“Demographics, Reforms, Globalisation” can make “India a $5-trillion Economy” by 2025 |by: Chetan Ahya | The Economic Times

( The writer is chief Asia economist and MD, Morgan Stanley, Hong Kong)…!!

Propelled by the THREE ” Success Factors “ of favourable Demographics, Globalisation and Productivity-Boosting Reforms…India’s Trend #GrowthRates, have been rising since the 1980s…

Over the last decade, India’s GDP growth has averaged 7.6%, compared with 6.1% in ’90s and 4.6% in ’80s…!!

However, this structural uptrend had been Disrupted since the credit crisis in 2008…An adverse #GlobalEnvironment and, more importantly, poor #MacroPolicy-choices of pursuing #HighFiscalDeficit, strong Rural-wage growth and Policy inaction adversely affecting #InvestmentSentiment, have led to slower-growth and #HigherInflation…!!

Over the last 12-18 months, #PolicyMakers have ” recognised the adverse impact of past policies and begun to take corrective actions”..

The effects of adjustments in the real effective exchange rate and real interest rates, and steps to improve the business environment alongside the improvement in the external environment, are beginning to show in improving macro stability indicators..

Indeed, we expect India to transition out of the current stagflation environment over the next eight quarters, with GDP growth accelerating from 4.6% in Q1, 2014, to 6.8% in Q1, 2016, and CPI inflation to head towards RBI’s comfort zone of 6%…!!

#CyclicalChallenges will give way to more structural ones… Over the next decade, the interplay of #Demographics (strong growth in the working-age population), #Reforms (that can help improve productivity) and #Globalisation (accelerating productive job opportunities, income and saving) will support India’s #GrowthTrend…

Improvement in demographics — as measured by the decline in Age-dependency — has been a major source of higher potential growth… #FavourableDemographics, provide a platform of surplus labour that the economy could mobilise…!!

Labour Gains:

Throughout the region, there has been a #VirtuousCycle of falling Age-dependencies, Improving-savings and Investment, and Long phases of Strong #GDPGrowth….Indeed, India will continue to benefit from declining age dependency and increasing labour supply till 2040…

The quality mix of the fresh additions to the workforce is also likely to improve dramatically with rising literacy levels and focus on skill development, providing uplift to potential growth. Globalisation supplies two growth enablers: external demand and financing…

A growing #SkilledLabourPool and steady #LiberalisationPolicy have helped India harness the benefits of globalisation…India’s integration with the global economy started in the early 1990s, but accelerated meaningfully only in the 2000’s…

While the last few years have seen a bit of disruption in the #GlobalisationTrend, the improving global growth environment should support India’s integration. As the government takes more steps to improve the business environment, removes #SupplysideConstraints and maintains external competitiveness by #TacklingInflation, India’s integration with the global economy will deepen. This will be supportive of the medium-term growth trend…

The demographic and globalisation-linked merits are well understood and are, to some extent, a given in the context of today’s India. However, the key driver that will push higher sustainable growth is the implementation of productivity-boosting reforms…#EconomicReforms — when undertaken — incentivise the corporate-sector to invest, in turn utilising the surplus labour and unleashing faster productivity growth…!!

Clear Mandate for Change :

The recent election outcome has given the present government a clear mandate and boosted its ability to implement productivity-boosting reforms at a fast pace. The government would must focus on improving the business environment to kick-start the #InvestmentCycle, contain the less effective re-distributive #FiscalPolicies and improve #Infrastructure…

Moreover, the #RisingMiddleClass and Young, Literate and Well-connected population will demand greater Accountability of policymakers to deliver on reforms that revive the virtuous dynamic of productive jobs income growth-savings-investment..

Hi-Five for India :

We expect a steady  pace of implementation of policy reforms, which will lay the foundations for India’s real GDP growth to move higher to an average of 6.75% over the next 10 years….If our projections were to come to fruition, India’s economy would pass the $5-trillion mark by 2025, a feat that has been achieved by only the US and China thus far, and would lift India to be the fifth-largest economy (from 10th currently)….!!

