For over 20 years, CMIE has computed `market shares' of the companies who compete in a certain product. They have also computed the Herfindahl index of concentration. This data is valuable in obtaining a snapshot of what is happening in an industry. But more interesting, this data goes back to 1990-91, and thus constitutes a valuable historical series using which we can obtain insights into individual industries and the economy.
I often get asked how this information base can be accessed, other than by going through print documents over the years. Here are the steps through which you can get data on markets shares, and the time-series of the Herfindahl index of concentration from 1990-91 onwards, for all industries:
- Use the CMIE website http://www.business-beacon.com. This is a pay-per-use site. You can create an account to use this over the net.
- Start at the tree-structured industry classification.
- Pick an industry of interest: e.g. Tea.
- Click on Market shares.
- To go further, you need to have a prefunded account.
- Click on Market share of companies. At this point, you are charged Rs.100. This shows the market share of each company in the paper business. The last row (at the bottom) shows the Herfindahl index. This has been around 0.06 in recent years -- suggesting very little market power.
- At the right hand top, there is access to a spreadsheet where there is a full time-series for the market share of all Tea companies, going back to 1990-91. At this point, you are charged Rs.250. This spreadsheet has the bottom row with the time-series of the Herfindahl index.
Sometimes, an industry (e.g. Two/Three Wheelers) contains market shares data for several sub-components. In this case, the sub-components are accessible from the bottom of the market shares page. Here is an example, for the Two/Three Wheelers industry, where the market shares information defaults to motorcycles (the most important sub-component), but the other sub-components are available by looking below the list of reports.