Img premedia globalization_theindiaopportunity

Premedia Services Globalization
The India Opportunity
DJ Balodi, Nov 2011
PROPRIETARY: INTERMEDIA GLOBAL. 2011

PARTNER

Context & Scope
‘Premedia’ is a term that has become commonplace over the past decade across
the media & graphic communications industries such as packaging graphics,
publishing & marcoms.

This presentation specifically focuses on opportunities for PRINT premedia services
in the brand communications (packaging, advertising & marcoms) verticals.

Related industry terms Type of businesses offering premedia services
• Production Agency • Prepress tradeshops & service bureaus
• Graphics Production • Design studios
• Media Production • Ad agencies
• •

Brand Production Print service providers
• Digital Prepress • Specialist knowledge process outsourcing
• Cross-media Production (KPO) firms.

Premedia Services Defined

BRAND BRANDING PREMEDIA/ PRODUCTION PRINTER/
PRODUCT DESIGN RETAIL/
OWNER AGENCY PRODUCTION PREPRESS CONVERTER
AGENCY PRINT MEDIA
AGENCY

Takes Takes marketing Translates Converts print- Manufactures
marketing briefs and brand design ready electronic the printed
briefs and translates to to consistent, artworks to product
translates to visual branding/ error-free printing plates & (packaging,
physical form graphics. execution cylinders. POS materials
of products across all media etc.)
(Package/ forms.
POS)

CORE SKILLS: CORE SKILLS: CORE SKILLS: CORE SKILLS: CORE SKILLS:
• Conceptual • Brand • Design & • Reprographics • Printing

design communications artwork • Color Mgmt. • Finishing &
• Consumer • Graphic design adaptation • Proofing post-
research • Media planning • Reprographics • Plate/ Cylinder production
• CAD/CAM • Campaign • Color Mgmt. making • Logistics &
• Materials execution • Project Mgmt. Inventory
Science • Brand • Digital asset/ Mgmt.
guardianship workflow
Mgmt.
• Print Mgmt.

Premedia Market Realities

Global Brand Owners Global Premedia Service Providers
• Expect their service providers to • Margin pressures, high labour costs +
leverage globalization to drive down cost-reduction/ time-to-market
costs, increase service levels, widen expectations of brand owners
geographic coverage • Clients expect global service capabilities
• Need the same quality of service in including in emerging markets
India as they get in developed • Growth opportunities in Europe/ N.A
markets now very limited – market saturation
• Pressure on go-to-market timelines • India emerging as a highly attractive
force localized fulfillment of future market – retail growth and strong
production consumer demand

• India is a significant print market • Setting up global delivery centers out of
especially for packaging India a proven strategy now in the
graphic arts industry

The India Opportunity
GREATER MUMBAI: DELHI (NCR):
India’s commercial capital National Capital Region
Population: 16 mln Population: 18 mln
Largest commercial hub. Headquarters to Second largest commercial hub after
several large Indian & MNC companies. Mumbai. Headquarters to several large
Advertising & print industry hub Indian & MNC companies.
Gurgaon & Noida major BPO hubs
DELHI (NCR)
GURGAON/ NOIDA

INDIA AS A
LOW-COST INDIA AS A
PREMEDIA HUB GROWING MARKET
FOR GLOBAL FOR PREMEDIA
NEEDS SERVICES
MUMBAI PUNE
HYDERABAD:
PUNE: HYDERABAD Major IT/BPO hub
Population: 8 mln

2nd largest city in west India.
160 Kms from Mumbai Home to major print companies
Population: 7 mln BANGALORE
Major IT/ BPO hub CHENNAI CHENNAI:
India’s financial back office
BANGALORE: Population: 8 mln
India’s Silicon Valley. Automotive, software &
Population: 8 mln BPO hub. Emerged as a
Automotive, software & BPO major publishing BPO
hub. Home to India’s biggest centre last 2 decades.
IT companies

INDIA: THE GLOBAL DELIVERY HUB FOR PREMEDIA SERVICES

India: The Destination of Choice

India has natural and multiple advantages over
countries like China or other Asian or Latin American
countries that are emerging as outsourcing hubs. In the
recent past, India Inc has been able to establish its brand
in the international market. Its extraordinary quality of
human resource and domain knowledge clearly puts it in
an advantageous position.

