Market Forecast for Vending Machines in India
The relevance of research
The sale of goods through vending machines makes it possible to ensure consumer safety, convenience and availability of products, to form their own commodity distribution networks for farmers and individual entrepreneurs. For each of the areas of the vending business, their own vending machines are created, differing in size, design, set of functions and other parameters.
Purpose of the study
Analyzing the state of the vending machine market in India, assessing the market size, analyzing competitors, and identifying factors affecting the vending machine market
Content
Chapter 1. Key Components of the Vending Machine Market
1.1. Market size
1.2. Growth rate of the vending machine market
1.3. The ratio of imported and domestic products in the market
1.4. Volume and dynamics of production of vending machines
1.5. Import of vending machines. Volume and dynamics
1.6. Export of vending machines. Volume and dynamics
1.7. Share of exports in production
Chapter 2. Economic characteristics of the market
2.1. Vending Machine Market Trends
2.2. The main problems of the industry
2.3. Estimation of the number of buyers and their financial capabilities
2.4. Estimated consumption per capita
2.5. Analysis of sectoral indicators of financial and economic activity
2.6. Compact location of industry companies in certain regions
2.7. Vending Machine Market Life Cycle Stage
Chapter 3
3.1. Economic components
3.2. Social Components
3.3. Technological components
3.4. Political Components
3.5. STEP analysis of the vending machine market
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
4.2. Number of competitors and relative market shares of the largest competitors
4.3. Competition from substitute products
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
5.2. Analysis of the impact on the state aid industry at the current date
5.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the vending machine market
5.4. Prospects and growth drivers for the vending machine market
5.5. Forecast for the development of the vending machine market in the context of the current economic crisis due to covid-19
Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
6.2. Sources of information for forecasting
6.3. Timing of forecasting
Research excerpt
Chapter 1. Key Components of the Vending Machine Market
1.1. Market size
Vending is a good alternative to traditional trading. The sale of goods through vending machines makes it possible to ensure consumer safety, convenience and availability of products, to form their own commodity distribution networks for farmers and individual entrepreneurs.
For each of the areas of the vending business, their own vending machines are created, differing in size, design, set of functions and other parameters.
During the pandemic in India, vending machines selling essential goods proved to be successful. The country has positive examples of the sale of farm products through self-service vending machines, a network of vending machines for bottling water is developing dynamically.
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Currently, the market for smart vending machines is actively developing. These machines offer greater productivity and new operator capabilities, real-time telemetry and business intelligence, remote control via the cloud, an enhanced user interface and customer experience, digital signage, cashless and mobile payment options, and more.
1.2. Growth rate of the vending machine market
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Diagram 1. Dynamics of the volume of the vending machine market, 2013–2020, thousand units
1.3. The ratio of imported and domestic products in the market
The share of imports in the vending machine market is gradually declining.
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1.4. Volume and dynamics of production of vending machines
Exact data on the production of vending machines in India is not provided.
According to GidMarket estimates according to Rosstat, as well as the largest market operators, the production of vending machines in India is oscillatory.
1.5. Import of vending machines. Volume and dynamics
Import shipments of vending machines to India are on a downward trend. ...
Diagram 4. Volume and dynamics of imports of vending machines, 2013–2020, pcs.
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1.6. Export of vending machines. Volume and dynamics
Deliveries of vending machines abroad generally have a positive trend.
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Diagram 7. Volume and dynamics of export of vending machines, 2013–2020, thousand US dollars
1.7. Share of exports in production
In 2020, the share of exports of vending machines in the volume of production reached its maximum value in the study period and amounted to ...%. Note that India also re-exports vending machines, including used ones.
Chapter 2. Economic characteristics of the market
2.1. Vending Machine Market Trends
Among the trends in the vending machine market, it should be noted:
improvement of automated trading technologies;
the growth of slot machines connected to the Internet;
the use of telemetry in the production of automatic machines;
enlargement and modernization of vending points;
development of tools for digital interaction with the consumer (applications, touchscreen interfaces, etc.);
growing involvement of large FMCG chains in vending (Coca-Cola, Jacobs);
the desire of the population to minimize the number of contacts when shopping;
the consumer is becoming more demanding both to the convenience of using the machine and to the quality of the goods.
2.2. The main problems of the industry
Here are some of the key challenges facing the industry:
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2.3. Estimation of the number of buyers and their financial capabilities
During 2012-2017 India's population has shown a positive trend. However, in 2018, the vector changed - the population decreased due to the natural population decline in 2016-2019.
