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Tag: BCG report

  • Online spender base estimated to grow 2-3x across sectors led by women, new users from smaller cities

    $100bn digital consumer spending potential by 2020: Google, BCG Report

    By A Correspondent

     

    Capturing the growth of digital influence and key consumer insights that will drive the next phase of digital consumer spending in India, Boston Consulting Group (BCG) and Google India released a report, ‘Digital Consumer Spending in India: A $100 Bn Opportunity’. The report projects that the potential for digital spending is expected to grow 2.5 times from ~$40bn to ~$100bn by 2020 led by sectors such as e-commerce ($18-45bn), travel and hotel ($11-20bn), financial services ($12-30bn) and digital media ($200-570mn). The report also finds that women, new users from non-tier 1 cities and 35+ years, shoppers will drive this growth.

     

    The report states that with deeper penetration of mobile phones and affordable data plans, the number of online spenders will not only increase over the next few years but there will be a dramatic change in the users’ profile. It also estimates that by 2020, the women shoppers will increase 2.5x and older shoppers will increase more than 3x compared to today. With the improvement of infrastructure, online shopping will take off in India from cities beyond metros and together it is expected to comprise more than 50 percent of the total online shopper base by 2020.

     

    Speaking about the key findings of the report, Nimisha Jain, Partner & Director, The Boston Consulting Group, India said: “There is a clear evolution as consumers move from awareness of online platforms to their first purchase and further down to become more frequent buyers – triggers and barriers to online purchase evolve with each stage. Very different actions are needed to unlock growth and move consumers from one stage to the next.”
    The report highlights that there are 75-80 per cent internet users who do not spend online currently. This underscores that even though the digital media has gained ground over the last few years, the actual digital spending is still in evolutionary stages in India. The BCG-Google report also outlays the key triggers and barriers at each stage of online consumer evolution with an aim to help drive digital spending. The report draws out implications for companies across each stage, with nuances highlighted to give a category perspective of relevant implications.

     

    Speaking about the key findings of the report, Nitin Bawankule, Industry Director, Google India said: “Digital spending in India are at a cusp of significant wave of change, while we have seen enthusiastic response to adopting newer forms of digital payments in the last few years, the base is still relatively small. The ecosystem needs to focus on creating a very targeted value proposition for different segment of users and across different categories to drive larger adoption. For example, in Food & Grocery category, convenience becomes a key trigger for frequent shoppers while discounts are important for occasional shoppers and quality is a key barrier among offline shoppers.”

     

     

  • Across nearly all industries, use of Big Data and Mobile to drive innovation lags their perceived importance

    BCG report maps journey of innovative companies in India

    By A Correspondent

     

    In the 2014 list of most innovative companies released by the Boston Consulting Group, technology and telecommunications companies once again lead the pack, holding down all of the top 5 spots in 2014, 7 of the top 10, and 21 of the top 50-the most since 2010. The consumer products industry holds 14 of the top 50 spots, also the most since 2010.

     

    BCG has surveyed more than 1,500 senior executives in a wide range of countries and industries since 2004 to help cast light on the state of innovation in global business. In its new report, ‘The Most Innovative Companies 2014: Breaking Through Is Hard to Do’, the firm reveals the 50 companies that international executives ranked as the most innovative. Many of these companies have demonstrated impressive staying power over the years: Apple has been number one every year since 2005; Samsung and Google switched places again at numbers two and three; Microsoft and IBM round out the top five and TCS amongst the Indian companies has entered the list.

     

    The biggest change in the 2014 top 50 list is the decline in the number of auto companies. Only 9 auto companies are in the top 50 in 2014, and only 4 ranked in the top 20. This compares with 3 automakers in the top 10 places in 2013, as well as 9 in the top 20, and 14 in the top 50 spots. Automakers also reported both a 26 percent decline in innovation priority, with 62 percent assigning it a top-three position, down from 84 percent last year.

     

    In 2014, BCG again asked respondents to name up-and-coming companies-companies that are still relatively young or have yet to reach the scale of the top 50 global giants but are making themselves known for innovation. WhatsApp, Square, Rakuten and Wipro lead this list. There was 50 percent turnover on the up-and-coming list, with only four companies returning from 2013. Last year’s up-and-comers all leveraged mobile platforms in one way or another; this year’s list comprises more varied innovators: consumer products, auto, media, and big-data companies.

     

    The 2014 report examines the factors that separate breakthrough innovators from other companies. It found that breakthrough innovators are strong innovators first-they excel at the fundamentals that define successful innovation programs. But they stand out from strong innovators in three ways: they cast a wider net for ideas, they use business model innovation more, and they have cultures geared toward breakthrough success. Almost half of breakthrough innovators reported generating more than 30 percent of sales from innovations over the past three years, more than twice the average for all companies.

     

    Neeraj Aggarwal

    “Innovation isn’t getting any easier. Too many companies want to shoot for the moon while their innovation programs are barely airborne,” said Neeraj Aggarwal, a BCG Senior Partner & Director. “It is no longer enough to be good at incremental innovation. Breakthrough innovators are especially effective at bringing together the pieces required for radical innovation such as management, governance, and organizational design that can have a major impact on any company’s innovation program. Breakthrough innovators corral them all.”

     

    The 2014 survey found that only 13 percent of respondents have a significant ambition to deliver radical innovation. More than 40 percent of these would-be disruptors indicated that their companies’ innovation capabilities are average at best. Executives from companies with strong innovation capabilities-and disruptive ambitions-represent just 7.6 percent of the sample.

     

    While technology companies lead the list of those seen as most innovative, respondents in multiple sectors said that there will be limited impact from digital technologies in their own industries in the next three to five years. Less than half of the respondents in the telecommunications, financial services, pharmaceuticals, consumer products, retail, energy, and manufacturing sectors, among others, said that big data and mobile will have a big impact. Less than a third in each sector said that their companies are targeting big data and mobile in the innovation programs.