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Organised events industry to reach Rs 5,779 cr by 2016-17: EY-EEMA report

As per the report, the events and activations industry has reportedly grown at 15% annually, from Rs 2,800 crore in 2011-12 to Rs 4,258 crore in 2014-15

BestMediaInfo Bureau | Mumbai | April 8, 2015

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The events and activations industry has grown at 15 per cent annually from Rs 2,800 crore in 2011-12 to Rs 4,258 crore in 2014-15, according to an EY - EEMA (Event and Entertainment Management Association) report, titled ‘Making experiences in India: The events and activations industry’. The report states that while managed events remain the largest service offering, IP (Intellectual Property) and digital events are growing at a faster rate than managed events.

The report added that the key strength of the industry remains its ability to get things done, and the ideation and efficiency with which it operates. That said, there is a need for the industry to work on acquiring the right talent, managing costs, demonstrating ROI to marketers and increasing transparency in operations.

The report indicates that margins are expected to decline from an average of 16 per cent to 13 per cent over the next two years mainly due to a growth in overall costs by 12 per cent, and more particularly a rise in payroll costs by 15 per cent, as companies expect to increase their average headcount from 84 to 104 employees.

Ashish Pherwani, Partner and Media & Entertainment Advisory Leader, EY India, remarked, “The events and activations industry holds great potential, and this is evident from the considerable growth that the industry witnessed over the last few years. Our report aims to provide insights around key strengths of the industry and the challenges it faces. The report also looks into the opportunities for M&A transactions, implications around taxation and corporate governance.”

Commenting on the report, Sabbas Joseph, President, Event and Entertainment Management Association, said, “With a new Government at the helm, there is a growing interest in the culture and people. The events and activations industry is best poised to capitalise on this opportunity and there is a crying need for a new world order – one in which event companies work along with the Government to create an events calendar that drives tourism and related industries.”

According to the report, the events and activations industry is expected to grow to Rs 5,779 crore by 2016-17. This growth will be on the back of marketers increasing their below the line (including digital) spends to 21 per cent of their total marketing spends. The growth will also be led by personal events, MICE (meetings, incentives, conferences and exhibitions), activations and sports.

Non-metro markets are expected to increase in importance as marketers look to tier II and tier III cities for incremental growth, states the report. Digital events and activation is also expected to grow significantly on the back of smart phone penetration, internet availability and the cost efficiency of such campaigns for marketers.

While the industry has reported very few M&A transactions over the last few years, there exists scope for consolidation. Valuations are driven by IPs owned, advertising agencies’ interest in activations, and digital events and sports leagues. On the taxation front, double taxation, taxation across multiple states, and varying and inconsistent application of different taxes are some of the challenges faced by the industry. Also, the introduction of Goods and Services tax could have a significant impact on the industry in terms of rates and implementation across multi-state activities.

The report also states that the introduction of the new Companies Act, 2013, will result in some key changes in internal financial controls, compliance with more than 60 acts and regulations, and implementing a vigil mechanism to identify undesirable activities.

The report is based on the findings of a survey conducted via extensive discussion with over 60 respondents including the heads of events and activation companies across the country, along with inputs from advertisers and sponsors.

View the complete report here:

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