The events & activations industry grew 15% annually from Rs 2,800 crore in 2011-12 to Rs 4,258 crore in 2014-15, according to an EY-EEMA (Event and Entertainment Management Association) report titled 'Making experiences in India.
According to the report, the events and activations industry is expected to grow to Rs 5,779 crore by 2016-17.
This growth will be on the back of marketers increasing their below the line (including digital) spends to 21% of their total marketing spends. The growth will also be led by personal events, MICE (meetings, incentives, conferences and exhibitions), activations and sports, the report said.
The report, which was released recently, states that while managed events remains the largest service offering, IP (Intellectual Property) and digital events are growing at a faster rate than managed events.
There is a need for the industry to work on acquiring the right talent, managing costs, demonstrating ROI to marketers and increasing transparency in operations, the report added.
Ashish Pherwani, Partner and Media & Entertainment Advisory Leader, EY India in a statement said, "The events and activations industry holds great potential and this is evident from the considerable growth that the industry witnessed over the last few years. Our report aims to provide insights around key strengths of the industry and the challenges it faces. The report also looks into the opportunities for M&A transactions, implications around taxation and corporate governance."
Sabbas Joseph, President, Event and Entertainment Management Association added, "With a new government at the helm, there is a growing interest in the culture and people. The events and activations industry is best poised to capitalise on this opportunity and there is a crying need for a new world order - one in which event companies work along with government to create an events calendar that drives tourism and related industries."
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Non-metro markets are expected to increase in importance as marketers look to tier-II and tier-III cities for incremental growth, as per the report.
Digital events and activation is also expected to grow significantly on the back drop of smart phone penetration, internet availability and the cost efficiency of such campaigns for marketers.
The report also stated that since the industry has reported very few M&A transactions over the last few years, there exists scope for consolidation.
"Valuations are driven by IPs owned, advertising agencies' interest in activations, and digital events and sports leagues. On the taxation front, double taxation, taxation across multiple states, and varying and inconsistent application of different taxes are some of the challenges faced by the industry. Also, the introduction of Goods and Services tax could have a significant impact on the industry in terms of rates and implementation across multi-state activities," it added.