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A CII-KPMG report released today shows that the Services sector contributed about 61 per cent to India’s <keyword id="35050" type="CITY" weightage="40" keywordseo="gdp">GDP</keyword> in the year 2014-15, thereby making India the second fastest growing services economy in the world. 
 
Moreover, it has also been showing strong growth of approximately 10 per cent per annum. The report also cites the key services sectors which are driving this growth - IT, telecom, tourism, media and entertainment, healthcare, management consulting, logistics and professional services. 
 Both, this report and the <keyword id="6354424" type="ORGANIZATION" weightage="40" keywordseo="World-Bank">World Bank</keyword> finding that this sector is contributing in poverty alleviation more than agriculture and manufacturing, has proven that Services is increasingly becoming critical to the development trajectory of our country. 
 Rajat Wahi, Partner and Head, Consumer Markets, <keyword id="50041" type="CITY" weightage="40" keywordseo="KPMG">KPMG</keyword> in India, said, “India’s young demographic profile combined with its rising literacy rate, offers it a significant competitive advantage vis-à-vis other developing economies. Along with the ‘Make in India’ initiative that is striving to boost the <keyword id="6395867" type="UNKNOWN" weightage="40" keywordseo="manufacturing-sector">manufacturing sector</keyword>, the Prime Minister has outlined a vision to represent India as a world-class services hub across sectors. Multiple stakeholders need to work cohesively to help achieve this vision.” 
 He further added, “Technology, innovation and creativity are rapidly redefining the <keyword id="47890" type="ORGANIZATION" weightage="40" keywordseo="global-economy">global economy</keyword> with digitization collapsing distances and transcending borders. In the process, the impact of the services sector is turning out to be manifold and significant. India has pride of place as the fastest-growing service sector nation globally. To keep the momentum going, it is critical that stakeholders, investors and policy-makers are best equipped in strategizing for the future and tapping the best markets globally.” 
 
Notably, India’s share in global services exports was 3.2 per cent in 2014-15, double that of its merchandise exports in global merchandise exports at 1.7 per cent, placing India in the eighth place currently amongst the top ten exporters of service in the world. 
 
(Image credits: NYTimes)

A CII-KPMG Report shows Services Sector growing at 10% annually, contributing 61% to India’s GDP

Unexpectedly, 35 per cent of the sales of <a href="http://www.businessinsider.in/searchresult.cms?query=luxury+brands+">luxury brands</a> in India are coming from non-metro cities like Aurangabad, Ludhiana, Kochi and Bellary, and it has posed a challege to <keyword id="6574071" type="UNKNOWN" weightage="100" keywordseo="Luxury-brands">luxury brands</keyword> who now need to try much harder to tap the ready to spend but very smart consumer group in such places, according to the new <keyword id="3149795" type="UNKNOWN" weightage="100" keywordseo="CII-IMRB-report">CII-IMRB report</keyword>. 

	The report, titled 'Emerging Consumers of Luxury, India tier 2 and 3', states that despite low engagement and outreach by luxury brands, sales through references in tier 2 and tier 3 cities are twice as much as those in the metros, and that the growth rate of luxury product and service consumption these cities has been outpacing metros for the past three years. The key Indian cities which contribute to the rising luxury and premium goods consumption are Ahmedabad, Pune, Nagpur, Hyderabad and Ludhiana, which account for 16 per cent of total luxury sales. 
 

	The report is based on data collected from both primary and secondary sources and respondents included both male and female high-networth individuals in the age group of 20-55 years with an annual household income of over Rs 1 crore. The report covered tier 2 and tier 3 towns like Chandigarh, Ludhiana, Kanpur, Coimbatore, Anand, Bhopal, Patna, Kochi and Rajkot. According to the report, consumers valued quality the most in luxury products at 75 per cent, followed by the luxurious aspect (69 per cent), style (64 per cent), modernity (63 per cent) and reliability (61 per cent). 
 "I definitely feel that there are a lot of luxury buyers in the interiors of India, a section that is still largely unexplored by brands. We've only touched the tip of the iceberg in the main metros," said Sanjay Kapoor, founder and managing director of Genesis Luxury, which sells brands like <keyword id="157707" type="PERSON" weightage="100" keywordseo="Jimmy-Choo">Jimmy Choo</keyword>, Bottega Veneta, Canali, <a href="http://www.businessinsider.in/searchresult.cms?query=Armani+Jeans">Armani Jeans</a> and Giorgio Armani. "A lot of our clients from smaller towns visit our stores in the metros regularly. These people also travel overseas and shop there. At times we also organise home shopping for some key clients upon request," he added.
 While men like to spend on <keyword id="6362766" type="PERSON" weightage="100" keywordseo="Apparel">apparel</keyword>, accessories as well as gadgets and cars, according to the report peer pressure plays an important role in the decision-making of women, who like to buy jewelry, apparel and accessories. Younger people up to age 35 showed an inclination towards financial and individual values compared with the older ones, while consumers above 35 exhibited an inclination towards the uniqueness of the product. 