There are hurdles to achieving the near-7 % growth rate, but the confluence of positive #StructuralFactors should yield strong #EconomicPerformance ,over the next 10 years…

That this structural story is playing out in a region where many other countries are experiencing headwinds to their potential growth imposed by declines in their working-age population and debt-deleveraging dynamics makes the case for India all that more compelling….!!

 

“Legislative issues, Lack of Quality Retail space are impediments”, to spread of Organised Retail in India | CBRE

“High Rentals  and “poor Mall-Management” are deterrents to Entry & Expansion of #InternationalRetailers in the country”, says a study by the real estate services firm..!!

Almost 60% of global retailers have a presence in India, but legislative issues and lack of quality space continue to impede the growth of organised retail in the country, CBRE Research has said in a study titled ‘Expanding Horizons of Global Retailers in India’.

The multinational #RealEstateServices firm analysed more than 300 prominent global retailers in the study to identify Operating-trends, #ExpansionStrategies and extent of #MarketPenetration across Leading cities in the country..

The firm undertook this project in an effort to map and analyse the spread of international retailers in India, where the expansion of global retailers has been a major driver of real estate demand..The study analysed Brands across Luxury, Premium & High-end Categories, and judged their presence in the country on the basis of #StandaloneStores within Malls as well as Traditional Marketplaces / #HighStreets…

Although India has emerged as a prominent destination for #RetailSegments, such as Food and Beverages (F&B), #FashionApparel and BigBox / #HypermarketChains, almost FOUR out of TEN #GlobalRetailers, are yet to set up shop in the country…the study found..

Nearly 80% of the retailers that have entered India are present in New Delhi while the figure is 70% for Mumbai and nearly 50% for Bangalore. This signifies the significance of the metropolitan cities as the preferred entry points for international retail chains..

The retailers chose tier II cities such as Pune, Hyderabad, Kolkata, Ahmedabad, Chandigarh and Jaipur next, the study shows….” India is still a largely untapped and #unorganisedRetail Market as a large number of prominent #GlobalRetailers are yet to commence operations here…The country holds a considerable advantage over other #EmergingRetailDestinations due to its strong Domestic-consumption and Low-rate of #MarketPenetration by #InternationalRetailers…

India’s new middle class is increasingly becoming brand conscious and willing to spend on quality goods, a trend which is creating numerous business opportunities for mid-range international brands. With political and economic sentiments already showing signs of improvement, we believe this is the right time for international retailers to look at India for expansion into the region,” said chairman and managing director of CBRE, South Asia..

American brands account for the bulk of retailers covered in the CBRE study, comprising 30% of the total…Most US retailers are present in the mass market F&B category while retailers from Italy and the UK account for about 19% and 16%, respectively, and are largely concentrated in the luxury segment..

The study also points to the lack of Quality #RetailRealEstate supply, coupled with prohibitive-legislation that has acted as an impediment to the spread of organised retail in India..

Compounding the problem of limited investment-grade supply of #RetailSpace are high-rentals and lack of professional #Mall-management, all of which make for a challenging operating environment for Global Retailers, the study says…!!

“Department of Industrial Policy & Promotion (DIPP)” for “simplification of Land Acquisition Act”, in India | ET Retail

The Department of Industrial Policy and Promotion (#DIPP) will pitch for simplification of the #LandAcquisitionAct to facilitate investment and manufacturing in the economy by doing away with the cumbersome rules and procedures in the legislation..

Commerce and industry minister Nirmala Sitharaman, will likely take the matter up with her rural development counterpart Gopinath Munde…DIPP will likely propose ” doing away with the social impact assessment process in the Act, which is a pre-requisite for public-private partnership (PPP) and private entities to acquire land”.

