China opened the world’s longest cross-sea Hangzhou Bay Bridge last week running 22.4 miles from the port city of Ningpo across Hangzhou Bay to reach Shanghai. As part of an effort to boost economic integration and development in the Yangtze River Delta, it is designed to slash travel time between Ningbo and the financial hub Shanghai from four hours to two and a half.
Since its opening on May 1, police have fined more than 300 drivers, most for driving too slowly or illegal parking on the emergency lanes while enjoying the ocean view and taking photos. The $1.7-billion bridge’s much publicized sightseeing platforms in the middle of the span will not be ready for tourists for another two years, local media have reported.
Reuters, People's Daily Online
The IPO of the Chinese B2B web portal Alibaba.com last November raised a near-record $1.5 billion—at the time trailing only the $1.7 billion generated by Google Inc. in 2004 for the largest IPO haul by an Internet company.
The Alibaba Group—the parent of Alibaba.com—is China's most impressive Internet outfit. Founded in 1999, it comprises six main businesses. In addition to its B2B and the Taobao consumer auction portals, it owns China's most popular Internet payment company, Alipay, which solved the credit card problem with a bank transfer workaround. Alisoft, its Internet-based business management software, delivers tools that allow Taobao customers to communicate before making deals. In 2005, Alibaba acquired its search engine Yahoo! China. The newest entry, Alimama, allows Web publishers to list their advertising inventory, complete with prices and other pertinent information, and then advertisers can scroll for publications that match their needs and click to complete a deal. Alibaba has 4,400 employees working in 30 sales and marketing offices in China, Europe, and the United States.
Corporate Counsel, May 1, 2008
Weblog Strategic Sourcing Europe on Alisoft
Wikipedia on AliBlog
Customer Communications in North America
On 3 April 2008, Alibaba.com started their first official blog targeted for the international small and medium sized enterprise (SME) community, with a special emphasis on communicating with merchants in the United States. Their blog, the AliBlog, is marketed as "the latest word from Alibaba.com on our news, events, and community" while promising to be an official source for information and opinion from an employee's perspective on Alibaba.com.
As is my custom, I am highlighting the latest issue of New Perspectives Quarterly, a magazine specializing in big-ticket ideas and issues contributed by thought leaders and diplomats from around the world. The Winter 2008 issue lists the introductory Commentaries for issues of NPQ from 2001 - 2007. Topics covered are 'Civilizations Out of Sync', 'The Future of Anti-Americanism', 'No Shortcuts to the "End of History" ', "From the Faith Gap to Post-Liberalism', 'Globalization's New Left', 'DeGlobalize the Jihad', and 'China: From Democracy Wall to the Shopping Mall and Back', among others. Actual articles included are 'Modernization Will Arrive in Arabia From Asia', 'India: Sacred Cows and Software', and 'Hollywood in the World', for example. And the authors or people interviewed in these issues over the years? Samuel P. Huntington, Rem Koolhaas, Jorge Casteneda, Kofi Annan, General Wesley Clark, Lester Thurow, Amartya Sen, Robert McNamara, Coretta Scott King, Francis Fukuyama, Vladmir Putin, Mohamad Mahathir, Hillary Clinton, Edward Said, Joseph Stiglitz, Paul Wolfowitz, Mohammed Yunus, Henry Kissinger, Carlos Fuentes, Al Gore, Gore Vidal ... and the list goes on. Read all this and more in the latest issue on the Jackson periodical racks.
Atlantic magazine January / February 2008 asks the $1.4 trillion question: Are we playing the Chinese for suckers, or are they playing us? Author James Fallows ponders the vast sum that the Chinese government has mostly placed in U.S. Treasury notes, an amount that increases roughly $1 billion per day. By his calculations, every person in the United States has over the past 10 years borrowed about $4,000 from the People's Republic of China. But there are potential future risks involved -- political and economic. And China has its own hopes. Chinese economic movers and shakers like Lou Jiwei and Gao Xiqing may in future play a far bigger role in U.S. economics than Americans would prefer. What will be the answer to the $1.4 trillion dollar question? Read more
The World Economic Forum in Switzerland came to a close this past weekend. The theme this year was The Power of Collaborative Innovation. On the agenda were Anti-corruption, extreme poverty and climate change and more which you can watch online.
2008 is the Year of the Rat, or the Year of the Mouse, as Disney prefers to call it and so enters Mickey Mouse to the China market again. The Disney campaign, called "Mickey brings you the magic of family happiness," launched in early January.