Bruce Chizen
President & CEO
Adobe Systems Inc, USA

India: The Global Services Leader
FINANCIAL ATTRACTIVENESS

• Compensation costs
• Infrastructure costs
• Tax & Regulatory costs

PEOPLE SKILLS &
AVAILABILITY

• Remote services sector
experience & quality
rating
• Labour force availability
• Education & Language
• Attrition risk

BUSINESS ENVIRONMENT

• Politico-economic
environment
• Infrastructure quality
• Cultural exposure

Source: A.T.Kearney Global Services Location Index, 2011

India: Advantages
LOW LABOUR COSTS LANGUAGE SKILLS
• Artworker with skills on Adobe, India’s education system
ESKO platforms is typically bi-lingual with
• 8-10 years in packaging/ English as the primary
commercial prepress TIME ZONE DIFFERENCE medium of education.
Urban Indians grow up
USA: US$ 28,000 – 40,000 p.a India’s geographic location puts it speaking their local
UK: US$ 32,000 – 48,000 p.a right in the heart of a East-West language as well as
timezone divide. A regular 10 a.m English. The Times of
Europe: US$ 32,000 – 48,000 p.a – 6 p.m work shift in India is the India is the world’s
India: US$ 8,000 – 12,000 p.a equivalent of an additional 4-5 largest circulated English
hours work time for Europe/ UK & daily newspaper.
ANZ and a full shift for America…
MNC BRAND PRESENCE
10.00 am in India is: MATURE BPO / KPO

Consumer Goods: Unilever, INDUSTRY
3.30 p.m in Sydney
P&G, Reckitt Benckiser, Kellogs,
Kraft, Coca Cola, Pepsico… 4.30 am in London From market research &
Pharma: Pfizer, Merck, Glaxo 5.30 am in Berlin analytics to engineering
Smithkline, J&J. design, IT support,
Retail: M&S, Walmart, Tesco, 1.30 a.m in New York, Toronto
software services, legal,
Carrefour, Metro, Kenneth Cole. 10.30 p.m in Los Angeles (prev. day) accounting & publishing…

Outsourceable Premedia Services
Hi

Artwork
MECHANICAL/ RULES-BASED WORK

Repro/ File Production
(Collaboration Not Necessary)

Preparation

Artwork
Adaptation
Ideal for
Design
Adaptation
Image Offshore
3D Retouching
Visualization
Production

Packaging/
Structural

Design Graphic
Design

Lo
Lo LABOUR COSTS DEPLOYMENT Hi
(High-volume Labour Deployment)

Premedia Globalization: First Movers

Source: Intermedia Global research, updated Nov, 2011
This list is representative. We believe between 50-60 other small, medium & large premedia & graphic services players from Europe,
America & ANZ currently outsource with multiple Indian suppliers across commercial publishing & packaging premedia.

Lenovo’s Global Marketing Hub
Lenovo zeroed in on India for
its global marketing hub for
many reasons: India is among
Lenovo's fastest growing
markets, offers a cost
advantage and has a large pool
of marketing talent. India was
the first market outside of
China where Lenovo
introduced its consumer
products in March 2006.
(Lenovo entered the global
consumer space later in 2008.) hub in Bangalore. The hub, which currently has
It was not just its own around 40 members, began
Both Lenovo's global with baby steps. The
marketing communications marketing hub and the Ogilvy
and services teams that translation and production
team in Bangalore have work that were happening in
Lenovo grouped in one

executives dedicated to the different regions of the world
location. At that time, Lenovo various geographies in which
worked with advertising moved to Bangalore as did
Lenovo operates. These some aspects of creative
agency Ogilvy & Mather in 25 executives work closely with
different locations across the development.
each other and with the
world. In a parallel move, Lenovo teams to fulfil their
Lenovo convinced Ogilvy to specific requirements, taking Source: Excerpted from an article by
centralize all its operations for into account geographical and Knowledge@Wharton, June 2010
Lenovo and locate its own local cultural sensibilities.


