PRESENTATION ON RETAIL PRESENTATION ON RETAIL INDUSTRYINDUSTRY

Presented by: Presented by: Anshu Sweta (JU07030)Anshu Sweta (JU07030)

Abhishek Kumar (JU07006)Abhishek Kumar (JU07006)Ashish Kumar (JU07039)Ashish Kumar (JU07039) Ajeet Ranjan (JU07011)Ajeet Ranjan (JU07011)

INDIAN RETAIL LANDSCAPEINDIAN RETAIL LANDSCAPE

FORMATS OF INDIAN RETAILFORMATS OF INDIAN RETAIL

TYPES OF RETAILTYPES OF RETAIL

International Retail: At a GlanceInternational Retail: At a Glance One of the world’s largest industry One of the world’s largest industry

exceeding US $ 9 trillionexceeding US $ 9 trillion

47 Global Fortune 500 companies & 47 Global Fortune 500 companies &

25 Asia's Top 200 companies are 25 Asia's Top 200 companies are

retailersretailers

Dominated by developed countries.Dominated by developed countries.

US, EU & Japan constitutes 80% of US, EU & Japan constitutes 80% of

world retail salesworld retail sales

Biggest player in India, Pantaloon’s Biggest player in India, Pantaloon’s

total group sales is about equal to 2 total group sales is about equal to 2

Wal-Mart super centers annual Wal-Mart super centers annual

revenuesrevenues

38%

27%

13%

8%3% 2% 9%

USA EU Japan China

India Russia Others

Share of Organized RetailShare of Organized Retail

Percentage of Organized Retail

85 81

5540 36 30

20 204.6

0

20

40

60

80

100

US

A

Taiw

an

Mala

ysia

Thaila

nd

Bra

zil

Indonesia

Pola

nd

Chin

a

India

Key PlayersKey Players

Highly evolved US market has Wal-Mart taking only 8% market share Highly evolved US market has Wal-Mart taking only 8% market share UK market has Tesco with only 13.4% market shareUK market has Tesco with only 13.4% market share China market still does not have a clear leader China market still does not have a clear leader

USA = US$ 2,350 Bn UK = US$ 406 Bn China = US$ 313 Bn

International LearningInternational Learning Total retail contribution in World GDP is 27%Total retail contribution in World GDP is 27%

Organized retail in US accounts for 22% of GDP Organized retail in US accounts for 22% of GDP

Share of organized retail in developing markets Share of organized retail in developing markets ranges between 20% to 55%ranges between 20% to 55%

Retail markets are organizing faster Retail markets are organizing faster

In developed markets, dominant player (Wal-Mart In developed markets, dominant player (Wal-Mart in US, Tesco in UK) has a significantly higher in US, Tesco in UK) has a significantly higher share; enjoying up to 8-13% market shareshare; enjoying up to 8-13% market share

Departmental stores growth is declining while ‘All-Departmental stores growth is declining while ‘All-under-one-roof’ & ‘neighborhood’ convenience is under-one-roof’ & ‘neighborhood’ convenience is gaining strengthgaining strength

Retail Landscape in IndiaRetail Landscape in India Indian Retail - dominated by unorganized sectorIndian Retail - dominated by unorganized sector

Approximately 2 million Mom and Pop ShopsApproximately 2 million Mom and Pop Shops

Share of organized retail sector is only 4.6%Share of organized retail sector is only 4.6%

FDI in the retail sector not permitted to protect FDI in the retail sector not permitted to protect

local retailers (excepting for single brand & cash local retailers (excepting for single brand & cash

and carry formats. In this FDI is 51%.) and carry formats. In this FDI is 51%.)

Indian retail sector is one of the least Indian retail sector is one of the least

concentrated in the world. concentrated in the world.

The top five companies hold a combined market The top five companies hold a combined market

share of less than 2%share of less than 2%

India is third largest market in Asia and Oceania, India is third largest market in Asia and Oceania,

behind Japan and China. behind Japan and China.

Retail consumption by Retail consumption by categoriescategories

Indian retail is dominated by food & grocery which contributes > 65% of Rs 9.3t retail market, almost 99% of this is dominated by kirana stores.

In Rs 00 crores

APPAREL SECTORAPPAREL SECTOR

In India, clothing retail accounts for 36% of organised retail business. According to a report global apparel, accessories & luxuries market is likely to grow by 4.5% annually and Asia Pacific region is anticipated to acquire leadership position by 2011. Apparel sector in India poses a lot of challenges to a marketer. So far India’s share in world apparel trade has been insignificant (less than 3%). World garment trade is estimated at around 195 Billion US$ annually. The Biggest manufacturer & supplier is China producing over 50 billion $, followed by Mexico which produces over 8 billion and followed by many countries like India, Sri Lanka and Bangladesh, being the third place countries making and exporting garments worth 5 - 6 billion $ annually.

