Markets with sizeable consumption base and growing economy are increasingly influencing the investments and enterprise led focus on technological enablement

1. E+ Opportunities & Winning Strategies
Zinnov Centre of Excellence for Emerging Markets
This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated
or reproduced for distribution outside the client organization without prior written approval from Zinnov

2. We are an 12 year old management consulting company
2012 - 2013
• IAOP: Top 20
Globalization
Advisors over
the last 4 years
2010 - 2012
and talent solution - Talent Neuron,
• Global Technology Firms
2006 - 2010
enabler in India for Industry associations
technology companies
120 People
150+
Customers
2002 - 2006
funded companies, R&D center setup for
2
Globalizationadvisory for US based VC
mid size to large technology companies
Knowledge Partner and Eco-System
and GoI, India Market Expansion for
Our Customers:
• Indian IT-BPO Companies
• Government
• Industry Associations
Focus Areas
• Modern IT/ Cloud
• R&D
• Shared Services
• Innovation
• SMB
• Start-ups
• Emerging Markets
Growth strategiesfor technology
companies, Zinnov’s proprietary location
helped large MNCs in GTM
Global Office Locations:
• Santa Clara (US)
• Houston (US)
• Bangalore (India)
• Gurgaon (India)
• Singapore
• Beijing (China)
Zinnov’s launch of COE for “Emerging
Markets”, New global locations – China &
Singapore

3. Our illustrative list of customer speaks volume about our growth
Consumer
Electronics &
Semiconductor
Engineering Internet
Solutions
Server
Storage
Associations &
Trade Bodies
Software
Products
Telecom &
Networking
3

4. Introduction to E+1
Vertical Transformation2
Winning Strategies3
4
Agenda
Zinnov Management Consulting

5. E+ Markets: Markets with sizable consumption base and growing
economic power
E+ Economies
China
GDP PPP Per Capita: $9,162
Population: 1,354 Million
Over 40% of world
Population
~USD 19 Tr in GDP (PPP
Basis)
Philippines
GDP PPP Per Capita: $4,430
Population: 95.8 Million
India
GDP PPP Per Capita: $3,830
Population: 1,223.2 Million
GDP Reinvestment at 43%,
US stands at 16%
Malaysia
GDP PPP Per Capita: $16,922
Population: 29.5 Million
Indonesia
GDP PPP Per Capita: $4,977
Population: 244.5 Million
Global GDP contribution at
23%
US contribution 19%
5Note: Considered APAC economies excluding Japan and Singapore for evaluation and filtered on the basis of GDP and Population

6. E+ economies will lead the next wave of Investments
Growth In Government Spending
CAGR 2008-11
1
Key sectors for investment :
• Technology led inclusive growth
• Education & healthcare sectors21%17% 17%3% 12% 12%
United States China India Indonesia Malaysia Philippines
Growth In Household Spending
CAGR 2008-11
2
Rising young population (15-45 years)
driving the household expenditure 16% 14% 14%2% 10% 9%
United States China India Indonesia Malaysia Philippines
Growth In Foreign Investments
CAGR 2008-11
3
-8%
25%-9% 17%9% 9% Liberalization of key sectors such as
multi-brand retail, aviation, Auto etc.
IndonesiaUnited States China India Malaysia Philippines
6

7. The focus on technology investments in E+ Economies is on the rise
Share Of IT Spending
USA V/S E+ Economies (China, India, Indonesia, Philippines, and Malaysia)
2020
IT spending growth in E+
Economies will be more
2008
E+ Economies
USA
than that of the USA USA
65% Malaysia India
35%14%
86%
China
Growth in IT Spending
in E+ Economies is
driven by:
Philippines Indonesia
E+ Economies
A
Expanding base of
globally competitive
large and mid-market
enterprises
B C
Strong base of growing
domestic micro & small
companies
Growth of enabling IT
infrastructure
7
%ITSpending

8. Enterprise led opportunity in E+
times of US Market
could potentially be 3 to 4
A
Large & Mid Market Enterprises
Employing more than 200 employees (2012)
Total Enterprises in Forbes 2,000 List
1500
41,000
# of Forbes 2,000
enterprises to grow by
~300% in E+ economies
Banking
Gas
Industrial
Telecom
Electronics
United States
1000
Automotive
95,000 Retail
Real Estate
543
500
China
55,000E+ Economies
India 15,700
Indonesia 4,800
Malaysia
0
2012
United States
2020
E+ Economies
3,500
Philippines
174,000
8
1160
Bank
Oil &
Indu
Telec
Elect
Auto
Ret
543 Real
378
Banking
275 Oil & Gas
Industrial
Telecom