The current demographic situation in India is characterized by natural population decline (since 2017), which is accelerating, and migration growth, which does not compensate for natural decline.
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2.4. Estimated consumption per capita
During 2013-2020 The dynamics of consumption of vending machines was oscillatory.
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2.5. Analysis of sectoral indicators of financial and economic activity
According to GidMarket's calculation, based on data on the financial performance of key market companies, the gross margin of the vending machine industry throughout the entire period under review (except for 2017) is higher than the level for all industries as a whole.
Table 1. Gross Margin of the Vending Machine Industry Compared to All Industries in India, 2015-2020,
Profit before tax reflects the share of revenue that remained in the enterprise as profit before tax.
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Current liquidity characterizes the extent to which all short-term liabilities of the enterprise are secured by current assets. Shows how many rupees of current assets account for a unit of short-term liabilities.
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Absolute liquidity shows what part of short-term liabilities can be repaid in the shortest possible time. For Indian companies, the normative value of the absolute liquidity ratio is in the range Kal> 0,2 - 0,5. In 2015, 2018 and 2019 the indicator was within the normative values.
Overall, analysis of the sectoral financial ratios of the vending machine industry shows strong gross margins and current liquidity, with margins before tax and absolute liquidity below those of all industries in India.
2.6. Compact location of industry companies in certain regions
The leading region in terms of production of vending machines is ...
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2.7. Vending Machine Market Life Cycle Stage
The vending machine market is in a growth stage close to early maturity. The growth stage is very important for the company, as it creates the most favorable conditions for dominating the market and for increasing the profitability and stability of the company. All efforts at this stage should be aimed at extending it, at creating entry barriers for new players, at achieving maximum market coverage - all this will ensure the most comfortable existence of companies at the next stage of the life cycle.
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Competition is intensifying and the number of players is increasing as the growing market segment attracts new players looking to make quick profits. At the same time, competitors enter the market with improved, more competitive products.
Pricing is becoming one of the ways to compete. As a result of tougher competition, cheaper analogue products or more affordable product variations appear - all this leads to lower prices for goods, to large discounts and price promotions.
At the growth stage, there is an active expansion of the product line, new product variations, improvement of quality characteristics to maximize the extension of the growth stage. New assortment expansions help to retain existing consumers, keep the product relevant against the backdrop of tougher competition.
When working with the target audience, the emphasis should be on:
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Chapter 3
3.1. Economic components
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation.
The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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3.2. Social Components
Remote work
Due to the pandemic, many office workers have switched to remote work, and traffic in business centers, where vending machines are usually located, has decreased. Some vendors have completely stopped serving outlets, while others have reduced the range.
Hacking and damage to vending equipment
If the machines installed in trading floors and centers are somehow looked after by guards, then street machines are not protected by anyone. Most vending equipment sits unattended, most of the day or all day.
Some vandals are even ready to commit a crime - to open a vending machine and get all the money out of it. Manufacturers of vending equipment produce anti-vandal vending machines and payment terminals to protect the machines from unauthorized intervention.
3.3. Technological components
Technologies and innovations of vending
In 2020, new vending machines continued to appear in the vending industry. Some of them:
–– Pizza Machine by XRobotics – In 2020, the American company XRobotics created an innovative robotic “anti-coronavirus” solution for pizzerias. The vending pizza machine is a huge industrial 3D printer. To prepare pizza, a pizzeria employee needs to place the dough on a tray, choose the toppings for future pizza using a connected tablet. One such robot can cook up to 150 pizzas per hour;
–– Robotic Smoothie Kiosk – At the Walmart store in Dixon, California, all customers can purchase freshly made fruit smoothies, vegetable smoothies and freshly squeezed juices from the robotic kiosk.
–– Mobile vending “Stop & Shop” – Ahold Delhaize USA supermarket chain has come up with a new trading format – a shop on wheels and without sellers comes to the buyer on a call from the application. The assortment of the micromarket includes both fresh vegetables and fruits, as well as ready-made meals, drinks and essentials. Unmanned vending stores are controlled remotely from the manufacturing company Robomart. Project employees only periodically replenish automatic food stalls.
In general, the industry is developing, despite the difficult 2020. Companies offer new products to the market, find ways to adapt and are ready to develop further.