” Land Act in the present form has stalled industrial activity and suitable amendments are urgently needed to spur manufacturing in the economy…. There is no land acquisition taking place. We have taken up the matter with the minister,” said an official…

 

 

Act stipulates establishment of a state social impact assessment unit, the office of a commissioner, rehabilitation and resettlement, and a state-level monitoring committee by each state government. The Act has nearly brought acquiring land to a halt, impacting large projects hitting manufacturing growth, which contracted by 0.7% in 2013-14.

Besides, the commerce and industry ministry may also recommend empowering of district collectors of each state to authorise providing of up to 500 acres for small-scale industrial projects. Investment and infrastructure reforms are one of the 10 point agenda of Prime Minister Narendra Modi unveiled on Thursday… Rural development minister Gopinath Munde ruled out scrapping of the land acquisition act, however, called for a need to amend it….

Ms. Sitharaman has emphasised on bolstering manufacturing in the economy. Munde was recently reported as saying that the rules of the Act have made the implementation difficult. “There is no question of repealing the Act, as we supported it in Parliament; it is a good law. I have taken up the Act as my first issue with officials in this ministry… I must say I agree with the rates of compensation in the Act,” he said.

Any amendment the Act will need to go through the Parliament. The Act has made it mandatory to get the consent of at least 70% of the affected people for acquiring land for PPP projects and 80% for acquiring land for private companies.

DIPP secretary Amitabh Kant had said in his interview to ET last month that the law had to be redrafted and simplified keeping in mind that a fair price is paid to the farmer.

“We need to un-shackle controls. It provides for too many committees and too many approvals. It will be too time-consuming a process,” he had said..

The ” New Law provides compensation FOUR Times the Market-price for Rural-Land and up-to TWICE the value of Urban-land for acquiring for public works or industrial activities”…!!

“E-commerce Logistics firm “Delhivery” to raise up to Rs.175 crore”: “PE’s interest in Ancillary Service providers” | ET Retail

E-commerce Logistics services company ” Delhivery “ is in the final stages of negotiations to raise up to Rs 175 crore in fresh funding, a development that comes at a time when a number of India’s Top Private Equity funds are betting big on the country’s Digital-commerce sector….!!

The company has had discussions with a number of blue-chip private-equity firms, a list that also includes marquee growth-stage risk capital investor Warburg Pincus, and a deal is expected to be finalised by mid-June, according to sources with direct knowledge of the talks…

If successful, this will be Delhivery’s third round of equity funding….In September last year, it raised about Rs 35 crore from Nexus Venture Partners, having raised an undisclosed sum from Times Internet Ltd earlier in 2012….The existing venture capital backers are also expected to participate in the new round…

Warburg Pincus recently made the news when it led a Rs 550 crore round of funding in online and mobile classifieds company Quikr in March. Avendus Capital, a leading investment bank, has been given the mandate to structure the transaction. While Sahil Barua, co-founder of Delhivery, and Warburg Pincus refused to comment, emails sent to Avendus Capital did not elicit any response…!!

A potential transaction could value Delhivery at over Rs 500 crore. A number of India’s top private equity firms with a consumer #BusinessFocus but are yet to invest in E-commerce have highlighted their interest in investing in companies that provide services such as Payments, Logistics, #Reverse-Logistics, #Packaging and #SupplyChainManagement…

“We don’t have a preference for businesses that focus on core merchandising…We would rather look at Logistics and Payment-related businesses, which go right across the space,” said managing partner, Tata Capital Growth Fund (TCGF)…!!

The shift is largely driven by the relatively lower valuations and smaller amounts of capital required by #AncillaryServiceProviders, with average deal sizes of Rs 50 crore to Rs 150 crore…!!

“We will consider investments in E-commerce. We haven’t so far, because a number of those businesses are yet to mature to a point where we, as a late stage investor, are comfortable investing in them…

BillDesk, where we have invested, is a classic example of a company that has been a direct beneficiary of what’s happening in the broader consumer internet space,” said.. India head of global private equity firm TA Associates…!!

