Market Research Report: Courier Market in India 2012
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Transcript of Market Research Report: Courier Market in India 2012
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Courier Market – India
November 2012
2
SAMPLE
COURIER MARKET IN INDIA 2012.PPT
Executive Summary
Market
Drivers & Challenges
Role of Government
Competition
Global Trade Boom
Growth in e‐Commerce
Financial Institutions Dependence on Courier
Growing Business of Private Telecom Sector
Seasonal Business Upsurge Due to Occasions
The courier/ express courier market is highly fragmented with numerous small unorganized players
The market was valued at INR X1 bn in 2011 and is expected to reach ~INR X5 bn in FY 2016 exhibiting a CAGR of X% between 20‐‐ to 20‐‐
Players
Public Players Player 1, Player 2, Player 3
Private PlayersPlayer 4, Player 5, Player 6, Player 7, Player 8, Player 9, Player 10, Player 11, Player 12, Player 13, Player 14, Player 15, Player 16
Poor Infrastructure is a major decelerator
Poor Warehousing Facility is a Major Deterrent
Delay in Clearances
Ensuring Competitiveness
Infrastructure Development
Foreign Direct Investment
India Post Office Amendment Bill
Laws
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COURIER MARKET IN INDIA 2012.PPT
• Introduction•Market Overview•Courier Service Segmentation•Distribution Channel• Service Network Types• Franchisee Model• Key Issues •Drivers & Challenges• Technology Adoption• Role of Government• Role of EICI• Competition• Transactions• Strategic Recommendations•Appendix
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COURIER MARKET IN INDIA 2012.PPT
Logistics primarily deals in transportation and storage operations and is significantly aided by value added service
The logistics sector comprises primarily of 3 major segments – Transportation, Storage and Value‐added services.The growing Indian economy is playing an advantageous role on players operating in storage and value‐ added
services segments
TRANSPORTATION
Container Rail Transport
STORAGE
Road Transport
Express Logistics
Coastal Shipping
Air Cargo
Project Logistics
Warehousing
Logistics Park
Inland Container Depot
Container Freight Station
Port
Freight Forwarding
3PL/ 4PL
Courier Service
LOGISTICS SECTOR
VALUE ADDED SERVICE
Focus of the Report
Cold Chain
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Growing business opportunities in India is driving the need for time bound service
Market Overview Market Size and Growth •The courier/ express courier market is highly fragmented with numerous small unorganized players
• The market was valued at INR X1 bn in 20‐‐ and is expected to reach ~INR X2 bn in FY 20‐‐
•The market is projecting a CAGR of X% and is expected to maintain a steady growth rate till FY 20‐‐
• India having over a lakh of pin codes, only approximately 10,000 are connected by courier service• It thus makes the lesser known players very significant in the market as they take upon the responsibility of providing last mile service to large organized players
COURIER MARKET IN INDIA 2012.PPT
Express/ Courier Categories in India
Government Administered
India Post
Global Integrators Player A, Player B, Player C etc.Global Integrators
Player D, Player E, Player F etc.Large Indian Companies
Other Small Courier Companies
Regional Players
0
100
200
300
400
INR bn
20‐‐e
X3
20‐‐
X%
20‐‐e
X6
20‐‐e
X5
20‐‐e
X4
X2
20‐‐
X1
C%
B% A%
CBA
Revenue Split of Courier Sector – 20‐‐
6
Courier Service Segmentation (1/2)
Courier Service
by
Type
On‐ Board Courier
• Most expensive and in depth service giving courier delivery the approach of ‘Just In Time’
• Specific for items of extreme importance and international transport
• Items maybe medical cargo like organs needed for transplantation, critical parts and tools or sensitive business or legal information
Personal Courier
• This courier service is common in big cities or over relatively short distances
• Items transported may include super sensitive and delicate articles to office files and documents
• This type of courier service is common in large companies that has complex mail systems and needs to ensure safe and timely package delivery
Same Day Courier Service• The service is available for locations within a reasonable range that can be reached within the same day
• The service normally comes at a premium price
Standard Courier Service
• Most commonly used courier service by individuals and business organizations
