As the Indian economy grows on a much larger base (about $1,500 billion in 2011), it is interesting to see the emergence of new, very promising “micro segments” of different industries and services. Some of them are already much bigger than the conventionally high-interest ones, and many are creating jobs (and wealth) at a faster clip than many of the conventional ones. For example, the total size of the oral care industry in India is less than Rs 4,700 crore with an inexplicably low, single-digit growth rate of about 5-6 per cent. On the other hand, the market for beauty and grooming services has already crossed Rs 15,000 crore and is growing at more than 15 per cent per year. Personal care products and detergents markets are estimated to be about Rs 12,000 crore each and growing at about 10 per cent per year. Against this, the market for personal vehicles’ repair and servicing has already crossed Rs 20,000 crore and growing at between 12 per cent and 14 per cent per year. The market for pre-owned cars is already Rs 45,000 crore, and growing at a scorching 20 per cent or higher rate, and the same for car and two-wheeler accessories is already more than Rs 6,000 crore. Indeed, notwithstanding the substitution of the watch with the mobile phone as the time-keeper, the Horological industry has already grown to about Rs 4,400 crore and continues to grow at between 8 per cent and 15 per cent with higher growth rates for higher-end watches. Many others, including the wedding planning industry, private and commercial catering and hospitality industry, industrial and civic waste management industry, event management industry, etc. etc., have also been doing quite well, though it is very difficult to put out an accurate estimate of their annual revenues and growth rate. At these growth rates, some of these sectors will touch Rs 75,000-Rs 100,000 crore mark by 2015, while others will touch or cross Rs 10,000 crore very easily.
This scaling up of many diverse, hitherto marginal, business segments has many interesting and important implications. First, from the government’s point of view, it must start acknowledging and studying these fast-growing sub-segments of the economy and come out with specific industrial and fiscal policies which can provide further growth thrust to such segments. Each of these segments is already creating tens of thousands of new jobs every year, and many of them, such as automobile servicing and beauty and grooming, create such jobs across India (including rural India) and absorb Indians mostly from the less-privileged socioeconomic strata. Many, such as the Horological industry, also provide fresh opportunities for investment in manufacturing of precision components not only for the domestic needs but also for making India a hub for exports of such components and perhaps even the finished product (watches) in the near future. In many cases, such segments are incorrectly clubbed with other, traditional segments, thereby forcing them to operate under anachronistic policies (such as application of the “weights and measure Act” to watches, requiring compliance with irrational packaging regulations). Hence, it would be desirable if the government can create specific “desks” within the industry, commerce, and finance ministries which track such sub-segments closely and provide the requisite input for policy drafting and updating. It would also help if the chambers of commerce can strengthen their internal infrastructure to come out with white papers on these sub-segments since many of them may not yet find representation at the membership level, and hence it may not be possible to create “industry sub-committees” in all the cases.
Relating to their job-creation potential, government as well as private entrepreneurs should also be focusing on creating appropriate vocational education businesses built around the skills needed in these fast-growing sub-sectors, have a delivery model which is aligned to the geographic distribution of such jobs, and have the capacity capable of meeting the present as well as the steeply ramped-up needs in the future.
For current and would-be entrepreneurs, as these sub-segments become multi-thousand crores in annual revenues, there is a plethora of new business opportunities to take advantage of. These can be both in the “front end”, i.e. end customer facing, or in the supply and distribution side to the front-end business. Indeed, the next generation of India’s multimillionaires and the “entrepreneurs of the year” could well emerge from these sometimes less well understood and appreciated but much faster-growing sub-segments.