Key players in Apparel RetailKey players in Apparel RetailStore nameStore name PantaloonPantaloon Mega-Mega-

martmartLifestyleLifestyle WestsideWestside Wills Wills

LifestyleLifestyleMaxMax

PositioningPositioning Family Family storestore

Value for Value for moneymoney

Value pricingValue pricing Style & Style & affordabilityaffordability

Enjoying Enjoying the change the change

Family Family Shopping Shopping DestinationDestination

Format Format TypeType

MultibrandMultibrand Ex. Ex. Arvind Arvind MillsMills

MultibrandMultibrand Ex. Tata Ex. Tata trent gr.trent gr.

Ex. ITCEx. ITC MultibrandMultibrand

Floor sizeFloor size 28000sq.ft.28000sq.ft. 5000sq. 5000sq. Ft.Ft.

50000sq. Ft.50000sq. Ft. 15000-15000-30000sq. 30000sq. Ft.Ft.

LocationLocation C.G.road,C.G.road,

AhmedabaAhmedabadd

Drive Drive road road AhmedabAhmedabadad

Satellite Satellite road,Ahmedabroad,Ahmedabadad

C.G.roadC.G.road

AhmedabadAhmedabad

C.G.road,C.G.road,

AhmedabadAhmedabad

Gallops Gallops mall, mall, AhmedabadAhmedabad

CategoriesCategories Apparel, Apparel, accessorieaccessoriess

Apparel, Apparel, furnishinfurnishingg

Apparel, Apparel, accessoriesaccessories

Styled Styled clothingclothing

Relaxed Relaxed wear, body wear, body care care productproduct

Footwear, Footwear, accessoriesaccessories

Key players in electronic retailKey players in electronic retail

Future group- ezoneFuture group- ezone Tata- cromaTata- croma

TATA CROMATATA CROMA

Croma is owned and run by Infiniti Retail Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons. Limited, a 100% subsidiary of Tata Sons. Woolworths Ltd, the Australian retail giant, Woolworths Ltd, the Australian retail giant, provides technical support and strategic provides technical support and strategic sourcing facilities from its global network.sourcing facilities from its global network.

Infiniti Retail LimitedInfiniti Retail Limited , is a 100% subsidiary of Tata Sons Ltd., promoted to , is a 100% subsidiary of Tata Sons Ltd., promoted to operate in the promising consumer electronics retail market that is evolving in operate in the promising consumer electronics retail market that is evolving in India. India.

Infiniti Retail,Infiniti Retail, has entered into a technical and sourcing agreement with an has entered into a technical and sourcing agreement with an Australian retail giant, Australian retail giant, Woolworths LtdWoolworths Ltd., which currently operates more than ., which currently operates more than 2000 stores across Australia in 12 different formats, including consumer 2000 stores across Australia in 12 different formats, including consumer electronics retailing. electronics retailing. Infiniti Retail Ltd.,Infiniti Retail Ltd., will own and run the retail operations in will own and run the retail operations in India, while Woolworths will provide technical support and strategic sourcing India, while Woolworths will provide technical support and strategic sourcing facilities from its global network.facilities from its global network.

Infiniti RetailInfiniti Retail has announced its plans to operate a national chain of multi has announced its plans to operate a national chain of multi brand outlets of consumer electronics and durables, under the brand name brand outlets of consumer electronics and durables, under the brand name ‘CROMA’‘CROMA’. These electronics mega stores, will offer the country’s widest range . These electronics mega stores, will offer the country’s widest range of consumer electronics products across categories and brands. W ith more of consumer electronics products across categories and brands. W ith more than 6000 products, 180 brands and 8 categories – Home Entertainment, Small than 6000 products, 180 brands and 8 categories – Home Entertainment, Small Appliances, White Goods, Computers, Communication, Music, Imaging and Appliances, White Goods, Computers, Communication, Music, Imaging and Gaming software - the stores will be spread over 15000 to 20000 sq.ft.Gaming software - the stores will be spread over 15000 to 20000 sq.ft.

The first The first ‘Croma’ ‘Croma’ store was inaugurated on 9th store was inaugurated on 9th October 2006, in a suburb of Mumbai, Juhu. October 2006, in a suburb of Mumbai, Juhu. Croma is now also at Malad in Mumbai and has Croma is now also at Malad in Mumbai and has opened it doors in Ahmedabad too. Infiniti Retail opened it doors in Ahmedabad too. Infiniti Retail Limited plans to launch 30 such large format Limited plans to launch 30 such large format stores across the country by 2008. stores across the country by 2008. Infiniti Retail Infiniti Retail has ambitious plans to expand across India with at has ambitious plans to expand across India with at least 100 stores by 2010.least 100 stores by 2010.

