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Market analysis of garden and potted plants in India

Market analysis of garden and potted plants in India Market analysis of garden and potted plants in India
Release date 26.11.2019
Number of pages 39
Formats DOCX, PDF
Cost 250.000 ₹

The relevance of research 

Ornamental plants include all types of plants (herbaceous, shrubs, bushes and trees) that have the decorative properties of flowers, leaves, shoots. They are used to decorate parks, massifs, squares, gardens, urban and street plantings, territories of industrial enterprises and institutions, as well as private estates and other urban and rural facilities, apartments and houses.


Purpose of the study

Analyzing the state of the garden and potted plants market in India, assessing the market size, analyzing competitors, and identifying factors affecting the gardening and potted plants market


Content 

Part 1. Market Overview of Garden and Potted Plants in India

1.1. Main characteristics of the market

1.2. Assessment of factors affecting the market

1.3. Market share of imports

1.4. Dynamics of the market volume in 2016-2018 (2018 - estimated). Potential market capacity

1.5. Market structure by types of garden and potted plants

Part 2. Analysis of imports of horticultural and potted plants (HS code 0602), 2018

2.1. Recipient companies

Part 3. Major distributors of garden and potted plants

3.1. TOP-20 main distributors

Part 4. Consumption forecast until 2024

Part 5. Recommendations and conclusions


Research excerpt 

Part 1. Market Overview of Garden and Potted Plants in India

1.1. Main characteristics of the market

Ornamental plants include all types of plants (herbaceous, shrubs, bushes and trees) that have the decorative properties of flowers, leaves, shoots. They are used to decorate parks, massifs, squares, gardens, urban and street plantings, territories of industrial enterprises and institutions, as well as private estates and other urban and rural facilities, apartments and houses (houseplants). During the period of conscious development and activity of human society, especially during the colonization of individual continents, humanity took, mastered and began to use a huge variety of ornamental plants that are difficult to combine. These plants have different biology, purposes, need different care and are adapted to different climatic conditions. Therefore, to divide them into corresponding more or less homogeneous groups, there are various classifications. One of such classifications of ornamental plants is botanical, which divides all ornamental plants into the following three groups: 

  • 1. Herbaceous plants - which have herbaceous organs, do not become stiff, die off for the winter, and grow back in the spring.
  • 2. Tree-like plants - in them a stem or several stems become wooden, they successfully winter and restore further growth every spring. 
  • 3. Evergreens - these are mostly plants of a tropical climate, their leaves and needles either do not fall off at all annually, or are replaced after a few years (5-8).

In addition, when breeding them, all ornamental plants are divided into two groups: 

  • 1. open ground plants;              
  • 2. indoor plants. 

The last division of ornamental plants into two groups is considered conditional, since this division depends on the vegetation zone and climatic conditions.

According to production characteristics, all ornamental plants are divided into groups: 

  • 1. Annuals are plants that, in one growing season, go through a full cycle of their development from sown seeds to the full ripening of the same seeds in the fall of the same year. These are, first of all, flowers typical of India: marigolds, salvia, marigolds.
  • 2. Biennials are plants that require two (one and a half) growing seasons for the full cycle of their development. That is, in the first year after seed germination, a plant is formed only with a rosette of leaves, but does not bloom and does not form seeds. Such a plant successfully winters and only next year throws out a flower stalk, blooms and produces seeds. These are plants such as bluebells, mallow, foxglove, etc.
  • 3. Perennials are plants that grow in one place and bloom annually for 5-8 and 6 more years. Some of them overwinter in the open field (cockerels, lilies, tulips, daffodils, peonies). Others require digging and shelter for the winter (gladiolus, dahlias).

Plants are the backbone of a garden. The choice of planting material for a landscape designer or land owner is an important issue. A good plant will delight for many years, and poor-quality planting material can bring problems and extra costs. There are several ways to purchase planting material: from a nursery, garden centers, specialty markets, large stores, or by mail order.

The main feature of crop production in India is the variety of climatic conditions in its vast territory. The main point, experts consider the need to select a frost-resistant assortment. 

The territory of India is divided into 8 zones of frost resistance. The allocation of frost resistance zones is based on the average value of the annual minimum temperature. Snow cover may provide additional cover, but this factor is not taken into account. Zoning is approximate, since local deviations may occur in each zone. For example, in urban conditions, the climate is milder by half the zone, compared to rural areas; proximity to large bodies of water, slopes, ridges can also have a beneficial effect on the climate, and location in valleys, lowlands, highlands and areas open to cold winds has the opposite effect. 

At present, according to various statistics, there are only a few hundred nurseries in India producing fruit, berry, and ornamental crops of all forms of ownership. However, the optimal number for India, according to the general opinion of experts, is 10 thousand nurseries, taking into account the population, area, and, most importantly, the diversity of natural and climatic conditions. The shortage of high-quality Indian planting material is replenished by imported plants.

For example, in each of such countries as Holland, Belgium, Germany, there are 5000 nurseries.

1.2. Assessment of factors affecting the market

Macroeconomic factors affect the dynamics of all sectors of the Indian economy, including the considered market for garden and potted plants. The main groups of factors are: economic, political, social and technological.

