Opportunities for European companies in the Indian spirits market

Abstract

The main goal of this paper is to assess the opportunities for European companies in the Indian alcohol drinks market and more precisely in the spirits market. The whole market, and especially the spirits one, went through a strong growth during the last five years, with a CAGR close to the 12% for the period 2000 – 2005. This trend, coupled with the emergence of a middle-class aspiring to experience a European lifestyle and whose disposable income now allow them doing so let us think that there are opportunities to exploit. Of course, entering the Indian market is not an easy task for European companies, used to a totally different way of working. Furthermore, the companies will have to deal with weighty barriers, such as the highly regulated production and selling framework, different in each state, as well as with the high and complex tax and duties levied on intra states sales and on imported products. This paper is divided in two main parts. The first part is dedicated to a descriptive analysis of the Indian alcohol drinks market as a whole, with an emphasis on the spirits market. The market evolution in terms of volume and value, as well as the market forecasts, the main players, the different products, the distribution channel and the taxation framework will be studied in details. The second part will assess the opportunities for European companies, based on the part one data as well as our personal findings and feelings about the future customers needs. We will begin our analysis with a macro-segmentation, in order to divide the market in four main parts, each of them with its own characteristics. In this perspective, we will determine the products that fulfill the needs of each of these customers and determine their actual life-cycle level. At this level of the analysis, we will target one type of customer. In this framework, a positioning map will be constructed as well as a brief description of the marketing mix fitting with the product that fits with the customers. A five forces Porter analysis will also conducted in order to determine the attractiveness of the market as a whole.