Cultural sensitivities runs high in China, however, the zodiac has helped Disney reopen doors. "Disney is about celebration, bringing families together. We did some research and the idea was very well received among Chinese," said Lance Diaresco, Hong Kong-based VP, marketing for China at Disney. To celebrate the Year of the Mouse, CCTV is putting back Mickey Mouse Clubhouse program on air during February and to rerun the show during the summer.
With limited exposure on television, Disney and BBDO Worldwide in Shanghai revamped the Chinese-language Mickey Mouse web site. With Touchmedia, a Shanghai-based media company, a Disney interactive game platform was created in taxis in China's first and second tier cities.
Read more in AdAgeChina, January 30, 2008
As a world-class provider of software and business services, India is creating a huge urban middle class. By 2025, household spending could more than quadruple, generating the 5th-largest consumer economy on Earth, up from 12th now. About 400 million Indian city dwellers—nearly 100 million more people than the United States has today—will enjoy comfortable living standards.
The average annual household spending on necessities, i.e. food and apparel, went down from 61% in 1995 to 48% in 2005. The projected discretionary spending including housing, transportation, education, and healthcare, will be 61% in 2015 and 70% in 2025.
Reported in McKinsey Quarterly Chart Focus Newsletter, January 2008
More on the subject in August 2007 issue of McKinsey Quarterly.
The topic of December issue of Red Herring is the rapid development of high-tech industry in Israel. You’ll find an interview with Orna Berry, Israel Venture Association Chair, who attributes the country’s success in maintaining the leading position in today’s global economy to huge investments in the early-stage ventures among other factors. In the interview with Shimon Peres, the Israeli president reveals some major directions of developing the economy such as massive switching to electrical cars in the near future and becoming an incubator of the solar energy. Another set of articles talks about close relations between Israeli new enterprises and Silicon Valley in creating new ventures and collaborating with VC companies such as Benchmark, Sequoia Capital, and Greylock Partners among others. You’ll find an article devoted to the state of biotech research in Israel, its successes and challenges. For more, read the magazine in Jackson Library's Periodicals section.
Can there be peace in a glass of cabernet? In Lebanon’s Bekka Valley they are harvesting grapes that will produce more than 4 million bottles of wine each year. The industry is succeeding, despite Lebanon’s diverse demographics. Christians, Sunni and Shiites work side by side toward a common goal – an exceptional bottle of wine. Religious differences are set aside as workers get to know each other as fellow laborers and human beings. Most Bekka Valley wines are exported, but the focus is to build up domestic sales. This concept may seem surprising in a country where most of the population is forbidden alcohol, but at home behind closed doors, winemakers smile, it is different. Here's a toast -- and a wish -- to an acceptance of differences.
"China is able to package their government programmes, their state-owned enterprises, their aid programmes in ways that the United States can't," said Ambassador Princeton Lyman of the U.S. Council on Foreign Relations at the U.S.-Africa Business Summit in Cape Town, 2007. Lyman described China's activities in Africa as "almost breathtaking. They've come with such vigor and such energy and resources."
Reported in allAfrica.com
'Made in China: From Tiananmen to Tainted Toys' is the focus of the latest issue of New Perspectives Quarterly. The Fall 2007 issue is now on the current periodical racks in Jackson Library. Included are articles '"Made in China" Label Won't Survive Without Rule of Law' with Minxin Pei, author of China's Trapped Transition: The Limits of Developmental Autocracy, 'Chinese Hacking Signals Age of Info Warfare' with former Director of the National Security Agency Bobby Ray Inman, 'Brangelina vs. Chinese Mercantilism in Africa' with former National Security Advisor Anthony Lake, 'Pakistan at a Crossroads' with former Prime Minister Benazir Bhutto, 'Countdown to War With Iran' with former U.S. chief negotiator on Middle East peace issues Dennis Ross, 'Is America on Course to Fall Like Rome?' with U.S. Comptroller General David M. Walker, and 'The End of Darwinian Evolution' with renowned scientist Freeman Dyson. In addition, a section highlights 'The 11th Hour', a documentary directed by actor Leonardo DiCaprio, and features comments by world thinkers such as Stephen Hawking, Paul Hawken, Paolo Soleri, James Woolsey, Mikhail Gorbachev and others. Come to the Library to learn more.