• Though it provides a reasonably timely service it is not as fast as other courier services and is priced accordingly
• It service provides security and timely service but fails to provide tracking and ‘signature on receipt’ facilities
Overnight Courier Service• The overnight courier service is offered for selected destinations• The service is expensive than Standard Courier but cheaper than On‐ Board, Personal and Same day Courier Services
Back Loads and Part Loads Courier Service
• This type of service is usually utilized by businesses that depend on frequent delivery of items from a courier
• Urgency is ruled out and the items are delivered as and when thecourier company has to deliver some other package in the same area
• This is a cost saving business strategy employed by companies
COURIER MARKET IN INDIA 2012.PPT
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Ever rising number of franchisees of the big players in the market is indicative of popularity of franchisee model
Courier market in India operates through franchisee model for raising accessibility of its customersHigher the number of franchisees in the market space higher will be its visibility that will ensure greater business for
the companies
INR A mn to INR B mnTotal Investment
t sq. feet to q sq. feetArea Required
ROI %Return on Investment
Y months to Z monthsExpected Breakeven
Low cost franchisee opportunities by renowned companies is mutually beneficial for the company as well as the franchisee operatorFranchisee options of various valuations enables small starters to initiate their business easily while the company benefits as its
outlet number increases
Adequate training in Supply Chain Management
Company Support
COURIER MARKET IN INDIA 2012.PPT
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Key Issues
Delivery Snags
Internet Accessibility E‐Billing Popularity
COURIER MARKET IN INDIA 2012.PPT
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COURIER MARKET IN INDIA 2012.PPT
Drivers & Challenges – Summary
Drivers
Global Trade Boom
Growth in e‐Commerce
Financial Institutions Dependence on Courier
Growing Business of Private Telecom Sector
Seasonal Business Upsurge Due to Occasions
Challenges
Poor Infrastructure is a major decelerator
Poor Warehousing Facility is a Major Deterrent
Delay in Clearances
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COURIER MARKET IN INDIA 2012.PPT
Benefits of Technology Adoption
Time management is the key to expert courier service that is highly dependant on suitableTechnology adoption
Electronic mode of saving information enables easy search and saves labor and
clerical cost
Using software and handheld devices raises
accuracy nullifying incidence of costly time
consuming errors
Technology solutions allows
real time information tracking
Use of electronic data makes information accessibility easy and helps in internal use report production
Has positive environmental
impact by reducing paper
use
Warehouse management system
enables smooth business operation,
monitoring warehouse functions, thus
increasing efficiency
Transport management software streamlines transportation routes,
collection, organization and monitoring of drivers, deliveries and transport resources reducing energy
and other related expense
Delivery confirmation of signatures can be captured, stored and reported automatically
Using hand held devices saves time and saves
cost
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SAMPLE Express Industry Council of India (EICI)
COURIER MARKET IN INDIA 2012.PPT
• The EICI is an organization formed by players of the industry with the aim to protect and promote common interest of Express industry and its members
• EICI has affiliation of express bodies such as Global Express Association and Conference of Asia Pacific Express Carriers
`Role of EICI
Plays a vital role in interacting with the Government, the Customs and other related government organizations
The organization has been successful in clearing major bottlenecks and delays that occur in express industry
The organization plays a major role in bringing about speedy clearances and aid in importing greater volumes
12
1,600
18,000
Net Profit/Loss
‐2,000
400
2,000
200
4,000
0
6,000
‐200
8,000
‐400
Total Income
20,000
600
800
10,000
1,000
1,200
1,400
12,000 14,000 16,0000
Player 3
Player 2
Player 1
Player 3Player 2Player 1
Size of the Bubble represents Market Capitalization in INR mn
