Wednesday, August 8, 2012

Wedding Industry in India

Introduction
Marriages in India are considered a sacred occasion and date of marriage is usually decided on the advice of pundits, whose identifies the auspicious day from Hindu calendar. So, the wedding industry is a seasonal in nature, blooming only during the auspicious months, which normally fall during the period of october to may. As the event takes place once in a life time of individual, it is regarded as one of the important day in individual’s life. Thereby, it encourages people to make it grand and spend to their heart-content for marriage.
With increasing spending on such occasion and demand to make the event a unique and a memorable one, the demand for wedding planner has risen. Also, the importance of wedding planner has scaled up, as spending on wedding is normally associated with social status. The wedding planner provides wide range of services, some of them includes venue selection and decoration, guest accommodation and gifting, dress and jewellery planning, make-up services, food, flower arrangement and photography and video making. The wedding planner services are further extended to include planning honeymoon for newly wedded couples. 
The average Indian spends around Rs. 1.5 – 15 million for their wedding, which makes the estimated total size of Indian wedding industry of Rs. 1.9 trillion. It is expected that the industry will continue to grow at rate of 25% per annum.
Drivers
The major factors driving wedding industry thereby proving boon to wedding planner are:
·      Demographic Profile:
In 2011, India had a population of 1.21 billion, and with average family size of five members, there are around 242 million families in India. Considering one marriage per family every 20 years, on average India has around 10 million marriages per year. Also, the estimated median age in India as of 2011 is 26.2 years, signifying a large proportion of population in marriage age group.

·      Rising middle class:
Higher proportion of young population and more women entering the workforce has given rise to higher disposal income and growing middle class segment.  In 2011, 160 million people belonged to middle class category, and are expected to increase to 267 million by 2015-16. High proportion of disposal income will encourage population to spend generous for the specials occasion.

·      Time Constraint and Convenience
To make a wedding grant affair, it required detailed planning and execution. With fast paced and competitive professional life, people are busy with their work schedule and it becomes difficult for them to devote quality time in planning the event. This has encouraged the growth of wedding planner. Also, outsourcing the work to planner relives bride’s parents of minute arrangement and allows them to enjoy the occasion.

·      Availability of Wedding loan and wedding Insurance:
Many banks and financial institution have started lending marriage loan to ensure hassle free wedding experience. Also, increase in disposable income has encouraged newlywed to opt for wedding loan and make wedding a grand event.  This attitude to make the wedding event grand increases the total wedding cost. With high financial stakes, the couples or their families, opt to buy marriage insurance that take care of contingencies during marriage like cancellation / postponement due to fire or natural disaster, accident of bride/groom or burglary.

·      Social Status:
As the amount spent on wedding is related to individual’s social status, elite class consider this wedding occasion as an opportunity to showcase their wealth. Moreover, the middle class people save portion of their earning throughout their life for their children’s wedding.  This enables them to spend extravagantly for the celebration. With savings ear-marked for wedding, the spend-out on wedding day is not affected by economic downturn, making the wedding industry recession – proof.

Challenges
The wedding Industry also faces some challenges:
·      Fewer auspicious days:
As marriages are arranged only on auspicious days, as Hindus place a lot of emphasis on astrology, the industry faces seasonal revenue.  In case of unfavourable planetary combination as per astrology, marriages are postponed. This acts as a barrier for the growth of wedding planner. Furthermore, as large number of marriages across country takes place on few selected dates, this give rise to the possibility that wedding planner may not be able to capture additional market share.

·      Wedding planning online software
Many web based software are available to plan wedding. The software provides assistance to manage guest lists, send invites, create event checklists, and manage vendors and expenses. Some of the software also provide 3D graphic to provide more clarity and give real feel of the event. In addition, some of the online services also cater wedding planning need by providing list of wedding hall, caterers, florists, decorators, make-up artists, and musicians.

·      Service tax or Vat:
The service tax is applicable on services rendered by wedding planner. It is also applicable on other related activities like catering, decoration, flowers. This additional burden in nature of service tax may act as a setback for the planner.

Influencing on other Industry
As many rituals and events are organised to make wedding a grand event, Wedding industry also influences growth in other industry: 
Printing Industry:
There is increasing demand for elegantly designed wedding cards. Moreover, the elaborate wedding invite usually has three to four add-on cards along with the main card. A wide variety of options are available with respect to card paper type and quality, shapes and size, and decoration theme. This makes the wedding card market worth in range of Rs. 80-100 billion, for 10 million annual marriages. On an average, an Indian family spends close to Rs 20,000-Rs 30,000 on invitation cards for a wedding that costs Rs 1.5 million.
Gems and jewellery:
An average middle –class Indian will save for their child’s marriage right from the time of child’s birth, and spent an average of 30-40 grams of gold in marriage, thereby increasing the total consumption of gold to about 400 tonnes annually. Thus, the Indian gold jewellery sector, which accounts for 61% of total domestic gold demand in 2011, is mainly led by wedding –related demand. 
Tourism Industry:
Tourism industry has gained lot of momentum with emergence of concept of destination wedding. The demand for destination wedding is driven by individual’s urge to have something unique for its wedding. This is supported by favourable packages offered by resorts and hotels to attract crowd to organise wedding at distant location. In addition, increasing disposable income have encouraged newlywed to plan their honeymoon to exotic places, thereby favouring tourism industry.
Outlook
As wedding planner industry caters to all variety of customer’s requirements, they have opportunity to serve large and growing population both elite and middle class. Also, the increasing insistence among Indians for flourishing marriage, the demand for wedding planner is expected to increase. The huge and every increasing population of India and majority of them opting to be married, will continuously create demand for wedding planner and other industry associated with wedding occasion. The attitude of Indians to save for future and rising disposal income will keep wedding planning industry flourishing.

References
1.    Census 2011
2.    www.indianretail.com – “The flourishing Indian wedding industry”, June 2010
3.    Red Herring Prospectus - Tribhovandas Bhimji Zaveri Limited and Olympic Cards Limited
4.    The Economics Times – “Wedding insurance: Insure your big day”, April 2011