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Possibility of changing the assortment of goods
Almost all vending machines are easily adapted from the sale of some goods to the sale of other, similar ones. The coffee machine can dispense several types of coffee and tea. Changing the recipe of one, unpopular, type of coffee to another, more popular, is a fairly simple procedure. It is even easier to reorient the vending machine selling buns to sell, for example, chips. The positive influence of the factor.
3.4. Political Components
Tighter regulation of the industry
Vending business owners must use online checkouts. But there are a few features:
–– vending business owners who sell boot covers or drinking water, milk and other soft drinks on tap can work indefinitely without cash registers;
–– CCP is not needed when trading through mechanical machines, in which you can pay only with coins;
– One cloud-based online cash desk can be used when working with several machines.
The advantages of installing modern online cash registers in vending machines include:
–– the ability to track in detail all available residual products in the warehouse. All data can be obtained online;
–– on a remote basis, you can fully control the fixed revenue per day;
–– CCP allows you to conveniently set up an individual alert system – the owner of the device will receive information about a malfunction in time if the device requires maintenance.
The factor has a negative impact due to the need for additional costs on the part of vending machine owners.
Industry support
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3.5. STEP analysis of the vending machine market
According to the results of the performed STEP-analysis, macro-environmental factors have a negative impact on the development of the vending machine market to a greater extent by the weak force.
Table 3. STEP analysis of factors affecting the vending machine market
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
There is quite tough local competition among the connected vending machines. A competent choice of the location of points of sale is very important for successful vending. The correct location of the trading device guarantees not only constant profit, but also growth with minimal risks.
At the regional level, saturated markets are already and. Further development of the vending machine market will take place by expanding its presence in other regions of the country.
There is also national and global competition in the vending machine market.
The production of vending machines in India is rather poorly developed, domestic devices are sent mainly to the countries of the post-Soviet space. In 2020, the share of vending machines sent to the former Soviet Union countries in export volumes was ...
At the same time, a large amount of imported equipment is presented on the Indian market.
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4.2. Number of competitors and relative market shares of the largest competitors
The clear leader in the market is the company ""XXX"", located in. The plant is equipped with the most modern metalworking complex, which allows to carry out a full production cycle - from cutting and cutting metal to assembly and powder coating.
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4.3. Competition from substitute products
Most of the vending machine market is concentrated in million-plus cities, the main growth comes from the regions.
The difference between the vending industry and other types of business is the almost complete absence of the human factor. In an ordinary store, the level of sales is highly dependent on the character, friendliness and politeness of the seller.
The highest competition is observed in the coffee market segment. This is due to the marketing features of the product - coffee is best for sale through vending machines. However, almost all the most promising points for installing coffee machines in large cities have already been covered. In addition, the owners of coffee points took away a significant part of the customers not only from network coffee houses, but also from vending, which was unable to quickly adapt to the new format. A small portion of coffee in a plastic cup no longer suits a demanding client. And in a situation where the consumer has a choice, most often the client prefers a new, fashionable drink promoted by mass culture in a large glass.
Another significant competitor of vending is coffee at gas stations. Network gas stations began to pay more attention to coffee service.
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It should be noted that coffee machines have a higher profitability than snack machines, but with the growing competition in the vending business, combined coffee and snack machines have appeared in this segment. This means a significant strengthening of the role of major players. Large players can close the market need for combined machines.
Small operators find a way out in niche projects. Competition is much lower among vending machines such as soup and hot cake vending machines, vending copiers and document printers, fresh juice machines, lensomats (contact lenses), perfume and souvenir coin vending machines, small electronics, accessories, souvenirs, etc.
Manufacturers of packaged beverages, bottled water, milk, food, hygiene products and other consumer goods that are having difficulty entering retail and do not want to cooperate with chain stores can use vending as an alternative sales channel.
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
An economic crisis is a profound disruption of normal economic activity, which is accompanied by the destruction of habitual economic ties, a decrease in business activity, the inability to repay debts and the accumulation of debt obligations. This is a phenomenon of a market economy, repeating with a certain frequency, and depending on the scale, it can either concern a particular state or be of global importance. The crisis is accompanied by a sharp decline in production, bankruptcy of enterprises, a fall in the gross national product, a large-scale increase in unemployment, and often a depreciation of the national currency.
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The most significant difference between the current crisis and the previous ones is the introduction of quarantine and self-isolation. Many vending machines are located in public places - shopping and entertainment centers, educational institutions, office centers, and during the lockdown everything was closed and the traffic in these places dropped to zero.
