2 Map of India
According to the International Monetary Fund (IMF), the Indian economy in 2017 was nominally worth US$2.611 trillion; it is the sixth-largest economy by market exchange rates, and is, at US$9.459 trillion, the third-largest by purchasing power parity, or PPP. With its average annual GDP growth rate of 5.8% over the past two decades, and reaching 6.1% during 2011–2012, India is one of the world's fastest-growing economies. However, the country ranks 140th in the world in nominal GDP per capita and 129th in GDP per capita at PPP.[ The 513.7-million-worker Indian labour force is the world's second-largest, as of 2016. The service sector makes up 55.6% of GDP, the industrial sector 26.3% and the agricultural sector 18.1%. India's foreign exchange remittances of US$70 billion in 2014, the largest in the world, were contributed to its economy by 25 million Indians working in foreign countries. According to a 2011 PricewaterhouseCoopers (PwC) report, India's GDP at purchasing power parity could overtake that of the United States by 2045. During the next four decades, Indian GDP is expected to grow at an annualised average of 8%, making it potentially the world's fastest-growing major economy until 2050. The report highlights key growth factors: a young and rapidly growing working-age population; growth in the manufacturing sector because of rising education and engineering skill levels; and sustained growth of the consumer market driven by a rapidly growing middle-class. The report highlights key growth factors: a young and rapidly growing working-age population; growth in the manufacturing sector because of rising education and engineering skill levels; and sustained growth of the consumer market driven by a rapidly growing middle-class. The World Bank cautions that, for India to achieve its economic potential, it must continue to focus on public sector reform, transport infrastructure, agricultural and rural development, removal of labour regulations, education, energy security, and public health and nutrition.
1. Introduction to India
The Indian household products market has seen very strong, double-digit growth overall in recent years. The industry is predicted to continue growing, but at a deceleration strong ratio for the forecast period. Table 1 shows the market value of household appliances in India, the Indian household products market had total revenues of $5.5bn in 2014, representing a compound annual growth rate (CAGR) of 10.9% between 2010 and 2014. In comparison, the Chinese and Japanese markets grew with CAGRs of 6.3% and 1.9% respectively, over the same period, to reach respective values of $26.1bn and $15.0bn in 2014. The fast-paced economy and rapid urbanization of India has spurred the growth of an increasingly prosperous urban middle class, which has raised the standard of living and fueled consumption ratios across consumer sectors including the household products market. The textile washing products segment was the market most lucrative in 2014, with total revenues of $4.1bn, equivalent to 75.2% of the market's overall value. The insecticides segment contributed revenues of $0.5bn in 2014, equating to 9.1% of the market's aggregate value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 7.2% for the five-year period 2014 - 2019, which is expected to drive the market to a value of $7.7bn by the end of 2019. Comparatively, the Chinese and Japanese markets will grow with CAGRs of 5.8% and 1.6% respectively, over the same period, to reach respective values of $34.5bn and $16.2bn in 2019. The Indian household products market grew by 9.4% in 2014 to reach a value of $5,475 million. The compound annual growth rate of the market in the period 2010–14 was 10.9%.
Table 1 India household appliances market value (2010-19)
2. WDIRC selling
The forecast of WDIRC selling can be shown in Table 2 during the first ten years since product launched. Here the assumptions of households, occupancy ratio, initial sale, selling price, and manufacture cost are 248,408,494, 0.0030%, 7,452, 250 and 200, respectively. The first year is set as the baseline for comparison with the following years, the sale volume, year penetration, revenue, cost and profit are 7,452 (sets), 30 (ppm), 1,863,064(USD), 1,490,451 (USD) and 372,613 (USD), respectively. As we think, the growth rate with years will be 1, 3.84, 7.29, 10.76, 12.49, 13.71, 16.11, 18.42, 20.64 and 22 times over the first year. The year penetration of WDIRC will be from 30 ppm to 660 ppm at the end of tenth year, the totally ownership (penetration) is close to 0.378%, it still is a low penetration ratio in India even WDIRC listed in market for ten years. However the revenue, manufacture cost and profit these three also present an ascending trend, the profit earned from India is about $ 8.197 million at the tenth year in an exclusive market, it owns a huge market and profit in this market. Totally according to our prediction and assumption, the selling in India will be up to 940,916 sets, even this; the penetration ratio is still lower than other consumption electric products such as TV, Refrigerator, Air conditioner, and Wash machine.
