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From crowdsourced shopping to new ways to go green, here are the trends that will define opportunity next year.

ON THE GROWTH PATH
A burst of creativity ahead
Looking at the revised growth projections announced early December by the Indian government, one wonders if the recession ever visited our country. The officials in the government offices in Delhi have enhanced the economic growth projection for 2010-’11 to 8.75 percent, with the possibility it could breach the 9 percent mark, but warned the situation could be more volatile due to a spillover of Europe’s economic woes and an increase in global food prices. The earlier growth projection by the finance ministry was 8.5 percent.

These statistics were revealed as a part of the Mid-Year Analysis 2010-’11 placed in Parliament. A resurgent Indian economy also means high growth and innovation among SMEs, often described as a growth engine of the Indian economy. Resource constraints are stimulating great business practices among SMEs and feeding innovation, and the survival rate of new ventures is also improving.

Innovative workplace solutions provider Regus polled the opinions of business owners worldwide to obtain a snapshot ‘state of the nation’ picture of the SME sector in November 2010. This survey showed that Indian SMEs are more bullish on recruitment than their counterparts abroad, with two-fifth of entrepreneurs (40 percent) surveyed saying they will go on a hiring spree in the next six months compared to the 36 percent global average. About 78 percent of businesses are flexible about their employees’ working location, 37 percent net intend to add staff, and fully 60 percent of businesses plan to hire mothers returning to the workforce.

With such high growth at the cusp, innovation among SMEs is also catching up. Eric Jackson, innovation specialist and VP of research and development at Gap International, a global management consulting firm in Philadelphia, says, “The world is screaming for innovation, and companies can capitalize on the resources they already have to spark the next possibilities.” So forget about the recession. Since the financial crisis laid waste to business as usual, the world is brimming with potential. The economic future will be populated by the movers and shakers, who even now are poised for greatness. Just ask Socrates, who doled out this gem more than two millennia ago: “Let him that would move the world, first move himself.”

IT’S THE SHIVERS (AGAIN!)
They age. Opportunities bloom.
Though the young in India rock the world with their abilities and achievements, the senior citizens are not to be neglected. A special report carried by The Statesman in November 2009 says that in France, it took 120 years for the grey population to double from 7 percent to 14 percent.

However, in India, the grey population has doubled in 25 years. Though a majority of India’s population is below 35, there is also a growing number of the ageing population who need specialized care and services. Take smart homes for example. The global smart homes market is expected to reach a size of Rs.60,300 crore by 2014, growing at a rate of 16.5 percent from 2009 to 2014. Smart homes enable senior citizens to live independently for much longer spans of time.

And senior citizens in India are living long. The same The Statesman report mentioned above spells life expectancy in India as 62 years today vis-à-vis 20 years in the beginning of the 20th century. Hidden in the maze of this demographic data lie many opportunities for entrepreneurial ventures. Sectors like healthcare, retirement homes, financial consultancy, media, and flexi-work and second career consultancy all hold immense potential.

Besides, these days, being old doesn’t automatically mean you lose cool points. Responding to the needs of India’s burgeoning silver population, the Tata Institute of Social Sciences (TISS) located in Mumbai launched a one-year diploma course in gerontology in 2008. Two important subjects were added to the curriculum in 2010: media and elderly; and creative arts and fieldwork for elderly.

Here’s the clincher: Hollywood got in on the cool retirees movement with the fall action flick RED, which stars Bruce Willis, John Malkovich, Helen Mirren and Morgan Freeman as four retired and extremely dangerous (RED, get it?) ex-CIA agents—think The Bourne Identity, but funny, and with old people. “Old man, my ass,” Malkovich’s character smirks in one scene, right after taking out a rocket with a single bullet.

GET PACKING
Travel and tourism take off
Mark Twain described India as ‘the one land that all men desire to see, and having seen once, by even a glimpse, would not give that glimpse for the shows of all the rest of the world combined.’ Looking at the growth figures of the travel and tourism industry in India, his statement doesn’t seem to be far from the truth.