Japan has launched a program called “Innovation 25” with the goal to innovate Japan with an extensive long term plan extending to 2025 and beyond. In the September 17 issue of Red Herring dedicated to Japan, an article entitled Country Makeover take a look at the many initiatives the country is taking to make this work from dramatically increasing the number of foreign students at Japanese Universities to increasing investment in science and technology. The goal is to create a second wave of opening up Japan to the world.
Tomorrow evening (Thursday December 6) 4:15-5:30pm Kiyoshi Kurokawa, Science Advisor to the Cabinet of Japan will be at Stanford, as part of the Center for East Asian Studies, to speak on the topic Innovate Japan! among the topics discussed will be “Innovation 25”.
Chinese Premier Wen Jiabao concluded his four nation tour of Russia, Uzbekistan, Turkmenistan, and Belarus.
Wen Jiabao said that 2007 marks the beginning of a new decade for the two-way partnership. Wen said the Sino-Russian relationship should be stepped up and interactions should be made concrete. Viktor Zubkov proposed the establishment of mechanisms to ensure long-term, stable coordination.
The two premiers agreed to improve trade standards, regularize trade structure, launch aviation industry projects, energy cooperation, joint R&D in science and technology, conserve water resources as well as increase exchanges in education, culture, public health, tourism and sports.
Abstracted from CCTV.com
Rajiv Singh, vice chairman of DLF, India's largest developer, questioned whether a 9 percent plus growth rate is sustainable without corresponding infrastructure improvement. Infrastructure issues include meeting the demand on roads, ports, airports, power supply, and even getting drinking water to everybody. There is a shortage of homes, offices, and retail space. He estimated that the growth in these three segments would be 25 percent or more a year. Meeting this demand is not without challenges. Mr. Singh mentioned too much political freedom, too many legal rights, and too much media as the major deterrents in the system to support infrastructure fixes. Other problems include the land use law, land ceiling laws, special economic zones (SEZs), and urban renewal.
Possible fixes include utilizing land more efficiently by changing land policy to allow dense developments or high-rise developments; government stepping in to buy land at market rates from minority unwilling to sell; building new cities outside the main cities to avoid political issues such as slum relocation.
Below are more articles in McKinsey Quarterly on “Building a better India":
Upgrading India’s energy and transportation networks: An interview with a leading infrastructure builder (November 2007)
Securing India’s place in the global economy (October 2007)
India's executives: Confident in their economy and eager to hire (October 2007)
Creating a modern Indian city: An interview with Delhi’s chief minister (October 2007)
Clearing the way for robust growth: An interview with India’s chief economic planner (October 2007)
Nokia opened its first flagship megastore in Shanghai, its largest retail site worldwide to date. Nokia is the market leader, with nearly 30% share based on sales volume. Motorola and Samsung, meanwhile, have market shares of 18.5% and 10.8%, respectively, according to Analysys International. The new Shanghai outlet, located on Nanjing East Road in a prestigious fashion and business district, is the seventh of 18 planned flagship stores overall and is the second in Asia/Pacific, following Hong Kong.
By the first half of this year, the total number of mobile phones users in China exceeded 600 million. The number of subscribers has been increasing by an average of 6.76 million per month.
In an age of experience-driven consumption, retailers must do more than simple advertising and product placement, said Colin Giles, Nokia's China president in Beijing. Successful retail requires a personalized shopping experience for consumers to interact and become familiar with the products.
"A mobile phone is no longer a traditional communication device, as it has become part of our daily lives and represents a new lifestyle. The mobile device that you use is representative of your lifestyle, taste, and preferences--ultimately, who you are," said Mr. Giles at the opening ceremony last weekend in Shanghai.
Source: AdAgeChina
A short time back we blogged here about a coming event at Stanford. This is just a tickler to remind everyone again that Steve LeVine, formerly of the Wall Street Journal, will be on deck November 6, sponsored by the Freeman Spogli Institute, talking about his book The Oil and The Glory: The Pursuit of Empire and Fortune on the Caspian Sea. If interested, you will want to RSVP by November 2. Learn more at the event website.
Thomson, a media company, is the world's most transnational firm, according to the 2007 World Development Report from the United Nations Conference on Trade and Development (UNCTAD). The report's index of transnationality is calculated using the average of the shares of a firm's assets, sales and employment located abroad. Thomson has 97.8% of its assets, 96.6% of its sales and 97.3% of its jobs outside its Canadian homeland. Many of the top transnational firms are from small but rich countries, such as Switzerland, with limited domestic markets. Two notable exceptions are Liberty Global, an American telecoms company, ranked second in the study, and Honda, a Japanese carmaker.
