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Retail Sector India

December 2013



Table of Contents

I. Retail Sector Overview

1. Retail Sector Highlights

2. Main Sector Indicators

3. Retail Sector Snapshot

4. FMCG Market Snapshot

5. Number and Size of Stores in India

6. Indian Retail in Global Rankings

7. Major Players by Retail Format

8. Retail Sector Forecast

9. Retail Sector Forecast (cont’d)

10.Indian Population and the Retail Market

11.New Rules for FDI in Multi-Brand Retail

12.Government Policy

13.Government Policy (cont’d)

14.Employment

15.Retail Sector SWOT Analysis

II. Food & Beverages

1. Packaged Food Market

2. Ready-to-Eat Market

3. Confectionery Highlights

4. Bread

5. Semi-Processed Food Market

6. Frozen Processed Food and Ready Meals

7. Milk and Cheese

8. Beverage and Cigarette Highlights

9. Alcoholic Beverage Data

10.Beer and Cigarette Data

11.Soft Drink and Bottled Water Highlights

12.Soft Drinks and Bottled Water

III.Personal Hygiene and Care, Detergents

1. Personal Hygiene Highlights

2. Personal Hygiene Market

3. Personal Hygiene Market Forecast

4. Personal Care Highlights

5. Skincare

6. Color Cosmetics

7. Natural Cosmetics and Fragrance

8. Dishwashing and Laundry Care

IV. Apparel and Footwear

1. Apparel Market

2. Apparel Market (cont’d)

3. Athletic Apparel and Footwear

4. Other Apparel



Table of Contents

V. Consumer Durables

1. Consumer Electronics and Home Appliances – SWOT

Analysis

2. Consumer Durables Snapshot

3. White Goods

4. Brown Goods

5. Consumer Electronics

6. Consumer Durable Financing in India

VI. Other Segments

1. Pharmaceuticals

2. Motor Vehicles

3. Luxury Goods

VII. E-Commerce (B2C)

1. E-Commerce Highlights

2. E-Commerce in India Snapshot

3. E-Tailing Data

4. E-Commerce – Ecosystem and Challenges

VIII. Major Players

1. Top M&A Deals

2. Bharti Retail Pvt. Ltd.

3. Carrefour Wholesale Cash&Carry India Pvt. Ltd.

4. TESCO/Trent

5. IKEA

6. Future Retail Ltd.

7. Reliance Retail



I. Retail Sector Overview

India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2013 (also called fiscal 2013) means Apr 1, 2012 – Mar 31, 2013. In Indian documents, FY (fiscal) 2013 is also labeled FY12-13.

The remaining nine months of calendar 2013, i.e. Apr-Dec, belong to fiscal year 2014.

In order to better align with calendar years and make international comparisons more meaningful, in the Major Players section of this report, Emerging Markets Insight has chosen to label data by

the year in which most of the result occurred. Unless otherwise stated, in the Major Players section of this report, 2012, for example, means the 12 months between Apr 1, 2012 - Mar 31, 2013, or

what in India is referred to as fiscal 2013. This applies only to Indian companies and does not apply to companies with global operations, which may be presented in this report.

When sources have not provided details on their year labeling policy, year labels in graphs featured in this report have been presented as provided by the source.



Retail Sector Highlights

In FY 2012, organized retail represented some 8% of the USD 430 bn Indian retail industry, CRISIL said in Sep 2012. The total retail sector accounted

for some 25% of GDP, while organized retail contributed some 2%, Technopak figures showed. The food and grocery segment accounted for more

than half of the retail market, but claimed organized retail sales of between 2% (CRISIL) and 11% (Deloitte). The retail sector is one of the biggest

employers in India with a nearly 24-million workforce, Technopak said. The country was the world’s 12th-largest consumer durables market in FY

2012 and is forecast to rank fifth-largest by FY 2025, IBEF said in Aug 2013.

Importance of Retail

FDI Policy

Challenges

Way Ahead

In Aug 2013, the Indian government relaxed the rules for Foreign Direct Investment (FDI) in multi-brand retail in an attempt to woo investors, as no

foreign multi-brand retailer has set up shop in India since 51% FDI in multi-brand retail was first permitted in the country in Sep 2012. FDI in multi-

brand retail is a state subject and as per the policy, e-commerce is not allowed as an alternate channel as it can serve the customer beyond the

physical location of the store, Deloitte India commented. Political changes in the state and central governments and the USD/INR currency

fluctuation pose risks to foreign investment in retail in India.

States in India differ in terms of culture, language, socio-economic development and spending power, so international retailers would need to

customize their offerings to suit regional tastes, Deloitte India said. The choice of real estate suitable for large retail operations is very limited, which

will be a major challenge to the corporatized retail’s ability to grow, Technopak pointed out. Real estate limitations may also give a boost to informal

retail channels. To meet the FDI policy guidelines on sourcing and improve margins, foreign retailers would need to work with local manufacturers

to create India-specific private label brands.