9. Enterprises from E+ are already making it big in global markets A
Operations
in 80
Countries
US$ 100 Bn
in Revenue
Business in
7 Sectors
58% Export
Revenue
Largest PC
Manufactur
er
Operations
in 60
Countries
US$ 30 Bn
in Revenue
27,000
Employees
9

10. Micro and small businesses are starting
economic growth of E+ markets
to play a key role in
B
Number of Small and Medium Businesses
Employing less than 200 employees (Mn) (2012)
SMBs account for over 20% of the
total GDP for E+ markets
23
United States
Philippines’s SMBs contribute 36%
of Total Manufacturing output51
China
48E+ Economies
India
Indian SMBs contribute 40% to the
total exports of the country
25
Indonesia 0.8
Malaysia 0.6
Philippines
125.4
10

11. )
Strong internet and mobile infrastructure
IT investment growth in E+ countries
Internet Users (Mn) and Penetration (%) (2012)
is enabling
C
Potential Internet Users
(2020)1
United States
2,256 Mn
E+ Economies)(23%)
E+ Economies
Philippines
China India Indonesia Malaysia
Smartphone Users (Mn) (2012) Potential Smartphone Users
(2020)
United States
1,795 Mn
E+ Economies
E+ Economies
Philippines
Malaysia
IndonesiaChina
India
11Note: 1Estimated based on the assumption that E+ markets will be nearing the internet population penetration of USA in the coming years
330 52 44 29 7.8
175
564
(42%)
157
(11%)
55
(23%)
34
(35%
18
(70%
244 (78%)

12. Introduction to E+1
Vertical Transformation2
Winning Strategies3
12
Agenda
Zinnov Management Consulting

13. We believe that several key verticals in E+ markets will present a
massive unparalleled IT opportunity in the next few years
Constitute more than 60% of
Emerging Markets GDP
Healthcare
Telecom Energy
Constitute more than 75% of the
total IT spend by E+ Economies
E+ Economies
Major Verticals
Retail Education
Modern IT (Big Data, Cloud, M2M,
and Mobility) is starting to gain
strategic importance in these
sectors
Banking
13

14. E+ economies are witnessing tremendous
global hubs for healthcare industry
traction in becoming
Transformational Drivers Market Reactions
Pharmaceutical & Medical
Equipment Market in E+ by 2020
Of top 20 pharma companies set
up/ expanded R&D centers in E+
since 2006
$300 Bn 70%
Lower R&D & Clinical Trial Costs as
Compared to the US
85%
Relocated 115 year old X-Ray unit
global Head quarters to China to
tap growth in ChinaLower Manufacturing Costs in
Comparison to the US
50%
Invested $1 Bn in China for R&D on
locally prevalent diseases making
Shanghai one of the top 3 research
bases
Faster Time to Market due to Large
Availability of Patients for Trials
6X
Of the World’s Medical Tourism
Market to be Serviced by E+ by 2020
50%
Set up its largest global vaccine
making facility in Hyderabad, India
given the large scale of diseases
prevalent in India
Typical Out-of-pocket health
expenditure in E+ (21% in US)>75%
14

15. Technology is starting to play a significant role in availability and
quality of healthcare in E+
Jinzhou city government in China implemented Big Data for predicting future
1
Malaysia Genomics Research Institute is leveraging Big Data technologies for
2
Apollo Tele-health Services India is setting up 30 tele-medicine facilities in Africa
3
Manipal Hospitals in India is leveraging mobility solutions for constant monitoring
4
15
of fetus along with storage, and display of radiology images
using Telepresence technologies
analyzing Terabytes of data generated by Genome Mapping
health problems of its citizens (manages & stores over 100 million documents)

16. E+ economies are investing aggressively in Oil & Gas exploration &
smart grids to meet rising demands
Transformational Drivers Market Reactions
Malaysia
of Oil and Gas demand in India and
China to be fulfilled by imports
75% $30 Bn investments in Oil and Gas
exploration in 2012
Of China and India’s Oil reserves
remain unexplored
75%
$7.8 Bn investment in Shale Gas in
Indonesia in 2012
Household electrification in India &
Indonesia
<70%
India
India Smart grid task force has
plans to launch 14 pilot projects for
smart grid deployments
of the power produced is stolen in
Philippines & India
>33%
Transmission losses in India in
comparison to the world average
3X
China
$3.2 Bn smart grid investment by
China in 2012
Higher power consumption by E+
economies by 20202X
16

