Selling to India

We may be taking a few irradiated mangoes from India, but I wonder if the real opportunity doesn't lie in that country rather than ours.

The FAS has released a report in early May that summarizes recent news from the country. Here is an excerpt:


Indian incomes could triple and its middle class could grow more than ten times, to 583 million by 2025, from the current 50 million, if its economy grows at an average of 7.3% for
two decades, says a McKinsey Global Institute report, the research arm of the McKinsey & Co. Rising incomes will drive consumption, with aggregate consumption set to quadruple by
2025 to Rs. 70 trillion ($1.7 trillion) from the present Rs. 17 trillion, the report says. This could make India the world’s fifth largest consumer market by 2025 from the current twelfth largest. “The drivers for consumption will be economic growth, more people entering the
workforce, and a change in spending patterns,” said McKinsey’s Managing Director, Adil
Zainulbhai. The report says urban consumption will form 62% of the total in 2025, from 43% currently. Over the next two decades, 79% of all spending will come from the middle class and rich, compared with the current 75% spending from the deprived. As poverty is alleviated, Indians will spend less on basic necessities. Spending on food, beverages, and
tobacco will drop to 25% in 2025 from 42% in 2005.

TK: When opportunity knocks, can Wal-Mart and Starbucks be far behind? Of course not! Starbucks is scheduled to open its first store in India next year, with about 100 stores to open in the first year. Wal-Mart has a joint venture, but local sensibilities won't allow any retail stores to bear the Wal-Mart tag. The FAS reported Wal-Mart Stores Inc. will open a cash-and-carry (wholesale) joint venture operation with Bharti Enterprises by the middle of 2008. The plan calls for stores in 75 cities over the next five years.