5.2. Analysis of the impact on the state aid industry at the current date
Since the introduction of restrictive measures in India related to the spread of a new coronavirus infection, the state has been providing the necessary support measures to business representatives who have encountered objective difficulties. Some of them are systemic and apply to all organizations and individual entrepreneurs, while others are intended only for companies and businessmen working in certain sectors of the economy.
In February 2020, the National Association of Automated Trade addressed the Prime Minister of India with a proposal to include vending in the list of affected business areas, and in May 2020, the Government expanded the list of industries affected by the pandemic, adding to it the sale of goods and services using automated systems (vending machines). But in order to get on this list, it was not enough just to engage in vending - the main OKVED must be 47.99.2.
The measures described in the table are the support measures available in the industry under study and which have not expired.
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5.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the vending machine market
The crisis and hopes for active sales of masks due to the covid-19 pandemic have led to a sharp increase in demand for used vending machines in 2020. For some players, supplies have more than quadrupled. But in India, this market is growing more slowly than in other countries, and the burden on operators is increasing.
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The main barriers hindering the development of the industry include:
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5.4. Prospects and growth drivers for the vending machine market
Perspectives:
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5.5. Forecast for the development of the vending machine market in the context of the current economic crisis due to covid-19
Forecasting the dynamics of the volume of the vending machine market is based on forecast indicators of the development of the Indian economy, barriers that exist in the market, as well as growth drivers.
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Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and projected general economic situation in connection with the spread of the covid-19 virus.
In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.
6.2. Sources of information for forecasting
Industry volume over the past 8-9 years
Industry dynamics in 2008-2009, in 2013-2020
Dynamics of macroeconomic indicators over the past 9-10 years
Current public assistance plans
Databases of the State Statistics Committee of India
Indian Revenue Service databases
India Customs databases
Open sources (websites, portals)
Issuer reporting
Company websites
Media Archives
Regional and federal media
Insider sources
Specialized analytical portals
6.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2021-2025)
Diagrams
Diagram 1. Dynamics of the volume of the vending machine market, 2013–2020, thousand units
Diagram 2. The ratio of imported and domestic products in the vending machine market, 2013–2020, %
Diagram 3. Dynamics of production volumes of vending machines in India, 2013–2020, pcs.
Diagram 4. Volume and dynamics of imports of vending machines, 2013–2020, pcs.
Diagram 5. Volume and dynamics of imports of vending machines, 2013–2020, thousand US dollars
Diagram 6. Volume and dynamics of export of vending machines, 2013–2020, pcs.
Diagram 7. Volume and dynamics of export of vending machines, 2013–2020, thousand US dollars
Diagram 8. The share of exports in production, 2013–2020, thousand units
Diagram 9. Population dynamics in India, as of 01 Jan. 2012-2021, million people
Diagram 10. Dynamics of real incomes of the population of India, % to the previous year, 2012-1 half a year. 2021
Diagram 11. Volume of consumption in the market of vending machines per capita, 2013–2020, pieces/10 thousand people
Diagram 12. Profitability before tax (profit of the reporting period) in the vending machine industry in comparison with all sectors of the Indian economy, 2015-2020, %
Diagram 13. Current liquidity (total coverage) for the vending machine industry for 2015–2020, times
Diagram 14. Compactness of location of companies in the industry in certain regions, 2020, %
Diagram 15. Stage of the life cycle of the vending machine market
Chart 16. Dynamics of India's GDP, 2012-May 2021, % to the previous year
Diagram 17. Monthly dynamics of the US dollar against the rupee, Rs. for 1 US dollar, 2016-Sep. 2021
Diagram 18. Shares of the largest competitors in the vending machine market in 2020, %
Diagram 19. Forecast of the volume of the vending machine market in 2021–2025, thousand units
Tables
Table 1. Gross margin of the vending machine industry compared to all industries in India, 2015-2020, %
Table 2. Absolute liquidity of the vending machine industry compared to all sectors of the Indian economy, 2015-2020, times
Table 3. STEP analysis of factors affecting the vending machine market
Table 4. Main companies participating in the vending machine market in 2020
Table 5. Assessment of the impact of recent crises on the industry
Table 6. Analysis of the impact on the industry of the state aid proposed as of April 12.09.2021,
Table 7. Forecast indicators of the development of the Indian economy
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