The rising footprint of traditional media offers new opportunities for mass brands to increase penetration. The strength of digital media will be its ability to sell more targeted brands to sophisticated consumers. The imminent mass adoption of smartphones promises to revolutionise brand communication.
India is one of the hotspots of global advertising growth, alongside Indonesia and the Philippines, combining large scale and double-digit growth rates. Now that Brazil and Russia are in recession and China is slowing down, India is the one remaining stand-out growth market of the BRICs.
Over the last two years, increased public spending has stimulated higher economic growth, and the fall in oil prices has helped the fiscal deficit remain under control despite this extra spending. This has also given private corporations time to deleverage, and arm themselves for next round of spending in the Indian economy. However, the balance sheets of public sector banks remain weak and will hamper lending.
The long-delayed GST Constitution bill was passed by Parliament in August, marking a historic step for tax reform in the country. Prime Minister Narendra Modi said GST was “crucial” for ending “tax terrorism” as well as reducing corruption. If implemented in 2017, a single rate of GST will replace various taxes to ensure seamless transfer of goods and services. This will pave the way for balanced and inclusive economic growth. The last quarter also saw the elections in four states – Assam, West Bengal, Kerala and Tamil Nadu – with favourable results for the BJP-led government at the centre, which managed to come to power in Assam for the first time.
The seventh pay commission awarded a 23.5% hike in the salaries and pensions of more than 4.7 million central government employees and 5.3 million pensioners, leading to higher aggregate demand in the economy.
E-commerce is in a pause-and-consolidate phase in India. Leading fashion portal Jabong was acquired by Flipkart-owned Myntra as players seek to consolidate and establish supremacy. In terms of gross merchandize value, local players Flipkart and Snapdeal have declined whereas Amazon has registered phenomenal growth. In yet another industry – the taxi aggregator services – the Didi-Uber deal in China will have implications for the business in India.
Phase III of radio is being implemented and this has led to new stations being launched across the country. This has propelled some growth of advertising on radio.
Phase III of digitisation of television is also complete, and has led to increased viewing of HD channels as well as among the traditional free-to-air channels. Broadcast houses are launching free-to-air movie channels.
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