“Time to Re-engage with Emerging Markets”, “Not Retreat from”| BCG

These are challenging times for Emerging Markets… China’s economy is expanding at the slowest pace in more than a decade, and Annual-Growth in once-booming nations like Brazil, Mexico, Russia, and South Africa has slowed to about 1.5 to 2.5 percent…While India, has fared well in-comparison to its peer BRICS nations…but is well-below its own Y-o-Y GDP no’s, since 2008…

Look around the developing world, and currencies are weakening, worries about asset bubbles and rising debt are mounting, and foreign direct investment has fallen sharply. This volatility leaves many companies wondering if they are over-exposed to the #RisksOfEmergingMarkets..

The challenges in emerging markets go beyond volatility. Fundamental, longer-term changes are transforming the competitive landscape. In most emerging markets, domestic companies with low-cost structures and intimate knowledge of local consumers are more aggressive and are quickly improving their operations… Competition for increasingly scarce talent is fiercer and is driving up labor costs. Such trends are hurting profits. In China, for example, the share of U.S. companies reporting that their operating margins were higher than the global average dropped from about 50 % to just over 30 % between 2010 and 2013, according to the American Chamber of Commerce in Shanghai..

Still its Where the Action Is :

But companies that plan to look for the exits or scale back in emerging markets should reconsider. The most fundamental trends remain promising. One is that emerging markets will remain an unmatched source of growth in most industries. Another is that hundreds of millions of households will continue to join the ranks of the middle class and affluent in the decade ahead..

Despite the discouraging headlines, Emerging Markets are more important today than ever before. Even with all the turbulence in 2013, these economies accounted for 68 percent of global growth… Although the overall pace has slowed, Oxford Economics projects that GDPs of emerging markets will grow 2.2 percentage points faster than those of developed economies over the next four years. Just in terms of infrastructure, demand for investment in emerging markets will total a stunning $25 trillion through 2025, according to some estimates.

The ” BiggestDriverOfGrowth will be Rising Incomes… The Boston Consulting Group projects that in Turkey, an additional 6 million households will enter the middle and affluent classes in the next five years. In Indonesia, we project that 68 million people—roughly equivalent to the entire population of the UK—will make a similar leap by 2020. Thirty-seven percent of Brazil’s 60 million households will belong to the middle and affluent classes by 2020, compared with 29 percent now, and will represent a $1.2 trillion market. In China and India, such households will represent $10 trillion in buying power. Companies will have to look beyond a country’s GDP and focus instead on the more significant factors that will generate growth: rising consumption by relevant segments of consumer markets, and signals that purchasing power is about to take off.

To win in emerging markets, executives will need to rethink their approaches. As many of these economies make the transition from super-high growth, tapping major new sources of revenue will become harder than in the past. Executives should adopt a more differentiated approach to emerging markets and market segments…Companies should build new capabilities, adjust their business models, and improve their execution..

We believe that the following are the Primary #CorporateChallenges :

Refining the Emerging-Market Footprint – Growth prospects, consumer behavior, and the local competitive environment differ widely from one emerging market to another, as well as among industries. Each company must define the most promising emerging-market priorities, taking into consideration its own unique context and starting point…!!

We offer ” TWO Specific Ideas” for how executives should Re-visit their Market Portfolios : First, they should think beyond the popular acronyms. In the past few years, attention has been focused on the so-called BRIC economies—Brazil, Russia, India, and China. More recently, there has been more talk about MINT (Mexico, Indonesia, Nigeria, and Turkey). Of course, no company with global aspirations can ignore China and India. But companies should also build positions in markets that may offer better opportunities in the short term. While many multinational companies still target Indonesia, for example, material opportunities are also opening in adjacent Southeast Asian economies such as Vietnam, a recharged Philippines, and the frontier market Myanmar. Africa is also drawing greater attention from multinationals. Hyundai, for example, has surpassed Toyota in the five African countries that account for 70 percent of new-auto sales: Algeria, Angola, Egypt, Morocco, and South Africa. Samsung, also of South Korea, has set two goals for 2015 : achieving $10 billion in African sales and training 10,000 African engineers and technicians in order to develop the capabilities it needs to succeed.