As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world’s attractive destinations. The country ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources with many world heritage sites, both natural and cultural, rich fauna, and strong creative industries. The India travel and tourism industry ranked fifth in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

Considering the immense business potential and consumer spending patterns, the industry is on the cusp of unparalleled growth prospects. The government is also upgrading the country’s infrastructure in the form of national highways, airports, etc. This will indirectly boost the tourism industry further. The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows was pegged at Rs.9,765 crore from April 2000 to September 2010, according to the Department of Industrial Policy and Promotion (DIPP).

The Indian hospitality industry is projected to grow at a rate of 8.8 percent during 2007-’16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open-sky policies made by the government are all aimed at propelling growth in the hospitality sector.

The Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) in India and Foreign Exchange Earnings (FEE) from tourism on the basis of data received from major airports. As per the last available data, FTAs in India during the period of January-October 2010 were 4.32 million with a growth rate of 9.9 percent.

That’s only part of the story, though. As the industry increasingly shifts online, opportunities are emerging. The app market, for instance, has swelled from virtually nothing to billions of rupees in just a few years, and smartphone owners are loving their access to a gaggle of Wi-Fi finders, flight status updaters, local restaurant finders, budget booking assistants, translators and more. Websites offering unique travel-oriented services have made a strong showing too. So, there is no looking back for this dynamic sector.

Social shopping
Click. Chat. Buy.
If a report of Inside Facebook Gold is to be believed, then in May 2010 India ranked as the second-most growth-oriented country for Facebook in the world after Indonesia. India added almost one million users to Facebook’s growth, just a shade under Indonesia. These figures give only a glimpse of the social networking revolution that is unfolding in our country. Everything that Indians do online now is social. Rediff.com has made gaming social through its new offering PlayGully where users can boast about games and share achievements with friends. e-Commerce remains no exception. Gone are the days of one-way, private online shopping.

Research shows that social media users spend, on average, one and a half times more time online than the typical web surfer. In fact, heavy Facebook users spent an average of Rs.3,015 online in the U.S. during the first quarter of the year—compared with less than Rs.2,250 for the general netizen, according to recent comScore research.

The first to really socialize shopping were online flash sale sites, where steep discounts are offered to members for a limited time. These sites rely heavily on online conversations to drive sales. Smartly so, because a recent MediaPost study revealed that 59 percent of consumers rated ‘personal advice from friends’ as the most influential source of information for their purchase decisions, and 51 percent of Twitter users reported that they follow companies, brands or products on social networks.

The viral effect that social networks generate cannot be taken lightly. Opportunity lies hidden in their power.

HOME SWEET HOME
Repairs to green living spaces, wallets open
Let the hammering begin. The monsoons are finally over so home owners are back to planning and redesigning their living spaces. As job prospects improve and savings get back on track, the home repair and greening movement is expected to gain momentum.

In a country like India with a burgeoning population, the demand for houses, shopping malls, hotels, commercial complexes etc is always on the rise.
The opportunity here lies in green spaces. A green home is one that is ideally constructed with a smart design, and requires minimal maintenance. In 2009, the SatyaVani Group of Companies, a Hyderabad-based real estate firm, launched one of India’s biggest green home townships on the Warrangal Highway in Andhra Pradesh.

Architects and builders have begun using green principles like water harvesting and waste management in their projects. The use of eco-friendly building materials like fly-ash cement and blocks, steel and tiles, recycled aluminum, bamboo-based products, green roofing products and so on is also on the upswing. Entrepreneurs can meet this emerging demand with innovative products and services.

Just like building material, on the technology front too, there is a lot of scope. Energy saving air conditioners, high performance glass windows, water saving solutions, composting toilets, and efficient building management systems are just some of them. With the increasing number of green projects in the country, the Indian Green Building Council (IGBC) sees a great future in going green. The council has also introduced a system of rating green homes. Who knows what lies ahead? Maybe designer homes which are both trendy and green…

VITAL SIGNS
Healthcare’s new life
Just take a look at these numbers. The Indian healthcare sector is expected to become a Rs.12,60,000 crore industry by 2020 with spending on health estimated to grow 14 percent annually, according to a report by an industry body. “Healthcare has emerged as one of the most progressive and largest service sectors in India with an expected GDP spend of 8 percent by 2012 from 5.5 percent in 2009,” the report said.