  • Economic

GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.

...

The sharp deterioration of the financial situation in the country in 2015-2016 had a negative impact on both consumers and producers. The fall in the purchasing power of the rupee led to a decline in retail sales. 

...

Diagram 3. Dynamics of retail trade turnover, 2013 - 2019 (Q1), % to the previous year

  • Demographic (social)

During 2010-2018, there is an increase in the population. 

General trends in macroeconomic indicators can also be traced in such a value as real incomes of the population, which determine the level of effective demand. 

...

Urbanization. During 2014-2019, urbanization is taking place - the number of urban residents is increasing, while since 2015 the population of rural settlements has been decreasing. There is a shortage of ornamental plants in cities. The growth of cities, the deteriorating ecological situation, the increasing psycho-emotional stress require an increase in the area of ​​green spaces for each city dweller.

...

  • technological

Agriculture is one of the few sectors of the Indian economy that showed growth during the crisis. According to Rosstat, for the period from 2013 to 2017, the index of agricultural production for all categories of farms in India had an increase compared to the previous year. 

Like many horticultural markets, the market for horticultural and potted plants is highly seasonal. This is due, first of all, to the periods of planting garden plants. 

Diagram 7. Monthly dynamics of imports of horticultural and potted plants to India in 2018, million dollars

The seasonality of the market for garden and potted plants in India is clearly illustrated by the monthly dynamics of imports. The peak volumes of imports to India fall on February-April (before the spring planting of seedlings in the ground), the smallest values ​​of import volumes occur in October-December, when the autumn planting of plants ends. Import volumes in the winter period are carried out by purchasing potted plants.

As with many horticultural markets, the horticultural market is a significant geographic factor. The geographical conditions of various federal districts for planting will have a multidirectional effect. 

Individual climatic phenomena are possible, which are in the nature of force majeure: the death of plants due to icing, flooding, loss due to return frosts.

At the same time, a wide variety of assortment, many years of experience in growing various types of flowers, bushes in India make it possible to minimize the negative impact of individual climatic factors by selecting special varieties and using cultivation methods, focusing on the experience of growing in similar areas. In addition, it is possible to improve the geographical conditions within the framework of a specific project by additional irrigation, the use of anti-hail shelters, the introduction of nutrients that are deficient in the soil, etc.

  • Political

The tense political situation in interstate relations has a negative impact on all spheres of the Indian economy. The main activities of the state and the strategic tasks at present are the development of new models of cooperation with the US and the EU and the approval of India in the world monetary system. Anti-India sanctions and the generally sharp deterioration in relations between Western countries and India largely determine India's foreign policy.

Credit policy. Today it is quite difficult to imagine the progressive development of the economy without the active participation of the credit system. It should also be noted that the assessment of the availability of credit resources for both legal entities and individuals is a significant indicator that allows assessing not only the demand for credit funds, but can also serve as a reflection of the real economic situation both in the region and in the economy as a whole. 

...

The development strategy establishes a mechanism for actions aimed at increasing the guarantee support of states for small and medium-sized businesses and improving business lending conditions, and also defines technologies, target client segments, geographic and industry boundaries, and promising opportunities for the national guarantee system. The positive influence of the factor. 

State regulation and legislation. 

...

Table 4. STEP analysis of factors affecting the horticultural and potted plants market

In aggregate, the influence of macro factors on the market of garden and potted plants can be assessed as neutral, that is, negative and positive factors have approximately the same impact. The decline in real incomes of the population, population dynamics, rising prices for fuel and electricity, the appreciation of the dollar and euro, tense foreign policy situation, and seasonality have a negative impact. Credit policy, GDP growth, retail trade, government regulation, the dynamics of agricultural production, and urbanization have a positive impact.

1.3. Market share of imports

During the review period from 2016 to 2018, the Indian market for horticultural and potted plants was dominated by imported products. According to the experts of the https://www.greeninfo.ru portal, the flow of planting material from abroad to India is so great that the country has already taken 1-2 place among buyers in terms of purchases. In the Indian market, the share of Western plants now significantly exceeds the amount of domestic planting material. 

1.4. Dynamics of the market volume in 2016-2018 (2018 - estimated). Potential market capacity

Consider the dynamics of the market components (production, imports, exports) and the size of the market for garden and potted plants in India.

Diagram 10. Dynamics of production of garden and potted plants in India in 2016-2018, million Rs.

The dynamics of the production of garden and potted plants in India is linear in 2016-2018. The indicator is growing steadily every year both due to an increase in production in physical terms, and due to an increase in prices (inflation). 

  • The dynamics of imports of garden and potted plants in India in rupees is undulating.
  • ...
  • The dynamics of exports of horticultural and potted plants from India is oscillatory. 
  • ...
  • The dynamics of the volume of the market for garden and potted plants in India is undulating. 

In recent years, the growth of the market for garden and potted plants in India was held back by the impact of the crisis, the decrease in the purchasing power of the national currency (which affected both the demand of the population and the demand of organizations for plants). The geographical factor also significantly affects the market capacity - a significant part of the territory of Russia is located in the zone of risky farming. 