	"The smaller cities have huge spending capacities and we end up underestimating them. It is our privilege to have a loyal customer base from these cities. People are indulging in luxury of all kinds. Be it cars, watches, fine dining, thematic weddings and elaborate wedding trousseaus and luxury holidays. High-priced watches from the Swiss watch brands are preferred and bought and we provide a huge variety which they keep coming back for," said Yasho Saboo, CEO and founder of Ethos Watch Boutique, which sells brands like Carl F Bucherer, Omega, Rado and Longines in India. 
 Arvind Singhal, chairman of <keyword id="156794" type="CITY" weightage="100" keywordseo="Technopak-Advisors">Technopak Advisors</keyword>, said the top 14-15 cities are driving the bulk of growth for luxury brands and consumers in cities like Chandigarh and Ludhiana are very well acquainted with them. Rajat Wahi, partner and head consumer markets at <keyword id="50041" type="CITY" weightage="20" keywordseo="KPMG">KPMG</keyword> in India said luxury, automobile and jewellery brands have gone beyond the trunk-show model and have set up showrooms, retail outlets in tier 2 and smaller cities. 

	"This is primarily since the market for luxury automobiles and jewellery outside the metros is now larger. A German luxury car maker estimated 60 per cent of its sales to be outside of Delhi and Mumbai," he added. 
	 
	(Image credit: BCCL)

India’s luxury brand market to be driven by tier 2, 3 cities: Report

As the number of people indulging into online shopping is increasing, studies suggest that the <keyword id="35621" type="UNKNOWN" weightage="80" keywordseo="e-commerce">e-commerce</keyword> spending in India may hit $16 billion (nearly Rs 1 lakh crore) by 2018. These figures have been issued by industry body <keyword id="6358345" type="ORGANIZATION" weightage="60" keywordseo="CII">CII</keyword> and <keyword id="50041" type="CITY" weightage="80" keywordseo="KPMG">KPMG</keyword> suggests a recent PTI report. It further added that the number of Indian online buyers is expected to grow to 128 million by 2018. 
 However, it won’t be a smooth sail for the <keyword id="1073727" type="UNKNOWN" weightage="80" keywordseo="e-tailers">e-tailers</keyword>. On the road, they are bound to be hit by road blocks and face challenges such as security, data breach and interoperability. This may act as a barrier for the overall framework, says the PTI report. 
 Not just this, the success of e-Commerce also depends on the kind of digital infrastructure that e-tailers have. <keyword id="146882" type="COMPANY" weightage="60" keywordseo="KPMG-India">KPMG India</keyword> partner K Raman, says "Digital infrastructure is a key enabling technology for a connected and instrumented world. It is expected to create tremendous opportunities for various technology players across verticals like smart cities, smart utilities, smart healthcare, smart transportation and more in India." 
 He also added that players of the industry as well as the society also need to <keyword id="382268" type="UNKNOWN" weightage="60" keywordseo="leverage">leverage</keyword> digital infrastructure in a bid to create more opportunities and economic value in the country. 
(Image: Thinkstock)

​E-tailing Expenses To Touch $16 Billion By 2018

<keyword id="18635" type="CITY" weightage="100" keywordseo="Amazon">Amazon</keyword> is expanding its logistics services and placing big bets on delivery services. The online marketplace wants to deliver products of registered sellers even if the orders are placed on its rivals sites such as <keyword id="6354742" type="COMPANY" weightage="100" keywordseo="Flipkart">Flipkart</keyword>, <keyword id="541988" type="COMPANY" weightage="20" keywordseo="SnapDeal">Snapdeal</keyword>, etc. <keyword id="6354743" type="COMPANY" weightage="20" keywordseo="Amazon-India">Amazon India</keyword> wants to enhance its distribution system. Besides, it also wants to enter food delivery services and compete with Swiggy. Amazon will soon float a pilot project for its logistic services with 300 sellers for this who are registered in its marketplace, three industry executives aware of the plans told ET. The company's own logistic service is undertaken by <keyword id="3762367" type="UNKNOWN" weightage="20" keywordseo="Amazon-Transportation-Services">Amazon Transportation Services</keyword> (ATS). "Amazon wants to build ATS into an independent logistic service which competes against Flipkart's Ekart and other independent logistic services like Blue DartBSE -1.24 % and FedEx. It has started with its own sellers, but eventually will even look at offering logistic services to brands and other businesses. ATS has recently hired a lot of executives from leading courier companies,” one of the industry executives told ET. The logistic sector specific to online retailing in India was valued at $0.46 billion in 2016 and is projected to witness a CAGR of around 48% in the next five years to reach $2.2 billion by 2020, according to a report by KPMG and CII.

You Searched For "CII KPMG report" and got 4 results

A CII-KPMG Report shows Services Sector growing at 10% annually, contributing 61% to India’s GDP

BI India Bureau

India’s luxury brand market to be driven by tier 2, 3 cities: Report

BI India Bureau

E-tailing Expenses To Touch $16 Billion By 2018

BI India Bureau

Amazon is expanding its delivery system; Your Flipkart order could be delivered by Amazon

BI India Bureau

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You Searched For "CII KPMG report" and got 4 results

A CII-KPMG Report shows Services Sector growing at 10% annually, contributing 61% to India’s GDP

BI India Bureau

India’s luxury brand market to be driven by tier 2, 3 cities: Report

BI India Bureau

​E-tailing Expenses To Touch $16 Billion By 2018

BI India Bureau

Amazon is expanding its delivery system; Your Flipkart order could be delivered by Amazon

BI India Bureau

Popular Keywords

Buying Guides

E-tailing Expenses To Touch $16 Billion By 2018