Source: The Economist, 20 October 2007
Companies operating in China must find advantages that go beyond cheap labor. McKinsey Quarterly identified manufacturing concerns in China.
• signs of incipient wage inflation can eventually drive up labor costs
• waste is endemic in Chinese factories
• defect rates are high
• managers lack crucial skills in problem solving and industry-specific expertise
• high employee turn-over
• the rush to build new factories created overcapacity
• Chinese factories often make products in big batches and thereby creating large inventories
• poor coordination between different steps in the production process often created bottlenecks
• cultural norms stand in the way of addressing wasteful practices – hierarchical nature of Chinese organizations hinders the cooperation and joint decision making across departmental boundaries as well as up and down the chain of command
Read suggestions to closing the gap in McKinsey Quarterly, 2006 Special Edition available at Jackson Library.
 Author Steve LeVine, formerly of the Wall Street Journal and New York Times, will be discussing his new book The Oil and the Glory at the Freeman Spogli Institute on November 6. Subtitled The Pursuit of Empire and Fortune on the Caspian Sea, the book describes, among other things, how deals really get done in turbulent places abroad. To attend, please RSVP by November 2.
September's Far Eastern Economic Review leads off with the timely title "The 'Made in China' Stigma Shock". Other colorful articles include "China and the Subprime Scorpion", "China Mocks the Olympic Spirit", "Vietnam: Beyond Fish and Ships", "Storm in a Teacup Over Climate Change", and "Depoliticizing Comfort Women" -- as well as book reviews on an account of Pakistani struggles, a media law guide for Hong Kong, a portrait of Asians in classical music, a history of Asian business leaders, and a new book about Russia's colonial legacy in Tashkent. Editor Hugo Restall kicks things off by talking about the (occasionally weird) impact of China on today's world: how internal Chinese infrastructure spending caused the world's scrap metal prices to skyrocket -- leading to the sudden theft of manhole covers around the world. Read more in the September issue in Jackson Library.
Beijing will spend $526 million upgrading its subway system before the Olympics. The system has 4 lines totaling 114 km, carrying 2.1 million passengers daily, but it will have 9 lines totaling 200 km by 2008. The average waiting time will be reduced from 3 to 2.5 minutes. By 2020, the city plans to complete 19 lines totaling 561.5 km.
Source: XinhuaNews, McCann Worldgroup, posted at AdAgeChina
The Summer 2007 New Perspectives Quarterly has arrived at Jackson Library, with the usual fascinating mix of provocative pieces / interviews by a stellar cast of global authors, including Nobel Laureate Orhan Pamuk, former German Foreign Minister Joschka Fischer, Nobel Laureate Amartya Sen, eminent Princeton historian Bernard Lewis, French futurist Jacques Attali, Nobel Laureate Shirin Ebadi, Prime Minister Recep Tayyip Erdogan of Turkey, Nobel Laureate Nadine Gordimer and California Governor Arnold Schwarzenegger. The focus of the issue is the national struggle between secular and spiritual in today's Turkey: "The Two Souls of Turkey". But there are other topics as well. Read all about it in the issue in the Jackson Library current periodical racks.
The 2008 Summer Olympics are less than a year away and China has been working diligently on cleaning up air quality in Beijing. The August edition of Wired magazine in the article 'Smog and Mirrors' talks about the hurdles the Chinese government has cleared and those lying before it in preparation for the Olympics. Chinese officials have agreed to pour $12.2 billion into improving environmental conditions in the hopes of gilding China’s image, however progress in greening has been hampered by the strong growth in consumer wealth. More people are driving cars than ever in China, exacerbating the pollution problem. A report entitled Brand China talks a bit about China’s image as perceived by the country and by world.
Among the last ditch solutions, if Beijing can’t bring pollution under control before the Olympics, are pulling cars and trucks off the roads and forced last minute vacations for factory and government workers. The IOC is recommending that some teams prepare in Korea before flying to China for the games. Apparently something similar was done for the Athens Olympics, where air quality is also poor for the athletes.