Major Public Companies – Summary
COURIER MARKET IN INDIA 2012.PPT
SAMPLE
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Key People
Products and Services
Company Information Offices and Centres – India
Corporate Address
Player A
5th Road, 6th Street,
City A – 700 xxx
Tel No. 91 22 6679 xxxx
Fax No. 91 22 6679 xxxx
Website www.playera.com
Year of Incorporation 19‐‐
Ticker Symbol 53xxxx (BSE)
Stock Exchange Bombay Stock Exchange
Name Designation
Person A MD
Person B CFO
Person C CEO
Head Office
Public: Domestic Company – Player A (1/3)
City X
Category Products/Services
Courier and Express Package Distributor
Door‐to‐door express deliveries for documents, packages, commercial shipments
PackagingAir and ground express packaging services under Smart Box
COURIER MARKET IN INDIA 2012.PPT
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Financial Snapshot Key Ratios
Financial Summary
• The company incurred a net loss of INR d units in FY 20‐‐, as compared to net loss of INR c units in FY 20‐‐
• The company reported total income of INR R4 units in FY 20‐‐, registering an increase of m% over FY 20‐‐
• The company earned an operating margin of f% in FY 20‐‐, an increase of g percentage points over FY 20‐‐
• The company reported debt to equity ratio of d in FY 20‐‐, a decrease of h% over FY 20‐‐
Net Profit/LossTotal Income
INR units
‐20
‐40
‐60
‐80
INR units
250
200
150
100
50
020‐‐
dR4
20‐‐
cR3
20‐‐
b
R2
20‐‐
a
R1
Private: Foreign Company – Player A (2/3)
Particulars y‐o‐y change (2011‐10)
2011 2010 2009 2008
Profitability RatiosOperating Margin ‐53.06 4.89% 57.96% 5.66% 5.11%
Net Margin ‐33.91 2.65% 36.56% 3.01% 2.85%
Profit Before Tax Margin ‐50.68 4.77% 55.45% 4.94% 4.27%
Return on Equity ‐5.51 16.55% 22.06% 21.36% 23.63%
Return on Capital Employed ‐348.16 ‐160.22% 187.94% 71.33% 84.50%
Return on Working Capital ‐6.61 20.55% 27.15% 21.36% 20.68%
Return on Assets ‐3.73 16.06% 19.79% 14.22% 12.38%
Return on Fixed Assets 21.65 143.41% 121.76% 60.16% 42.80%
Cost RatiosOperating costs (% of Sales) 53.06 95.11% 42.04% 94.34% 94.89%
Administration costs (% of Sales)
0.00 0.00% 0.00% 0.00% 0.00%
Interest costs (% of Sales) ‐2.38 0.13% 2.51% 0.72% 0.84%
Liquidity RatiosCurrent Ratio ‐11.48% 1.66 1.87 2.06 1.81
Cash Ratio 5.83% 0.46 0.43 0.42 0.36
Leverage RatiosDebt to Equity Ratio ‐73.46% 0.03 0.11 0.50 0.91
Debt to Capital Ratio ‐71.29% 0.03 0.10 0.33 0.48
Interest Coverage Ratio 68.45% 38.97 23.13 7.83 6.06
Efficiency RatiosFixed Asset Turnover 1523.99% 54.09 3.33 19.97 15.03
Asset Turnover 1019.01% 6.06 0.54 4.72 4.35
Current Asset Turnover 788.69% 3.08 0.35 3.66 3.25
Working Capital Turnover 943.41% 7.75 0.74 7.09 7.26
Capital Employed Turnover 934.35% 6.24 0.60 7.09 8.30
Improved Decline
COURIER MARKET IN INDIA 2012.PPT
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COURIER MARKET IN INDIA 2012.PPT
Key Business Segments Key Geographic Segments
Business Highlights
Description News
Overview
Infrastructure
Recognitions
0%
50%
100%
20‐‐
A
0%
50%
100%
20‐‐
B
XX
Private: Foreign Company – Player A (3/3)
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COURIER MARKET IN INDIA 2012.PPT
Appendix
Ratio Calculations
Operating Margin (Operating Income/Revenues)*100
Net Margin (Net Profit / Revenues) *100
Profit Before Tax Margin (Income Before Tax / Revenues *100
Return on Equity (ROE) (Net Income / Shareholders Equity)*100
Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100
Return on Working Capital (Net Income / Working Capital) *100
Return on Assets (Net Income / Total Assets)*100
Return on Fixed Assets (Net Income / Fixed Assets) *100
Operating Costs (% of Sales) (Operating Expenses / Sales) *100
Administration Costs (% of Sales)
(Administrative Expenses / Sales) *100
Interest Costs (% of Sales) (Interest Expenses / Sales) *100
Ratio Calculations
Current RatioCurrent Assets / Current Liabilities
Cash Ratio{(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
Debt to Equity Total Liabilities / Shareholders Equity
Debt to Capital Ratio{Total Debt / (Shareholders Equity + Total Debt)}
Interest Coverage Ratio EBIT / Interest Expense
Fixed Asset Turnover Sales / Fixed Assets
Asset Turnover Sales / Total Assets
Current Asset Turnover Sales / Current Assets
Working Capital Turnover Sales / Working Capital
Capital Employed Turnover Sales / Shareholders Equity
17COURIER MARKET IN INDIA 2012.PPT
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