INDIA: THE NEXT BIG MARKET

India The Market: A Snapshot

The 11th largest world economy in 2010
• Real GDP : ~ $1.5 trillion.
• GDP (PPP) : $4 trillion. (5th largest)
• GDP Growth Rate (last 5 years) : ~6 - 8.5% p.a
• Workforce labour : ~ 500 million (2nd largest)
• Middle class consumer base : 300 mln by 2015 (~ the US population)
• Exports : $210 billion (17th largest)

• Imports : $327 billion (11th largest)
• Mobile phone penetration : 700 million users (2nd largest)
Source: IBEF

US $ = ~ 49 | GBP = ~ 75 | Euro = ~ 68.5 | AUD = ~ 52 | CAD = ~ 49

Global Brand Owners Believe…

The Indian market is at We will be investing one of our
the cusp of a revolution We cannot
biggest amounts in the Indian
in packaged beverages. remain a market this year and a part of
As a general rule, we
expect India to outgrow global industry the investment will be used for
the world average; leader without developing new products and
outgrow Eurasia and technologies.
the Africa group... a strong Stefano Pelle
Ahmet C Bozer presence in MD, Perfetti Van Melle
President, Eurasia and
Africa, Coca-Cola India. India is a long-term
Karl Slym investment for us and
India has a huge Head, GM India
we are keen on building

opportunity to the supply chain.
We are very optimistic
become a food basket Herve Clec'h
about India as a brand
for the world. Managing Director
Scott Price destination. Carrefour WC&C India
President and CEO Martin Jones
Wal-Mart Asia CEO, Marks & Spencer
Reliance India Source: IBEF

International Brand Gurus Say…

Compared to China, What's struck me is the India is an
energy and restless interesting
India has a much
ambition in India. You can combination -
stronger and self- actually, tangibly feel
sufficient skill base... world class talent
the drive...
India is truly the Peter Knapp that can speak
powerhouse of the Executive Creative Director, English and a
Landor Associates
future. strong
Michael Maedel
Here in India and technological
President, JWT Worldwide
expertise.
Asia the evolution Tony Wright
Chairman, Lowe Worldwide
has reached

India has a fantastic
future in terms of the revolution. In a
communications industry.
John Hegarty good sense.
Chairman & Worldwide Creative John Dooner
Director, BBH Chairman & CEO, McCann
Worldgroup Source: IBEF

Leading Business Analysts Think…

If you put one dollar in The dynamism Asia should not be
the US, you may get two shown by India in the painted with one
dollars in three years. But last 15 years is brush; India has
if you put the same dollar phenomenal.
Paul Wolfowitz
separated itself from
in India, there is a high
President , World Bank the pack; it is not
chance of getting
three dollars.
unduly dependent on
Wayne W Tosu external demand, and
Managing Director, Carlyle Group India is now it has an increasingly
India's highly educated
truly a land of powerful IT-enabled,
services-led growth
workforce, management opportunity.

talent, rule of law, John Redwood
dynamic.
transparency, cultural affinity Economic Competitiveness Stephen Roach
Policy Group, UK Chief Global Economist &
and regulator environment are Managing Director
more favourable than China's. Morgan Stanley
A T Kearney
FDI index report Source: IBEF

Global Political Leaders Feel…

America cannot ignore
the fact that the centre India is not India's
unprecedented
of gravity is moving
eastwards to Asia, away
simply emerging: economic growth
over the past
from Europe and North India has already decade makes it an
America, and India will be attractive prospect
the motor force in emerged. for companies
globalisation. Barack Obama seeking new
Frank G Wisner President, US
Former US Ambassador to India
markets for their
and Vice President products and
American International Group The courageous reforms have services...