Second, executives should simplify their strategies in order to expand and compete. Rather than always approaching each country individually, for example, they should think in terms of clusters. The sheer challenge of understanding and winning in more than 100 emerging markets can be so intimidating that most executives dare not try. So they should develop strategies to address promising segments across a number of neighboring countries or consider regional sourcing strategies in order to achieve critical mass. In Southeast Asia, for example, one major automobile company is taking advantage of the region’s free-trade pact to manufacture diesel engines and steering columns in Thailand, transmissions in the Philippines, gasoline engines and parts in Indonesia, and engine control units and steering gears in Malaysia.

Winning Over More Demanding Consumers – Emerging-market consumers expect more from foreign brands than they used to. Even average consumers in the lower rungs of the middle class are quality conscious. They can no longer be consistently won over by Western or Japanese products whose features and functions have been stripped down in order to hit a certain price point.

One reason for this development is that the quality gap between foreign and domestic products is closing fast. China’s Haier, for example, has emerged as the world’s largest appliance maker, in part because of its obsession with quality, according to a recent article in the Economist. Haier began by establishing a reputation for high-quality products and service in China. When it expanded overseas, Haier first pushed into the U.S. and Europe—rather than into less competitive markets such as Southeast Asia and Africa—because it wanted to learn how to meet the demands of the world’s most sophisticated consumers. As a result, Haier’s revenues have increased fourfold since 2000, topping $26 billion in 2013.

Multi-nationals must also move beyond selling off-the-shelf products and services that are aimed at the top of the income pyramid in emerging markets. Yum! Brands’ famous success story in China, where it has averaged annual growth of about 30 percent, is based on a strategy of customizing its restaurant concepts to local tastes, from restaurant design to food choices.

Adapting to the Big Competitive Squeeze – A decade ago, many multinationals regarded their global peers as their main competitors. This orientation has fundamentally changed. Foreign companies in emerging markets are being squeezed by different kinds of players.

One major source of competition is what BCG refers to as “global challengers”—fast-growing, globally minded companies with roots in emerging markets that are on track to establish leadership positions and to fundamentally alter their industries. In fact, 124 of the global Fortune 500 companies for 2013 were headquartered in emerging markets—more than double the number in Fortune’s 2008 list. In a recent BCG survey of more than 150 multinational executives, 40 percent of the respondents said they regarded other multinationals from developed economies as their primary competitive threats in emerging markets. But a greater proportion—50 percent—saw multinationals based in emerging markets as their main threats.

A second major challenge comes from companies that we call “Local Dynamos”: smaller emerging-market companies that focus only on their domestic markets. Such companies are catching up in terms of performance and distribution. They also have developed an intimate understanding of local consumers and strong relationships with local governments. In Brazil, where Wal-Mart Stores and Carrefour are both investing aggressively, the regional supermarket chain Super Muffato is the market leader in interior cities in the country’s south and in cities with more than 300,000 residents in the state of Paraná. Its 40 stores are just as profitable as stores in bigger cities owned by major international chains. For such reasons, 78 % of the multinational executives in our survey said they regard domestically focused companies as principal threats in emerging markets. In other words, these local companies are viewed as more serious rivals than other multinationals or new global challengers.

Meeting the Higher Expectations of Local Partnerships – Multi-billion-dollar #CrossBorderMergers&Acquisitions in #EmergingMarkets, tend to grab headlines.

But the real payoff on the ground for foreign companies is less than satisfying and often is not far-reaching. Organic growth, however, is challenging. To succeed, companies will have to up their game both in M&A and in forming local partnerships. While the rationale for and approach to a partnership agenda must be thought through in detail and tailored to each company’s own context, the emerging-market landscape is already witnessing different approaches to partnering.

One challenge for executives is to address the higher expectations of local partners. Emerging-market joint ventures in many sectors were traditionally based on a simple pact: foreign companies provide access to technology, capital, and sophisticated management solutions while domestic partners provide market access, government relationships, and, in many cases, low-cost production.