17. Significant use cases of modern IT adoption are emerging in the
energy vertical
PetroMalaysia deployed digital oil fields using big data technologies to enhance oil
1
Meralco, the largest utility company in Philippines is leveraging GE smart meter
2
Bharat Petroleum Corporation Limited (BPCL), an Indian public sector company has
3
BSES has deployed an advanced load forecasting solution which takes into account
4
17
lifestyle pattern, income levels, population & weather data for demand prediction
deployed M2M solutions to determine equipment health and avoid downtime
technologies for their smart grid initiatives to allow consumers to manage expenses
recovery

18. Unorganised retail sector in E+ countries is forcing many global
FMCG companies to develop large distribution networks
Unilever Delivery Reach in
Indonesia
3 Co-Packers
3 Central Distribution Centres
10 Depot Warehouses
21 Sales Area Offices
473 Distributor
Share of Unorganized and
Organized in Retail Markets
United
States
Indonesia has over 17,000 islands
•
•
•
•
•
China
India
Came up with products relevant for high humidity
scenarios. Water proof products for Muslim population
base – 30% sales growth
Indonesia
Opened its largest factory globally in Java in 2012 and
expects Indonesia to become the 3rd largest market in
Asia for beauty productsUnorganized
Market
Organized
Market
18
22% 78%
8% 92%
20% 80%
85% 15%

19. High growth in e-commerce is resulting into increased local
competition from these markets
Gross Merchandise Value, 1997-2012
E-Commerce Market ($Mn) Amazon V/S eBay V/S Alibaba/Taobao
~$165 Bn
2012 YoY Growth 2013
China based Alibaba / Taobao
exceeded Amazon and e-Bay
combined in terms of Gross
Merchandise Value
~$160 Bn
31%
United
States
36%
~$75 BnAsian Power
houses
33%
China
31%
India
1997 2005 2012
Ebay Amazon Alibaba / Taobao1,000 2,150
115%
Indonesia
• Pioneered Cash/Card-on-delivery
distribution model in India
Expects to touch over $1 Bn sales by 2015
104 145.5
39%
•
Philippines
19
18,34014,000
265,000200,000
286,000217,074
262,000224,621

20. Education transformation in E+
investment in IT infrastructure
Economies will be unleashed by
Transformational Drivers Market Reactions
Education expenditure in E+
economies; second highest after
defence
Student drop-outs from primary
and secondary education in 2012
$180
Bn
100 Mn
200k Shortage of schools in India India
Indian Government to connect
~30,000 Colleges to improve e-
learning scenarios
Non-English speaking population in
China
95%
Philippines
Philippines Government deployed
Google apps across 45,000 schools
for collaboration
Average spend per graduate in India
& Indonesia of the US average
>10%
One of the largest cloud services
deal with AICTE to connect 10,000
technical colleges in India
Of World’s internet population will
be in E+ countries by 2020
50%
Ecosystem collaboration for skilling
related virtual content &
experience for manuf. workers
Addressable market for manuf.
employee skilling & training in India>$5 Bn
20

21. Non-traditional banking innovations
inclusion in E+ markets
will drive large scale financial
Transformational Drivers Market Reactions
Rise of Banking Assets to $40.6 Tn
by 2020
Resolving the issue of
unavailability of identification
documents for unbanked people
2X
Bank branches per 10,000 people
compared to developed markets
1/3rd
China Mobile partnered with six
commercial banks to provide
mobile banking services
Unbanked Population in E+
economies currently1.4 Bn
Provides low cost banking
infrastructure at retail outlets
for largest banks in India
Banking Penetration and Unbanked Population (Mn)
United States
89%
Un-Banked
Population
India
40%
726 Mn
Indonesia
39%
144 Mn
Philippines
48%
46 Mn
Provide mobile wallet services
and already has 50.9 Mn
subscribers
21

22. Global Comparison of ARPUs (USD) (2012)
Smartphone penetration & increasing data consumption is creating
newer opportunities in the telecom space
Transformational Drivers Market Reactions
Mobile workforce across E+
economies by 2020
400
Mn
46.5 32 8.3 2
IndiaChina
>70% of employees to bring
their own device for work in E+
by 2020
UK
US
Global Comparison of Data Growth
16X
growth
12X
growth
17X
growth
60X
growth China leads in m-commerce
adoption and expected to be
$61 Bn market by 2020
Mobile
CommerceIndonesiaGlobal China India
Growth of Smartphones in E+
E+ Economies MPOS market to
reach ~300 Bn by 2017Mobile Point
of Sale
1,795 MnCAGR – 24.5%
312 Mn
Close to 50% of India’s music
revenue comes from mobiles
2012
2020 22