Domestic retailers should focus on expanding their footprint not only in metropolitan areas, but also in towns with population of less than one

million. Although foreign retailers have been allowed to operate in smaller cities since Aug 2013, they may reasonably be expected to prefer larger

ones, leaving smaller urban and rural areas to domestic companies. While foreign retailers hunt for suitable retail spaces, domestic ones can apply

accommodation flexibility and use their exclusive insight into the Indian consumption patterns to gain an edge over their global competitors. Issues

that both local and foreign retailers will face include transportation and electricity supply challenges as well as finding skilled manpower.



Source:

Comments

Main Sector Indicators

India is home to approximately 15 million shops, the majority of which are run as standalone entities owned and operated by members of the same family.

Employment in this segment, referred to as independent retail, averages 1.5 employees per shop. These employees have no social security and no say on

working conditions and wages, Technopak commented in an Oct 2012 paper on FDI in the Indian retail sector. Independent retail is expected to create

more than nine million jobs over the next decade. Therefore, a labor policy that manages to bring this large informal workforce in an environment of formal

employment is much needed.

Main Retail Sector Indicators

Technopak Analysis

FY 2001 FY 2012 FY 2021

National GDP, USD bn 450 1,958 3,310

Estimated Merchandise Consumption (Retail Market Opportunity), USD bn 120 490 810

Urban consumption (% and value) 40% (USD 48 bn) 48% (USD 235 bn) 56% (USD 455 bn)

Rural consumption (% and value) 60% (USD 72 bn) 52% (USD 255 bn) 44% (USD 355 bn)

Share of Corporatized (Organized) Retail ~4% ~7% ~20%

Share of Independent Retail 96% 93% 80%

Size of Corporatized (Organized) Retail, USD bn 5 34 162

Size Of Independent Retail (USD bn) 115 455 648

Share of Indian Corporatized Retailers in Total Corporatized Retail ~100% ~95% 50%



Source:

Retail Sector Snapshot

India's Retail Sector, FY 2012

FMCG Market Break-Down by Product, FY 2013

India's Organized Retail Sector, FY 2012

FDI in FMCG, FY 2001-FY 2013, USD mn

Deloitte Jan 2013; Images Group; Reuters; D&B FMCG Sector, Aug 2013; IBEF; DIPP; Aranca Research;

Food and Grocery 60%

Apparel 8% Mobile and Telecom 6%

Food Service 5%

Jewelry 4%

Consumer Electronics 3%

Pharmacy 3%

Others 11%

Size of Indian Retail Sector, 2012:

USD 430 bn (CRISIL)

USD 490 bn (Technopak)

Apparel 33%

Mobile and Telecom 11%

Food Service 7%

Jewelry 6%

Consumer Electronics 8%

Others 24%

Food and Grocery 11%

Pie chart shows both

organized and unorganized

segments

Food and Beverages 53%

Personal Care 20%

Tobacco 15%

Household Consumables 10%

Others 2%

95.4 101.2

384.9

632.4

865.5

1,811.10

2.45% 2.60%

9.89%

16.25%

22.25%

46.60%

0%5%10%15%20%25%30%35%40%45%50%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

RetailTrading

Tea, Coffee VegetableOil

Soaps,Cosmetics

Paper, Pulp FoodProcessing

FDI in FMCG, FY 2001-FY 2013, USD mn % of Total FDI in FMCG

Size of Organized

Retail, FY 2012:

USD 34 bn

(Technopak)



Source:

FMCG Market Snapshot

Indian FMCG Market Size

Top FMCG Players in India (Based on FY 2012 Earnings)

Exports and Imports of FMCG

Total Distribution Reach of FMCG Players

D&B FMCG Sector, Aug 2013; EM Insight calculations; Tata Securities Research;

1,012

1,177

1,395 1,539

1,766

16.3%

18.5%

10.3%

14.8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Indian FMCG Market Size, INR bn % y/y growth

27.1 30 37.2

49.3 61.3

51.6 51.6 59.8

84.3

121.2

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

FMCG Imports, INR bn FMCG Exports, INR bn

ITC Ltd. 22.88%

Ruchi Soya Industries Ltd.

16.92%

Hindustan Unilever Ltd.

15.06%

Nestle India Ltd. 5.00%

Nirma Ltd. 4.44%

Others 35.70%

2.9

2.5

2.8

2.6

4.6

3.3

3.9

1.5

3.6

6.3

Jyothy Labs

ITC

Dabur

Emami

Colgate

Marico

GCPL

GSK

Nestle

HUL

Total Distribution Reach of FMCG Players, million outlets



Source:

Number and Size of Stores in India

Number and Average Size of Stores in India

Number of Stores byType

Share in Total Space by Store Types, %

livemint.com (based on forecasts by Boston Consulting Group, Ernst and Young Pvt. Ltd., Deloitte Haskins and Sells, KPMG Advisory

Services Pvt. Ltd., Technopak Advisors Pvt. Ltd. and Booz and Co.)