Japan is tanned, rested ... and back. The American Magazine (July / August 2007) in 'Make Way for Japan' highlights a robust economy, recovered from its 'lost years' of stagnation. While China hogs the headlines, Japan, the world's second largest economy, quietly basks in its longest period of sustained growth since World War II. It has put its infamous 'real estate bubble' behind -- when the Palace grounds in Tokyo were worth more than the entire state of California -- and is moving forward. Toyota just surpassed GM, knocking it out of the top spot for the first time in 76 years. Bank lending is on the rise. Sony, Canon, Honda, Hitachi are corporate world leaders. The challenge? Shrinking demographics; Japan's population fell last year, for the first time in 60 years. Read more in the issue in Jackson Library.
A landmark report on the cost of pollution in China had been substantially cut under pressure from Beijing government ministries. The report found that about 750,000 people die early every year in China because of the filthy air and water.
To calculate levels of air pollution, the biggest killer, the report uses the globally recognised measure – which looks at the concentration of particulates measuring less than or equal to 10 microns per cubic metre of air.
Only 1 per cent of Chinese urban residents live in cities with concentrations of such particulate matter below 40 microgrammes per cubic metre of air. The WHO guideline sets the bar at 20 microgrammes.
In 2003, 58 per cent of Chinese city dwellers were exposed to particulate matter of more than 100 microgrammes, “twice the annual average standard in the US”, the report says.
Story at FT.com.
An article in yesterday's New York Times Magazine talks about the life of some Chinese workers who play World of Warcraft for a living. They work 12 hour shifts, 7 nights a week with two or three days off a month. The workers earn (real) money by collecting the (virtual) gold coin that you can win in the game. For every 100 gold coins he gathers, the workers makes 10 yuan, or about $1.25, earning an effective wage of 30 cents an hour, more or less. The boss (the supervisor) in turn, receives $3 or more when he sells those same coins to an online retailer, who will sell them to the final customer (an American or European player) for as much as $20. It's a very interesting article about a different kind of night job!
Japan is back -- but are its workers? BusinessWeek (May 28) describes the suffering of the so-called "lost" generation, millions of young Japanese working as temps or contract employees for corporations. Despite their education, in Japan's hierarchical culture they are definitely lower on the socioeconomic ladder than their predecessors. There is even a TV drama, Haken no Hinraku (The Dignity of the Agency Worker), describing the plight of a female temp who must endure office humiliation from full-timers, despite her excellent qualifications. During Japan's downturn, many of these workers, fresh out of college, took menial jobs to survive. With the economy bouncing back, companies are turning to new grads to hire, rather than these older workers, who feel left in limbo. The phenomenon has even coined neologisms like 'freeter' = people who flit from one low-paying job to the next.
"What's the most extreme emerging market on earth?" asks the May 28th BusinessWeek. The answer may surpise you: Colombia. The country's stock market has soared since 2001, foreign direct investments have more than doubled, and real estate prices have tripled in many areas. When Americans think of Colombia, images of drug dealers and death squads come to mind, but the new global interest in investment in Colombia is phenomenal. The article highlights some of the young movers-and-shakers in Colombia, such as Fernando Arbelaez, 32, Vice-Minister of Agriculture, Nicolas Santos, 29, major restauranteur, Cristina Plazas, 29, Bogota city council member, and Federico Jimeno, 26, the Government point man for visiting investors. Medellin, once associated with liberation theology denouncing the rich and rampant murder, is now hosting offices for Phillip Morris, Toyota, Renault and many other multinationals. Problems remain, but it's not your father's Colombia any more.
"China is rising, and so is Hu, both abroad and at home: people-in-the-know in Beijing say he may sweep the entire Standing Committee of the Communist Party's Political Bureau clean of rivals." So says Asia Inc (March - April 2007), whose cover story highlights China's economy and the presumed final ascension of Hu Jintao to power sometime later this year as fourth 'emperor' of the modern Communist dynasty. Hu is likely to consolidate his power at the 17th Party Congress this Fall. The article also features cameos of other top power brokers in China, such as Wu Bangguo, National People's Congress Chairman, Huang Ju, Vice-Premier, and Luo Gan, National Security Chief. "Hu Jintao has held his cards close to his chest in the past, but he may begin to show his true self when he fully ascends to the throne" one Beijing analyst speculates. Also in the issue: the potency of venerable Chinese brands, such as Tsingtao Brewery, Kweichou Mao Tai liquor, and Hengshun Vinegar, China's 'Heinz', dating back to 1840. Included is a piece on Chengdu, the large metropolitan city in southwest China, an interview with Zhang Chunjiang, Chairman of China Netcome Group Corporation, and some good blogs to keep up on the latest. China is expected to become the world's largest economy within a matter of years. Read more about key political and business currents in the issue in Jackson Library.