At present the sector is estimated to be around Rs.1,80,000 crore. As per a study by an industry body and Ernst & Young, India would require another 1.75 million beds by the end of 2025. The rural healthcare sector is also on an upsurge. The Rural Health Survey Report 2009, released by the Ministry of Health, stated that during the last five years, the rural health sector has seen the addition of around 15,000 health sub-centers and 28,000 nurses and midwives.

A new report titled Medical Technology in India: Enhancing Access to Healthcare through Innovation released by PricewaterhouseCoopers and an industry body states that the size of the Indian medical technology industry may touch Rs.63,000 crore by 2020 from Rs.12,150 crore in 2008 on account of strong economic growth, higher public spending and private investments in healthcare, increased penetration of health insurance and emergence of new models of healthcare delivery. The Indian health insurance market is also riding high. As per a report by research firm RNCOS released in April 2010 titled‘Booming Health Insurance in India, the Indian health insurance market has posted record growth in the last two fiscals (2008-’09 and 2009-’10).

Moreover, as per the report, the health insurance premium is expected to grow at a CAGR of over 25 percent for the period spanning from 2009-’10 to 2013-’14.

Opportunities to come up with new technological innovations to service growing healthcare needs, to invest in healthcare infrastructure and to offer TPA and other services related to health insurance abide in plenty for entrepreneurs.

GREAT EXPECTATIONS
Craving affordable luxuries
Luxury is associated with being cool, sporting a certain status and enjoying the finer things in life. Who doesn’t crave a unique, exclusive watch or a bottle of rare wine? The burgeoning Indian middle class is using the rise in disposable income to fuel its passion for luxury.

Professor James Twitchell (2002) commented on the democratization of luxury and the changing consumer psychology: “These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not stay put. They now have money to burn. The competition for their attention is intense, and their consumption patterns—if you have not noticed—are changing life for the rest of us.”

According to a study by American Express, Inside the Affluent Space, the Indian consumer has a desire to prove that ‘I’ve made it.’ He is an aspirer and for him luxury is a reward, which is a mindset very different from a European consumer for whom luxury is an experience.

The India Luxury Review valued the luxury goods market in the country at Rs.19,350 crore in 2007 and the market has grown manifold since then. As per available statistics, the Indian economy has one of the highest disposable incomes and 1,26,000 HNIs (High Networth Individuals) and another 3 million households earning above Rs.10 lakh, who are also ready to consume luxury. As per CII estimates, the user base is huge and the timing ripe to enter this market.

CII organized the second edition of its Luxury Goods Forum as part of the Commonwealth Games Business Forum held in October 2010. This forum was aimed at fostering cross-country collaborations and proposed a way forward to make the luxury retailing sector grow further and faster in India.

The luxury segment could also receive a further boost from the likelihood of the opening up of the retail sector in the months to come.

LET’S GET PHYSICAL
Fitness flexes market muscle
Yeah, you’re busier than ever. Yeah, your money is tighter than ever. But, no, it’s not stopping you from staying in shape. Or at least trying to. These days, more and more folks are pursuing easy, inexpensive ways to work out—and, in the process, they’re powering a boom in the fitness sector.

The educated urban Indian is becoming increasingly health conscious which is spurring a rise in gym and fitness club memberships. As per industry data, the fitness market in India is estimated to be worth around Rs.2,500 crore and growing at about 40 percent year-on-year. The segment has only about 20 organized players forming about six percent of the market. Overall, it still remains a fragmented industry with diverse players at the local level.

Another aspect of fitness is training equipment. As more people join the workforce, having options and products that they can use anywhere—including for a home-based workout—makes sense. Bharatbook.com recently released a report mapping the fitness equipment market in India. As per this report, the market is witnessing significant growth as Indians increasingly become health and fitness conscious. The market was estimated to be worth Rs.1250 crore in 2008 and is expected to reach Rs.6330 crore by 2012. The end-user segments include individuals using fitness equipment at home and institutions like health clubs and corporate houses.

And as technology pervades every aspect of our life, fitness is not lagging too far behind. The recent onslaught of low-cost iPhone fitness apps like iFitness and iWeight Deluxe adds to the ease of staying healthy away from the gym. However, it spells a hitherto untapped opportunity for app developers in a country like ours where traditional wellness/exercise forms like yoga have actually taken shape and been gifted to the world.

©Entrepreneur January 2011

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2011, opportunity, trends