100 500

10,000

500 50 40 2 400 1,500

30,000

4,000 600 300 30 2,000 4,000

50,000

8,500

1,400 1,000 200

Convenience Stores Discount Stores Specialty Stores/EBOs Supermarkets Department Stores Hypermarkets Cash & Carry

2006 2011 2016 F

700

1,000

1,500

2,000

30,000

50,000

70,000

Convenience Stores

Discount Stores

Specialty Stores/EBOs

Supermarkets

Department Stores

Hypermarkets

Cash & Carry

Average Size of Stores in India, 2011, sq ft

11,192

36,830

67,100

2006 2011 2016 F

Total Number of Stores in India1% 2% 7%

10% 17%

25% 7%

20%

21% 5%

9%

8% 75%

50% 37%

2% 2% 2%

0.3% 1%

0%

20%

40%

60%

80%

100%

120%

2006 2011 2016 F

ConvenienceStores

Discount Stores

SpecialtyStores/EBOs

Supermarkets

DepartmentStores

Hypermarkets

Cash & Carry



Source:

Indian Retail in Global Rankings

India's GRDI Score, 2013

How India Compares to Other Markets - A.T. Kearney's Global Retail Development Index (GRDI), 2013

Retail Real Estate Momentum Index, Global Top 20 Markets

The 2013 Global Retail Development Index 2013 by A.T.Kearney; Jones Lang LaSalle 2012;

100.0%

95.6%

95.8%

92.0%

77.5%

62.1%

36.8%

36.6%

17.7%

52.9%

Brazil

Chile

UAE

Uruguay

Oman

China

India

Georgia

Mongolia

Peru

Market Attractiveness, %

86.2%

100.0%

94.6%

73.9%

97.8%

67.9%

59.4%

63.8%

37.0%

60.4%

Brazil

Chile

UAE

Uruguay

Oman

China

India

Georgia

Mongolia

Peru

Country Risk, %

43.3%

18.7%

3.0%

63.5%

11.3%

34.3%

63.3%

83.4%

99.0%

63.4%

Brazil

Chile

UAE

Uruguay

Oman

China

India

Georgia

Mongolia

Peru

Market Saturation, %

Country GRDI Score 2013 Change in Rank

Compared to 2012

Brazil 69.5% -

Chile 67.1% -

UAE 63.5% +2

Uruguay 66.5% +1

Oman 53.9% -9

China 66.1% -1

India 55% -9

Georgia 61.4% -2

Mongolia 62.5% +2

Peru 56.5% -2

China

India

Indonesia, Turkey

Brazil, Vietnam

Peru, Thailand, Russia

Kazakhstan, Malaysia, Chile

Ukraine, Morocco, Saudi Arabia

Poland, Mexico, Philippines, Colombia

Based on growth

projections of total

population, urban

population, GDP,

GDP/capita, retail

sales and modern

shopping center

stock, combined with

real estate investment

and international

retailer presence.

Source: Jones Lang

LaSalle, Aug 2012



Source:

Major Players by Retail Format

Organized Convenience Store Market in India

Mixed Retailers in India, FY 2012

Grocery retailers in India, FY 2012

Electronics (l) and Apparel (r) Specialist Retailers, FY 2012

Netscribes report of June 2012; Passport by Euromonitor International;

Electronics and

Appliance Specialist

Retailers

Market Share, FY 2012 Apparel Specialist

Retailers

Market Share, FY

2012

LG Electronics India 3.2% Raymond 0.5%

Infiniti Retail 2.8% Bata India 0.5%

Next India Retail 2.5% Reebok India 0.4%

MobileStore 2.2% Aditya Birla Nuvo 0.4%

Vijay Sales 2.1% Benetton India 0.3%

Samsung India Electronics 1.7% Adidas India Marketing 0.2%

Pantaloon Retail India 1.5% Levi Strauss India 0.2%

Others 84.1% Others 97.5%

Shopper's Stop 20%

Lifestyle International

19.90%

Pantaloon Retail India 16%

Airplaza Retail Holdings 8.80%

Trent 6.90%

Fabindia Overseas 6.90%

Reliance Retail 6.20%

Others 15.20%

90

112.5

139.8 173.3

214.1

25.00%

24.27%

23.96%

23.54%

23%

23%

24%

24%

25%

25%

26%

0

50

100

150

200

250

FY 2011 FY 2012 Est. FY 2013 F FY 2014 F FY 2015 F

Organized Convenience Store Market in India, INR bn % y/y change

Company Name Market Share, FY 2012

Future Value Retail Ltd. 0.50%

Reliance Retail Ltd. 0.30%

Mother Dairy Fruit & Vegetable Pvt. Ltd. 0.10%

Others 99.00%

Number of outlets - 12 million in 2012

The convenience

store market

accounted for 7.4% of

the total organized

retail market in India

in FY 2011.