23. Introduction to E+1
Vertical Transformation2
Winning Strategies3
23
Agenda
Zinnov Management Consulting

24. Winning Strategies for Emerging Markets
1
Focus on Large Government Projects
2
Re-defining Distribution to Suit Local Needs
3
Leveraging Influencer Models to Drive IT Adoption
4
Creating Enabling Ecosystem for Market Development
5
Focus on Region Specific Deep Consumer Insights & Localization
24

25. IT companies are aggressively
across the world
targeting e-governance opportunities
1
Leverage Domestic wins for Global
Contracts
Consortium Bidding for Contracts
Unique ID Authority
of India (UIDAI) TCS Strategy
•Exhibit scale and complexity
domestically through large projects
•Target global contracts based on
capabilitiesbuilt from past projects
• Consortium leader
• Awarded with IT
infrastructure contact
• Consortium member
• Awarded with network
and telecom support
contract
India Post Norway Post
HCL - $ 400 Mn Contract (7 years) India Post - $ 205 Mn Contract (6 years)
RCOM - $ 55 Mn Network and Subscriber Contract Norway Post - $ 42Mn Contract (6 years)
25

26. Apple reworked its global GTM strategy for success in the
predominantly pre-paid Indian telecom market 2
2008
Introduced iPhone in India with developed
market strategy:
2012/13
Aligned GTM to Indian market
Shifted Distribution
Strategy
Distribution partners
like Redington &
Ingram
Limited
Distribution
Expanded
Distribution
Offered exclusively by
Telecom Operators
Increased
Reach
Long-term 36/48
month contracts
Local stores and e-
commerce sites
Lock-in
Changed Sales
ModelsiPhone Plans were
50% higher than
competitors
Increased
Affordability
Introduced Buyback &
EMI schemes
Costly Plans




Failed to generate volumes
Treated India as low
potential/low priority market
400% increase in shipments
Expected to generate $1 Bn
sales in FY 2013
26

27. Microsoft leveraged ecosystem partnerships to penetrate the SMB
3market in Philippines
Partnership
• Microsoft provided training & bundled solutions
to SMB’s with considerable discounts
• NATCCO gave Microsoft access to huge base of
potential customers
Benefits
• Increased SMB affordability through volume
licencing deals
• Largest federation of co-operatives in
Philippines
1.9 million individual members and
500 member cooperatives
•
• Increased relevance among large number of
SMBs with low adoption of genuine software
27

28. Google partnered with Hostgator for a unique program to get the
Indian SMBs online 4
Partnership
• Google and Hostgator to fund SMB website for 1
year post creation
Hostgator to provide domain, hosting, site building
tools & assistance to SMBs to create websites
Post the completion of 1 year, SMBs to have an
option to continue services at discounted costs
•
•
Success and Roadmap
• 150,000 websites built by Google across 7,850 cities
within a year after launch
Invited Union Cabinet Minister in ‘Chandni Chowk’, a
popular market in Delhi, and got 2,500 SMBs online
under this program
Google plans to build 500,000 free SMB websites by
end of 2014
• •World-wide provider of shared, reseller,
VPS and dedicated web hosting
~400,000 customers globally
Manages ~12,000 servers for providing
services
•
• •
28

29. Tencent has leveraged
competitors at bay
insights of local consumers to keep global
5
Deep Local Insights
• US$50bn company in
less than 15 years • Tencent has deep understanding of Chinese
netizens as compared to global counterparts
• 711 million active users
1
China’s most popular
instant messenger
Modify & Adapt Locally
• Instead of developing original services, Tencent
chooses to “modify” popular competing
products and add more local functionality2
China’s most popular
Online Gaming Platform
“Freemium” model
3 • Ad supported “Freemuim” services have lead to
Tencent’s deep penetration in the consumer
base
China’s most popular
Group Messaging App
29

30. Sitti became the largest online ad publisher in Indonesia by
focussing on local language content 5
Vast reach in local
content
Indexed over 800 million pages of websites and
blogs with Indonesian Bhasha content
Indonesia’ most popular local
language ad serving platform
•
Indexes' local language websites
and social media conversations Huge network of local ad
publishers
Deep understanding of over 30,000 local ad
publishers
•
Enables advertisers to push ads linked to
selected contextual keywords
Targeting SMBs
Click Through Rate compared
to Google Adsense
3X • Targeting the base of 52 million local Indonesian
SMBs through awareness & education programs
30

31. Winning Strategies for Emerging Markets
1
Focus on Large Government Projects
2
Re-defining Distribution to Suit Local Needs
3
Leveraging Influencer Models to Drive IT Adoption
4
Creating Enabling Ecosystem for Market Development
5
Focus on Region Specific Deep Consumer Insights & Localization
31

32. Thank
You
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info@zinnov.com
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without prior written approval from Zinnov