But this relationship has become obsolete. Today, partnerships between foreign and emerging-market companies are on a more equal footing. Local partners may inject capital or contribute valuable technology. They may even insist on a global partnership. When a Japanese provider of hospital equipment recently approached three preferred local-partner candidates for the India market, each company requested not only to help build up the local business but also to be the partner for expansion into other overseas markets. Indian motorized-vehicle manufacturer Bajaj Auto formed an alliance with Japan’s Kawasaki to obtain technology support for new-product development and to address a wider range of markets at home and abroad.

Organizing for #GlobalSuccess :

If a company views emerging markets as important to its success, this must be reflected in its organization structure. We see four imperatives regarding organization in these markets..

A Seat at the Table – One critical element is the way in which the corporate center supports its overseas units. Frequently, companies marginalize their organizations in emerging markets, all but guaranteeing that they will underachieve. They do not have a proper seat at the table of decision making, corporate strategy, and product development and have insufficient access to capital and people. If these markets are to deliver a larger share of growth, they deserve a disproportionate share of attention and support. At the home-product and beauty-care-product direct-sales company Tupperware Brands, which generates more than half of its annual sales in emerging markets, CEO Rick Goings is on the road 70 percent of the time, much of it in developing nations. Members of Siemens’s board learn about important emerging markets by spending two days in a region meeting with customers, government officials, and other key stakeholders.

An Accelerator Mindset & Organization – Multinational companies must adapt their organizations so that they can better cope with the tremendous speed with which many emerging markets are developing. Fast decision-making and consistent execution are paramount to compete with what we call the “accelerator mindset” of many emerging-market companies, such as their relentless pursuit of growth. Copying organization and governance structures that are successful in home markets may put multinationals at an unnecessary disadvantage against their local peers.

True Market Immersion – The most important imperative relates to leadership and people. Upper management must be familiar with emerging markets, ideally through on-the-ground experience. Senior executives must also remain sufficiently exposed to key customers, distributors, partners, and government officials in these markets. Too often, a foreign company’s senior executives experience only new airports and five-star hotels, rather than the realities of living on the ground.

Talent as a Competitive Advantage – Typically, foreign companies are at a competitive dis-advantage when it comes to recruiting top local talent. Talent is increasingly scarce, and attrition is high. Two out of three Indonesians change their employer within the first three years, for example, and one out of three does so more than once. The annual attrition rate in India is close to 15 % .

This high turnover suggests that executives must re-double their efforts to attract, develop, and retain local talent…They should also work harder to build organizations for the long run in emerging markets. When filling management positions, they must move away from the traditional practice of “ Expatriate Stints”, in which a Manager from Headquarters is assigned to an Emerging Market for about THREE years… Instead, executives must invest in future local leaders…

They should expose top Emerging-Market Talent to Global Activities and get them excited about their future growth potential in a company where individuals can thrive independent of their nationality… Wherever possible, leaders should instill in their companies a global mindset, in which a diversity of backgrounds is understood to contribute to international success.

#SuccessInEmergingMarkets, has become “more challenging than it was in the past”… But there is “still plenty of opportunity for growth”—most likely more than Developed Economies can offer. Rather than #RetreatingFrom EmergingMarkets, it’s “time for Executives to Re-tool & Re-position their businesses for #SustainedSuccess….!!

The “Next #SmartPhoneWar” is going to be “Cheap” not “Nasty” | ET Retail

In 2009, a battle line was drawn. One that would create “deep” divides in the #SmartPhoneWorld, even within brands themselves, and will have a significant impact on the next phone you’ll buy….!!

What happened back then ? #Smartphones got good. Processing power reached the point where you didn’t have to choose between spending a year’s salary and having a decent experience browsing the web on the go, opening up the tech to a wider range of users.

As you’d expect over the years, that performance has been built upon to give us octa-core handsets with more RAM than a over-zealous farmer, putting truly phenomenal power in our pockets.