Japan Close-Up magazine (May 2007) targets the Shibuya district of Tokyo, with its cover story, 'Cool Tokyo'. Known for its landmark Shibuya 109 building, its crowds of trendy young Japanese women and girls and its famous statue of Hachiko, the devoted dog who waited at the station for a master who never returned, Shibuya is teeming with energy, edginess and fashion savvy. Another article highlights '@akihabara', about the area of Tokyo called Akiba, birthplace of Japanese anime, manga, video games and a "cool culture" of 'maid cafes', the Comic Market and anime-style robot contests. Interesting factoids mention the possible European origin of Japanese tempura, as well as the fact that it did not snow in Tokyo this winter -- for the first time in 47 years. And for the adventurous among us, a piece on a record-setting monster cuttlefish, 3.5 meters long, captured for the first time on video. Read all this and more in the issue in the Current Periodicals rack at Jackson Library.
The New Global Cinema is the leading topic for the Spring 2007 New Perspectives Quarterly (NPQ) magazine. Appropriately, the table of contents leads off with "Hollywood Must Portray Point of View of Others" with Oscar-nominated film director of Babel Alejandro Gonzalez Inarritu, and "Shock and Awe vs. Hearts and Minds at the Movies" with NPQ editor Nathan Gardels and Phoenix Pictures CEO Mike Medavoy. Take away quote? "Hollywood is a dinosaur that has destroyed and occupied our minds for too long" (Khan Lee, Taiwanese indie film director.) Other pieces in the issue, featuring mostly interviews, include "North Korea Accord is a Model for Iranian Crisis" with former UN weapons inspector Hans Blix, "The Cost of the Last Six Years, From North Korea to Kosovo" with former Secretary of State Madeleine Albright, "China's Satellite Missile Strike Raises Worries About a Pearl Harbor in Space" with former Secretary of Defense William S. Cohen, "Global Outlook: The Poor Will Get Richer" by World Bank economist Francois Bourguignon, "If US Picks a Fight With China, It Will Be 'Very Big Trouble'" with Singaporean Prime Minister Lee Hsien Loong, "The Challenge of Positive Freedom" with historical philosopher Francis Fukuyama, and more. Find the issue in our Current Periodicals racks at Jackson Library.
"If you think the Chinese will never catch up in creative fields like design, architecture, advertising, and fashion, you're kidding yourself." Thus saith Fast Company (June 2007) which features 'The Next Cultural Revolution' by Aric Chen. Chen wants to wake the world to the dynamic creativity bubbling up in China. The piece starts with Jennifer Wen Ma, at 33 the youngest member of the 2008 Olympics Creative Committee who, says Chen, "wants to smoke out your cliched ideas about her country" with the Beijing Olympics. Other up-and-coming stars highlighted include Ou Ning, filmmaker and designer, Lin Jing, furniture and ceramics maker, MAD Design architects Ma Yansong and Qun Dang, and trans-Pacific film icon Ziyi Zhang. As Wen Ma says, "Everyone wants to project a very modern image -- one that will stun the world. ... Everyone, it seems, is ready for a renaissance of creativity." And in a country that by 2020 will have a larger highway system than America, we may not have long to wait.
I came across a book today in the library called "From Wall Street to the Great Wall: how to invest in China" by Jonathan Worrall and Peter O'Shea. It talks about how China is emerging from decades as a controlled economy and the financial markets are also emerging and are poised far great things. If you are in the local area and want to come in to the library and check this book out, the call number is HG5784 .W67 2007.
The 'Bird of Gold': The Rise of India's Consumer Market, a study written by McKinsey, discusses how the Indian consumer will (if India continues on its current high growth path) have incomes that will almost triple over the next two decades, and the country will climb from its position as the twelfth-largest consumer market today to become the world's fifth-largest consumer market by 2025. The study forecasts that aggregate consumption in India will grow fourfold in real terms, from Rs 17 trillion at present to Rs 70 trillion by 2025. Traditionally expenditure on food, beverages and tobacco will see a remarkable drop as a proportion to overall expenditure by 2025. They may remain the single largest category in terms of spend, but their share will drop to 25% from 42%.
So which markets will thrive? Transportation (new cars, airline travel) and healthcare will become the second and third largest consumer markets.
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