With the philosophy of With the philosophy of ‘We help you buy’‘We help you buy’, this , this high tech store promises to provide world class high tech store promises to provide world class service through a team of highly qualified and service through a team of highly qualified and trained staff, the best product range in India to trained staff, the best product range in India to choose from and great prices on a consistent choose from and great prices on a consistent basis. basis.

Big players in retailBig players in retail

Future group- big bazaar, food bazaar, Future group- big bazaar, food bazaar, pantaloons etc.pantaloons etc.

Reliance retail- marks & spencerReliance retail- marks & spencer RPG group- spencerRPG group- spencer Bharti-walmartBharti-walmart Tata tesco- star bazaarTata tesco- star bazaar

Small players in retailSmall players in retail

Parsvnath retailParsvnath retail Subhiksha retailSubhiksha retail Vishal mega mart retailVishal mega mart retail Shoppers’ stopShoppers’ stop

Organized Retail in IndiaOrganized Retail in India

The share of organized retail in total retail pie is set to increase from about 3% to 8 – 10 % by 2010.

wateches, 2.70%

jewellery, 2.90%

footwear, 9.90%

consumer durables, 9.10%

mobiles & accessories,

3.40%

pharmaceuticals, 2%

furnishings, utensils&

ferniture, 6.40%

health &beautycare,

0.80%

food & grocery, 11.50%out of home food, 7.30%

leisure, 2.80%

entertainment, 3.10%

clothing & fashion

accessories, 38.10%

Organized retail pie 2007 Market size Rs.78300 cr.

Types of retail marketTypes of retail market

Hyper market- more than 75000 square Hyper market- more than 75000 square feetfeet

Super market- less than 75000 square Super market- less than 75000 square feetfeet

Neighborhood store- 3500 to 5000 Neighborhood store- 3500 to 5000 square feetsquare feet

Kirana storeKirana store

Key TrendsKey Trends Existing players expanding to smaller townsExisting players expanding to smaller towns

– Number of existing players like Big Bazaar, Shopper’s Number of existing players like Big Bazaar, Shopper’s Stop, Piramyd are planning expansion in smaller citiesStop, Piramyd are planning expansion in smaller cities

Indian business houses in retailIndian business houses in retail– Many business houses are planning retail entry / Many business houses are planning retail entry /

expansion either on their own or through partnershipsexpansion either on their own or through partnerships

Global Players planning entry in IndiaGlobal Players planning entry in India– Some of world’s largest retailers - evaluating entry in Some of world’s largest retailers - evaluating entry in

India including Wal-Mart, Carrefour,Tesco, IKEA, Best India including Wal-Mart, Carrefour,Tesco, IKEA, Best Buy, Lowe's, Kingfisher Group, Auchan, Woolworth, Buy, Lowe's, Kingfisher Group, Auchan, Woolworth, NTUC etc.NTUC etc.

– Shop Rite, Metro, Marks & Spencers, & Spar are already Shop Rite, Metro, Marks & Spencers, & Spar are already herehere

– Some have setup Sourcing / Back-office centers e.g. Some have setup Sourcing / Back-office centers e.g. Tesco, Wal-Mart, etc.Tesco, Wal-Mart, etc.

Rural opportunity - becoming interesting for Rural opportunity - becoming interesting for organized retailersorganized retailers

Current Retail Growth Current Retail Growth ProjectionsProjections

943990

10401092

11461203

1264

28

35

44

55

68

85

107

0

200

400

600

800

1000

1200

1400

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Rs '000 C

r

0

20

40

60

80

100

120

Rs '000 C

r

Total Retailing Market ( Rs '000 Cr) Organized Retailing (Rs '000 Cr)

Indian retail industry ~ Rs 990,037 Cr (USD 300 bn), growing at 5-6% p.a.Indian retail industry ~ Rs 990,037 Cr (USD 300 bn), growing at 5-6% p.a. Organised retail industry ~ Rs 35,000 Cr (USD 7.7 bn), growing at 25-30% p.a.Organised retail industry ~ Rs 35,000 Cr (USD 7.7 bn), growing at 25-30% p.a.

Gaps in Current Organized RetailGaps in Current Organized Retail Lack of right formats catering to needs especially Lack of right formats catering to needs especially

“All Under One Roof” formats“All Under One Roof” formats

Absence of single trusted player with pan-India Absence of single trusted player with pan-India

presencepresence

No investment in supply-chain infrastructure. No investment in supply-chain infrastructure.

Sole focus on front-end with minimal back-end Sole focus on front-end with minimal back-end

linkages (DC, logistics, cold chain, vendor & linkages (DC, logistics, cold chain, vendor &

farmer development, etc.)farmer development, etc.)

Inconsistent availability, quality & pricingInconsistent availability, quality & pricing

Transactional approach, minimal focus on Transactional approach, minimal focus on

customer service over the life-cyclecustomer service over the life-cycle

Time for Q & ATime for Q & A