Does V-Mart open in towns with … lower GDP?

V-Mart is a ‘complete family fashion store’ that, as of today, operates in cities in North India. A cursory glance at V-Mart’s locations told me that V-Mart did not have shops in any metropolitan cities except for Delhi. V-Mart was absent in Mumbai, Bangalore, Chennai, Hyderabad and Kolkata but was present in many tier 2 and tier 3 cities that I had never heard of. This got me curious and I wanted to see if V-Mart stores were predominant in towns with lower GDP.

I compared the locations of V-Mart stores to the GDP of these cities in this spreadsheet. I found that 96 of 104 V-Mart cities had only 1 store. This meant that it would not make much sense to plot the number of outlets in each city against the GDP of these cities, as I did for other chains.

So I went ahead and compared all of the Inox, CCD, Dominos and Eicher cities against their GDP. I took the median and mean of the GDP of all cities for every chain and this is what I found. For the sake of legibility, the GDP figures are divided by 10^8.

Inox:  Mean – 71.1, Median – 28.2

CCD: Mean – 41.5, Median – 16.3

Dominos: Mean – 32.9, Median – 12.4

Eicher: Mean – 29.4, Median – 11.4

V-Mart: Mean – 25.8, Median – 9.1

Clearly, V-Mart cities, on average, have lower GDP.

Also, 26 of 104 V-Mart locations are unique in the way that these cities have a V-Mart store but do not have any Inox, CCD, Dominos or Eicher outlets.

Both these findings tell me that V-Mart retails goods to a different market than the other mentioned chains. According to V-Mart’s 2014-2015 annual report,

“There are a number of Indias within India. The chic upmarket India. And the aspiring under-penetrated mid-market India. It would have been easier to market to the chic upmarket India. At V-Mart,we selected to retail to the aspiring, underpenetrated mid-market India instead.”

So V-Mart, on average, does in fact opens in towns with lower GDP. I now know that GDP is not a factor which describes a suitable location for a new store. Next week, I will try and find a factor that could possibly describe a suitable location for a new V-Mart outlet.

 

 

 

1 movie hall for 9 million people

Inox, according to their Investor Presentation from November 2015, now has 101 cinema hall properties in 55 cities in India, which means that Inox, in India has 1 movie hall per 12 million people. This number seems way too large to think about effectively so I tried to break down the number of people per Inox screen.

Turns out, there’s still 3 million people per Inox screen in India. This seems extremely underwhelming especially because India, according to Forbes, houses a $1.6 billion film industry, Bollywood. This seems even more so because India has a movie loving crowd at every level who go so far as to idolize movie stars.

 

 

1 movie screen per 3 million people seemed too low a number of movie screens to believe, so I thought that maybe Inox was not as big a player as I assumed. There were probably other companies commanding more market share that dominated the film exhibition industry. That, and maybe the fact that these multiplexes had not yet gotten to the smaller towns and villages – who still probably watched movies at single screens at lower prices.

This really got me curious and I decided to see if Inox had enough market share for me to be making this comparison. I went through their 2014-2015 annual report, and found that they claim a 23% market share in multiplex screens. This means that even accounting for all multiplex screens, there was still a really large under-screening problem in India.

 

 

India has an appallingly low screen density when stacked against other countries. The comparison above really brings out the extent of this under-screening problem in India. I am really surprised at the lack of screens in India and amazed at how much potential there is for the film exhibition industry to grow.

Note that the populations are sourced from the 2011 India Census for both – cities and the country as a whole.