Table 2 To estimate the selling of WDIRC in India
How about the annual growth rate for selling WDIRC in India market; Fig. 3 shows the result. Here the calculation of revenue can use this equation as “WDIRC’s Revenue = Annual growth rate * Year + Baseline”, the formula can be written in a mathematic equation in Figure. According to this regression by data simulation, the annual growth rate it take about 4M per year (r2 =0.9846), in other words, by averaged the annual revenue is 4M in India market for selling WDIRC products during the first decade.
Fig. 3To estimation the revenue of WDIRC selling in India market
3. Rice selling
A ten-years forecast to WFR sale, after WDIRC launched in India market, is presented in Table 3. The first year since the marketing of WDIRC, online/offline deals for WFR sale are 246,121 kg, here the assumptions of population, rice consumption, sharing of WFR, online buying rate and market sharing are 1,326,801,576, 74.20, 0.01%, 5.00%, and 50%, respectively. How to calculate the WFR volume by online/offline sale, Eq. 1 is the equation for calculating the WFR sale volume.
Eq. 1 SaleVolume=Population x RiceConsumption x WFRratio x On/OffBuyingRatio x MSharingRatio
(eg. 246,121= 1,326,801,576 x 74.20 x 0.0001 x 0.05 x 0.5)
The use rate of WFR is set as 0.00019 kg/person-year. Based on this, we can get the annual revenue is $ 123,061 (WFR priced as $0.5), and the profitability is set to 10%, so the profit that will earn $ 12,306. Changing with the time, the ratio of WDIRC in kitchens will increase and cause the use of WFR increasing. We assumed the series of growth rate (G.R.) by years is 1, 6.41, 6.54, 10.84, 20.10, 21.25, 30.54, 36.67, 39.89 and 43.03. G.R. it is based on the prediction of WDIRC’s growth. By this series of G.R., both revenue and profit, they will also be presented like this serial when the dealing cost of WFR through online/offline transaction is keeping constant. Whatever the cost of online/offline transactions depends on the volume of WFR’s selling, so if the volume with time is scaling up, the dealing cost will be significantly lowered, in other words, the profitability with time will increase more than our prediction. If all hypotheses are true, the profit in tenth year will approach to $ 529,546. Eq. 2 calculates the penetration of WFR which to be used in this country by people. From this indicator (URate of WFR), we can see the level of penetration of WFR, even at the tenth year, the level of WFR use rate in India is still underestimation, that’s meaningful for us to optimistically think, the use rate of WFR can be easy completed and it will be grew up more than our prediction.
Eq. 2 URate of WFR = SaleVolume of WFR / Population
(eg. 0.00019 = 246,121 / 1,326,801,576)
Table 3 To estimate the selling of WFR in India
Regarding the revenue of WFR selling in India, Fig. 4 shows the result. This is a prediction by data simulation according to our assumption, the regression could be calculated as “WFR’s revenue = Annual growth rate * Year + Baseline”. The result shows the annual growth rate is 614.241k per year (r2=0.9782), in other words, the increasing of revenue of WFR selling in India is 614.241k dollar per year. This growth can help the company to maintain its team in the local market for servicing customers.
Fig. 4 To estimation the revenue of WFR selling in India market
4. To summarize the revenue and profit
Here according to the estimations above, we summarize the incomes from sales of WDIRC and WFR in India. Both revenues and profits are presented in Table 4. In the first year, the products of WDIRC and WFR are unfamiliar with Indian people; namely the recognition and acceptance aren’t well to local consumers, so on the beginning (1st year) sales would be not good and the totally revenues and profits will be $ 1,986,124 and $ 384,919, respectively. Both of them will increase with years when selling with good experiences and promotions. Through our forecast, at the end of tenth year, the profits of WDIRC and WFR will be up to $ 8,197,450 and $ 529,546, and the totally profit will be $ 8,726,996, this is a huge profit which be created in Japan market by our novel products and services.
Table 4 To estimate both revenues included WDIRC and WFR selling in India
Totally the revenue of WDIRC and WFR (2W) selling in India market can be shown in Figure 5 The 2W revenue in first year is 1.986M dollars, after that the growth rate of revenue is 5M per year, this is a simple regression by mathematic model to predict the revenue on product selling. In practice, there are other factors that need to be considered much more, it could be higher than this or lower. Whatever by this calculation let us to trust that the market it always be there.
Fig. 5 To estimation the revenue of WDIRC and WFR selling in India market