1.5. Market structure by types of garden and potted plants

Unfortunately, in India, in the OKVED2 activity classification, only one general code is provided for the work of enterprises engaged in the production of horticultural and potted plants: (01.30) Growing seedlings. There are no data on the structure and volumes of plant production by species in the sources of official statistics. 

Since in the Indian market of garden and potted plants, on average, almost two-thirds of the volume is imported, it will be quite indicative to determine the structure of the market based on a positional analysis of the operations of importing products into the country.

In 2018, the Indian market was dominated by value for indoor horticultural and potted plants... 

It should be noted that it is extremely difficult to calculate the structure of the market by plant species due to the fact that the sources of official statistics in India do not classify garden and potted plants grown in the country. And import deliveries are often complex purchases, including many species and names of plants specified in one customs declaration without specifying the cost and quantity for each individual item. 

Part 2. Analysis of imports of horticultural and potted plants (HS code 0602), 2018

Consider the structure of imports to India of horticultural and potted plants by sending countries:

Chart 16. Structure of imports by sending countries in 2018, %

Top exporting countries for imports of horticultural and potted plants to India in 2018 were: 

...

2.1. Recipient companies 

Table 5 and Chart 18 show companies that were recipients of garden and potted plants in 2018. The companies in the table are arranged in descending order of the volume of imported products in value terms.

It should be noted that with the countries of the Customs Union (Belarus, Kazakhstan, Kyrgyzstan and Armenia), item-by-item accounting of foreign trade transactions and accounting for recipient companies is not kept, therefore, the table shows only the volumes of deliveries from countries that are not members of the Customs Union.

The diagram shows companies receiving products with shares of at least 1% in the total volume of imports from countries outside the Customs Union. 

...

Part 3. Major distributors of garden and potted plants

3.1. TOP-20 major distributors

The table contains 30 companies, of which: 

  • 11 companies with a share in imports from countries outside the Customs Union, more than 1%. At the same time, many     
  • leading companies among the recipients of imported goods were not included in this list due to the lack of information about them: the company's website, description of activities and assortment.
  • 5 large companies engaged in landscaping and landscaping, landscape design.
  • 14 companies engaged in wholesale and retail trade in plants and flowers with revenue in 2018 of more than ... million Rs. At the same time, some of them were not importers of plants, therefore, they probably made purchases from other legal entities. 

...

Part 4. Consumption forecast until 2024

We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.

The further development of the market for garden and potted plants in India will largely depend on the general economic condition of the state.

Part 5. Recommendations and conclusions

Demand for planting material (including garden and potted plants) was determined by three main factors: the growth of cottage housing construction, the fashion for ornamental plants in summer cottages, and trends in the urban gardening market.

The dynamics of the volume of the market for garden and potted plants in India is undulating. 

...

The following is also recommended:

...


Diagrams

Diagram 1. Dynamics of India's GDP, in 2011-2019 (1pg.), % to the previous year

Chart 2. Monthly dynamics of the US dollar against the rupee, 2014-2018, Rs. for 1 US dollar

Diagram 3. Dynamics of retail trade turnover, 2013 - 2019 (Q1), % to the previous year

Diagram 4. Population dynamics in India, 2010-2019, million people, %

Chart 5. Dynamics of real incomes of the population of India, 2011 - 2019 (Q1 and Q2), % to the previous year

Diagram 6. Index of agricultural production for all categories of farms in India, 2013-2018, % to the previous year, in comparable prices

Diagram 7. Monthly dynamics of imports of horticultural and potted plants to India in 2018, million dollars

Chart 8. Dynamics of the average interest rate on loans, 2014-2019 (January-May), %

Diagram 9. The ratio of imported and Indian products in the market of garden and potted plants in 2016-2018,%

Diagram 10. Dynamics of production of garden and potted plants in India in 2016-2018, million Rs.

Diagram 11. Dynamics of imports of garden and potted plants to India in 2016-2018, million Rs.

Diagram 12. Dynamics of exports of garden and potted plants from India in 2016-2018, million Rs.

Diagram 13. Dynamics of the market volume of garden and potted plants in India in 2014 - 2018, million Rs.

Diagram 14. The structure of the market of garden and potted plants in 2018 by types of soil for planting,%

Diagram 15. Market structure of garden and potted plants in 2018 by types of plants, %

Chart 16. Structure of imports by sending countries in 2018, %

Chart 17. Structure of imports by countries of origin in 2018, %

Diagram 18. Shares of the largest companies receiving garden and potted plants in 2018, %

Diagram 19. Forecast of the volume of the garden and potted plants market in India in 2019 - 2024, million Rs.


Tables

Table 1. Average producer prices for certain types of industrial goods in India at the end of the period in 2014-2018, rupees per unit of measurement

Table 2. Urban and rural population in India in 2014-2019, million people, %

Table 3. Weighted average interest rates of credit institutions on credit operations in rupees (% per annum), 2014-2019 (Jan-May)

Table 4. STEP analysis of factors affecting the horticultural and potted plants market

Table 5. Companies receiving garden and potted plants in 2018, %

Table 6. Main distributors of the horticultural and potted plants market

 


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