The events and activation industry is poised to grow at 25% over the next two years to reach INR 4,375 crore in 2013 – 14.
The report is a culmination of extensive research involving detailed discussions with owners of events and activation companies across the country and captures emerging trends and issues based on these discussions, the risks faced by these companies, the M&A opportunities and the tax implications affecting the industry.
Based on a survey of 32 CEOs of Indian event management companies and our analysis of the same, the key features of the industry are:
- Healthy growth rate: The organized portion of the Indian events and activation industry is estimated at around INR2,800 crore in 2011-12. The industry has grown at over 20% during the last two years and is expected to grow to INR4,375 crore by 2013-14.
- Managed Events remains the core service: Indian event companies offer three key services:
- Intellectual Properties (IPs)
- Managed events
- Activations/Promotional campaigns
While managed events and activations form the core services provided, IPs have been developed and exploited by only a few companies.
However, going forward, industry leaders are of the opinion that growth will be driven by development of IP around:
- Sports, which is at a nascent stage in India
- Digital activation, which is becoming an integral part of all B2C properties, and
- Properties which target rural audiences, following the increased spends marketers are undertaking in tier-II and tier-III cities.
Most respondents believed that the ability to get things done, in terms of conceptualizing, managing and executing events, under any circumstances was the key strength of the Indian events industry. Delivery of high quality events despite regulatory hurdles, poor infrastructure, inadequate talent base, large geographic spread and a not-very-quality-conscious vendor base was almost a pre-requisite for business success.
Ideation and creativity, and the ability of the industry to deliver cost-efficient event solutions were also noted as key strengths. Most respondents believed that Indian events and activation companies are quite proficient at delivering quality events even when they face budgetary constraints.
Most respondents felt that the availability of talent and the overall transparency of the industry were areas that needed improvement.
Indian events and activation companies face several operational and other challenges. These are:
Onerous regulations – Most respondents believed that regulatory hurdles, such as varying taxes and numerous permissions, remain the key challenge in organizing and managing events.
Lack of trained manpower — In terms of work skills, the current employee base does not fare well on the expectations of most events and activation companies as they believe that most of the employee pool is not talented enough to meet the needs of this sector.
Obtaining sponsorships – Another key challenge that is faced by the industry has been that of obtaining sponsorships for their events. This issue is closely related to the industry’s efforts to demonstrate return on investment (RoI) for their events.
Inadequate infrastructure – Most industry leaders are concerned that this factor has impacted their profitability because of lack of supporting infrastructure such as proper event venues, hotel room availability, technology service providers, air transport network, etc.
Most respondents felt that the industry had managed the issues of procurement costs, safety and event quality control better.