But that line, the one that showed a baseline of  “‘#acceptable-smartphone-performance” has translated into phones that cost hardly anything to produce and could lead to the biggest change in the smartphone market to date.

And it’s not just the lesser-known brands that are championing this cause either: with the launch of the Moto E, Motorola has proved that the bigger brands have realised the true value in making a smartphone that’s within financial reach of as many as possible…

#Samsung has a similar view : while the company is pushing hard to convince the world that its flagship #Galaxy S5 is the phone most should own, the company is looking to launch its #Tizen handsets into more developing nations like Russia and India.

The Reason for the Shift is Simple : the high end smartphone market is stagnating, with smartphone shipments actually starting to decline in countries like Japan (according to researcher IDC) as saturation levels kick in, users embedded in two year contracts who understandably don’t need to buy another handsets.

So connecting the next-wave of smartphone users has become crucial if sales are to continue – and the best way to do this is to entice users on price…..!!

This is already happening, with the #AveragePriceofaSmartPhone, practically halving from $450 in 2012 to $260 by 2018 – which means the profit margins of the big brands are going to get hit hard.

The only way to keep high revenues afloat is to increase the number of handsets sold, and that means attracting more and more users the smartphone pie…

What is a “cheap” Smartphone ?

There are TWO strands to the “cheap smartphone” sector that will have a big impact on the success of brands like Samsung, HTC and Apple in the years to come…The first is the reasonably-priced smartphone for the developed nations with high smartphone penetration, something that offers a similar experience to the likes of the iPhone 5S or Galaxy S5, but without the hefty cost.

That’s where companies like Motorola & Nokia are targeting, and it appears to be working : Moto went from almost no presence in the UK to taking nearly 6 % of the market according to Kantar World Panel with the Moto G, which offered impressive performance for a Fith-of-the-cost of a top-end Android handset.

Nokia’s Lumia 520 managed a similar feat world-wide, proving popular in both Western and developing nations to become the #Top-SellingWindowsPhoneOnTheMarket, and doing so at a price around 25% of the cost of a flagship-phone..

This section of the market is going to get quickly filled with brands from Asia muscling in, able to offer low cost, high quality handsets thanks to a focus on specs over headline features.

“Motorola was nowhere in Europe before the Moto G launched in November last year, but the new model has since boosted the manufacturer to 6% of British sales,” said Dominic Sunnebo, strategic insight director at analysts #KantarWorldpanelComTech.

“It highlights the speed at which a quality budget phone can disrupt a market. The same pattern can be seen in France with “Wiko”, which has 8.3 % share, and “Xiaomi” in China with 18.5  % “…!!

1. China calling – One of the leaders here is “OnePlus”, a Chinese brand that’s brought out the OnePlus One, a phone with the spec list of the Samsung Galaxy S5, but dropped features like a super-bright AMOLED screen, heart rate monitor and waterproof casing to offer the One, a phone that costs half the price…

OnePlus isn’t alone : China has multiple brands selling millions of devices in their home territory who are able to use these economies of scale to churn out decent phones internationally – this move has started, and is only going to continue…

These phones are still north of 200 / $350, which is a yearly salary to some people in developing nations. But this market features billions of users who don’t just want a smartphone ; the technology and connectivity it provides can open up new ways to conduct business, enabling rapid shifts in economy that simply weren’t possible before…

” The#MotoE may prove useful for first-time smartphone buyers in Europe and some parts of the Middle East, but it won’t make a difference to first-time smartphone buyers in other developing markets such as Africa,” said Amr Shady, CEO of Middle East and African telecom provider…!!

“Motorola needs to knock another 80 off the price tag before it can even begin to be attractive to most Africans…The belief that the ” budget ” offering will continue the momentum that the #MotoG hand-set built in developing markets when it was launched last year will not be realised on this continent for some time “…!!