External Affairs led to enormous economic Bertie Ahern
growth in India. With a growth Prime Minister, Ireland
rate of over eight percent, India
ranks at the top even in this
very difficult period globally.
Gerhard Schroeder
Chancellor, Germany Source: IBEF

The Rise of Indian Retail

By 2015:
• India is set to be a US$ 450 bln
retail market. In 2008, Italy was at
US$ 462 bln and Brazil at US$ 258 ORGANIZED
RETAIL
• Organized retail in India to be SEGMENTS,
14-18% of total retail (5% of INDIA

market in 2008)
• Indian retail will cater to 300 mln
shoppers – about the size of US’
population.
Source: McKinsey & Co., The Great
Indian Bazaar, 2008

Source: Dun & Bradstreet

Global Retailers & India
On November 23rd 2011, the Government of India in a landmark decision allowed
new norms for FDI in the retail sector:
51% FDI allowed in multi-brand retail & 100% in single-brand retail (up from 51%)

MAJOR GLOBAL RETAILERS WITH INDIA PLANS:
MULTI-BRAND SINGLE-BRAND

Wal Mart – Currently in India with a 50:50 JV M&S – 51:49 JV with Reliance Retail
with Bharti Enterprises Giorgio Armani – 51:49 JV with DLF Group
Carrefour – Likely to tie up with Future Group Tommy Hilfiger – JV with Arvind Brands
Tesco – JV with Tata Group since 2008. Versace – Licensed reseller arrangement with
Metro AG – Currently in India with a 50:50 JV Blues Clothing

with Bharti Enterprises Zara – JV with Tata Group
Auchan – plans not known Mothercare – JV with DLF Group
Target – plans not known IKEA/ H&M/ GAP – plans for a 100% subsidiary
Best Buy – plans not known
Ahold – plans not known
Source: Dun & Bradstreet


IMPLEMENTING YOUR INDIA STRATEGY

Your India Strategy Options
Establish presence

Strategic
WHOLLY-OWNED
in emerging Indian SUBSIDIARY Company control
JV – B.O.T
market is transferred to
MODEL
you in a phased,
pre-agreed time
Develop a global INTENT BEHIND INDIA STRATEGY 3rd PARTY Your ownership/ plan
B.O.T Turnkey managed by
services capability vendor/ Operations
transferred to you over JV MODEL Long-term strategic
pre-agreed time plan relationship/ Dedicated
Resourcing/ Dedicated
Be price competitive Company (co-branded)/
on global projects Equity participation

LONG-TERM CONTRACTUAL Dedicated staff/ Acct. Mgmt/
Manage peak- Space/ Assured work volumes
VENDOR RELATIONSHIP
load/ production
Option: Dedicated company

overflow
(no Equity participation)

Reduce current CLIENT-SUPPLIER PRICING On-demand resources typically
Tactical

AGREEMENT BASED RELATIONSHIP project based
operating costs

Immediate Long-term
TIMELINE
Vendor-sourced path Self-ownership path

How We Can Help
- Build-Operate-Transfer (BOT) captive operations
- Your ownership, your investments, our management expertise.
- Intermedia Global (IMG) takes turnkey responsibility to set-up
facility, hire resources, transition processes, operate the studio and
manage delivery of services on your behalf.
- Over a pre-agreed timeline, IMG hands over operations to your
team and exits/ continues to provide advisory services.

- Manage vendor-sourced operations
- IMG helps you identify right vendor, ensure allocation of right M&A AND STRATEGIC
resources, manage process migration (project management) and ADVISORY SERVICES
PARTNER
provides on-going management oversight as your India
representatives.

- JV partner/ acquisition services
- Custom projects

Intermedia Global Credentials
• Marketing and management consulting firm with strong roots in the graphic
arts, ITeS/KPO, publishing and brand communications industries.
• Over 20+ man years of our unique professional and managerial experience
in setting up and running successful premedia KPO businesses & large-scale
outsourcing projects across:
– Packaging Premedia
– Marketing Communications
– Publishing Prepress Services
PARTNER
– ePublishing/ Cross-media Production
• Strong relationships with top-of-the-line
Indian print, premedia, publishing & graphic communications companies

• Satisfied global customers
• Access to specialist skills and expertise across production, technology,
industry knowledge within India and overseas.

Client Engagements (Representative)

Top UK packaging premedia Strategic partner of imaging &
company (Clients include Pepsico, digital print MNC
Cadbury, M&S) looking for India supplier
for offshore artwork production. IMG services: Strategy/ design &
development of new services in
IMG services: Vendor/ partner partnership with large IT company/
identification & evaluation Business model/ Go-to-market/ Business
Offshore strategy development development

German premedia consortium Leading Indian commercial prepress
(Clients include Nestle, Suzuki Motors) provider (Looking to transform into
premedia KPO services provider)

IMG services: Vendor/ partner
identification & evaluation IMG services: Strategy/ business design
Capability development/ marketing &
operations excellence/ KPO culture

Clientspeak

“Intermedia Global did great work for us in first giving us a very detailed and
precise analysis of the Indian advertising, marketing and media production industry. And
they showed deep understanding of the prepress and print industry again in providing
and managing relationships to great potential partners for our company. The companies
all fitted our needs perfectly!“

Managing Partner & Director of a leading German premedia (packaging, commercial,
design) services group.

“Intermedia Global has been an outstanding business partner, exceptionally
goal oriented and a thorough professional. On a project we worked on together,
Intermedia Global demonstrated exceptional business acumen, solution and customer

management skills. They have gone out of the way to set up a new line of business and
delivered services with a third party. A very committed and dedicated professional team
that brings high energy and enthusiasm.”

General Manager & Practice Lead, Media & Entertainment, Top 5 IT services firm.

Clientspeak

“I have worked with Intermedia Global on market and business development projects
where their strong skills in strategic planning and tactical execution were
critical. I have found them to be professional and honest in all our dealings and would
recommend Intermedia Global for any marketing or market development role.”

Leading Packaging Industry Consultant based in New York area.

“I had the distinct pleasure of working with Intermedia Global while leading a global
packaging initiative. Their team provided tremendous support and professional service,
while partnering on the initiative. As a thought leader within the global

outsourcing of premedia solutions, Intermedia Global is knowledgeable,
proactive and has the experience to deliver success. I highly recommend Intermedia
Global.”

Program Manager/ Sr. Consultant at a Top 3 global branding agency.

Author Profile
DJ is Founder & Managing Partner at Intermedia Global – a strategic
marketing and premedia KPO consultancy and an Esko Artwork
consulting partner. Over a 19 year career, DJ has successfully built and
managed premedia offshoring businesses, led e-Commerce & IT services
initiatives at a Top 5 IT services company, launched and edited a popular
German magazine in the Indian market and designed and developed a
collaborative publishing workflow software.

DJ is currently involved in a consulting role with Eastman Kodak for a
global strategic initiative involving the development & market rollout of a
new managed services business. He has been consulting for premedia and
marketing services businesses across Europe & America interested in the
India opportunity.

Earlier, DJ was Managing Partner in a joint venture with a leading
commercial prepress company where he successfully led the business’

transition into a global premedia outsourcing supplier in the packaging &
commercial premedia services market. In October 2008, DJ was invited to
be panelist at the US FTAA’s (Flexographic Technical Trade Association)
annual conference to speak on trends in premedia offshoring.

DJ can be reached on email at dj@intermediaglobal.com or on cell phone
at +91 98923 23661.

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