2. ” Retro” is in – And this is where the effort of five years ago come into play, as that same level of processor is being used to create a phone that could cost as little as $25 / 15….Mozilla’s Firefox OS was announced in 2013, designed specifically to target this next wave of smartphone users. The idea was to offer low-cost handsets, low on specs but with acceptable functionality, in partnership with networks world-wide.

Instead of resource intensive apps, HTML5 would be used to access to the same services on the web, enabling simple tools which perform vital services.

The project seems to be bearing fruit, as there are a number of handsets on the market from #Low-costPhoneManufacturer’s, ZTE, Alcatel and Huawei, with the likes of Sony and LG promising to deliver phones in the future..

According to analysts Ovum, “there have been 425,000 unique visitors to the Firefox OS Marketplace since July 2013” which is a strong uptake for a platform that’s only been going for a year, highlighting the growing need for devices in this category.

While these phones still retail for around $80, a deal between Mozilla and Chinese processor manufacturer Spreadtrum to enable 75% cheaper-phones by creating a reference design for a chip to use in all Firefox OS-powered handsets…

This will enable faster and cheaper production of phones, and will increase the ability to bring smartphones to developing nations dramatically…

3. What does this mean for me ? – Well, if you’re someone who likes to use #High-endSmartphones, the good news is you’ll probably be paying less in the short term or getting a better device…

The Galaxy S5 was cheaper on average than its predecessor in a bid to maintain attractiveness, where other brands are extolling the virtues of more technologically advanced features to keep those wth more disposable cash interested in buying phones that command a better profit margin.

Apple, the most notorious brand for high margins, has already been forced to clip these slightly in bringing out the iPhone 5C, and there’s every indication that the iPhone 6 will have a larger screen and all-new design – and enabling this tech will either eat into the company’s profits or force an even higher premium on one of the most expensive phones on the market…

And it’s not just Apple that’s reacting – HTC has been pushing hard at making attractive, but expensive, casings for its One range and LG is set to bring a QHD screen on the G3 in a bid to convince consumers that the latest tech is still worth paying for..

The rise of the #Mid-RangePhone will directly impact the price and performance of 2015’s flagship-models, forcing brands to compete with the likes of OnePlus on cost or offer genuinely attractive features that warrant the extra pressure on this pocket…

The next Half-decade will see more of a push into both “cheap and ultra-cheap smartphones” to enable more users to join the #smartphone-revolution – as the battle for your “pocket space” intensifies, ultimately, it’s the consumer who’s going to win…!!

How will Narendra Modi ” Transform Indian Economy ” & the “FIVE Leadership Challenges” for him | The Economic Times

To All my Friends, Thought-Leaders & Acquaintances, from the Indian & Global Investment and Business community.. Would request your participation in addressing the following set of questions :

For the First – time since 1984, the people of India across spectrum (north-south & east-west) have vested their trust in Narendra Modi as their next PM, to bring-about the ” Change “ in the country’s well-being (economic & social)..!!

The stock-markets are Euphoric & Indian currency (INR) is gaining every day against the USD & other global currencies…which most of the Equity & Capital market Experts / Participants/Observers & Business-Leaders believe.. this is beginning of a long multi-year Bull-Market…and are Upbeat & Overweight on India, for Investment opportunities into India,as against other EMs (be it BRICS or MINT nations) …as endorsed by our very own Indian version of Warren Buffet…Rakesh Jhunjhunwala….whats your reading on this ??

Question is,will he stand-up to this aspirational quest, the people of India are looking-forward to ??  How the new PM (Prime Minister) can transform the Indian Economy in Next 100 days to 6 months , that was low on Growth-sentiments ??  What are the low-hanging fruits/areas, that he could pursue/capitalise upon, as of immediate to display his commitment, while accelerating & instill, confidence in the people’s choice and mandate handed-over to the new-government ??

How do you all, see things stacking-up ?? Please Share your views/comments…appreciate your participation & time..!!

The five leadership challenges for Narendra Modi:Spend Inc:Shubham Mukherjee’s blog-The Economic Times.