Source:

Retail Sector Forecast

Organized Retail Forecast

Organized Retail Sales Projections for 2015, USD bn

Indian Retail Market Forecast

dartconsulting.co.in; Sunstone Business Review, FICCI, Technopak, Business World, RIL Annual Report, Forrester; Booz & Company Analysis;

Organized

Retail

USD 100 bn

Total Retail in

2015:

USD 665 bn

Food and Groceries 35.4

Apparel 19

Footwear 7 Consumer Electronics 22.7

Home 3.8

Jewelry and Watches 7

Pharmacy and Wellness 3.3

Books, Music and Entertainment 1.3

Total Organized

Retail in 2015:

USD 100 bn

Unorganized

Retail

USD 565 bn

8% 10% 12% 15%

92% 90% 88% 85%

0%

20%

40%

60%

80%

100%

120%

2012 2013 F 2014 F 2015 F

UnorganizedRetail, %

OrganizedRetail, %

0.6 9 70

12 26 84

200 270

470

675

850

2006 2011 2016 Est. 2020 Est.

E-Tailing, USD bn Organized Retail, USD bn Total Indian Retail, USD bn

Source: Booz & Company Analysis



Source:

Retail Sector Forecast (cont’d)

FMCG Market Size Forecast

Consumer Durables Market in India - Forecast

Rural FMCG Market Size Forecast

Consumption Expenditure Forecast

D&B FMCG Sector, Aug 2013; India Brand Equity Foundation (IBEF);

1,53

9

1,76

6

1,99

5 2,25

7 2,56

0

10.3%

14.8%

13.0% 13.1% 13.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

500

1,000

1,500

2,000

2,500

3,000

FY 2012 FY 2013 FY 2014 F FY 2015 F FY 2016 F

FMCG Market Size Forecast, INR bn % y/y change

7.3

12.5

FY 2012 FY 2015 Est.

Consumer Durables Market in India, USD bn

India was the world’s 12th-largest consumer durables

market in FY 2012 and is forecast to rank fifth-largest by

FY 2025, IBEF said in Aug 2013.

12

100

FY 2011 FY 2025

Rural FMCG Market Forecast, USD bn

991

2,020

FY 2010 FY 2020

Consumption Expenditure, USD bn



Source:

Indian Population and the Retail Market

Rising Incomes Will Change India’s Social Structure

India's Population and the Retail Market

McKinsey Global Institute; NCAER, CSSO, TSMG Analysis;

2015 2025 2015 2025 2015 2025

Household Income

Brackets, Annual (thou

INR)

Number of Households,

mn

Number of Households,

mn

Aggregate Disposable

Income, INR tn

Aggregate Disposable

Income, INR tn

Aggregate Consumption,

INR tn

Aggregate Consumption,

INR tn

Globals (>1,000) 3.3 9.5 6.3 21.7 4.1 14.1

Strivers (500-1,000) 5.5 33.1 3.8 20.9 2.7 16.5

Seekers (200-500) 55.1 94.9 15.2 30.6 11.8 24.6

Aspirers (90-200) 106 93.1 14.6 13.7 12.2 11.9

Deprived (<90) 74.1 49.9 3.8 2.6 3.3 2.4

Middle

Class

Population 2001,

million people

Population 2015

(Est.),

million people

Metros and Mini-Metros, 8 cities 67 130

Top Cities (Population > 1 million), 27 cities 37 72

Large Cities (Population: 0.5-1 million), 32 cities 24 45

Rest of India, 5,500 towns + 600,000 villages 874 1,153

Source: NCAER, CSSO, TSMG Analysis

77% 73% 70% 58%

2% 3% 3%

4%

6% 6% 7%

10%

15% 18% 20%

28%

0%

20%

40%

60%

80%

100%

120%

2004 2010 2015 F 2025 F

Metros and Mini-Metros

Top Cities

Large Cities

Rest of India

% Population Living in:



Source:

New Rules for FDI in Multi-Brand Retail

More Cities

In Sep 2012, the government allowed 51% FDI in multi-brand retail. Before 2012, FDI in multi-brand retail was prohibited in India. As of

Aug 2013, foreign multi-brand retailers are allowed to open stores in cities with a population of less than 1.0 million. A year ago,

foreign investors were allowed to set up stores only in cities with a population of more than 1.0 million, which actually amounted to 53

cities.

Better

Sourcing

Options

Multi-brand retailers can now source at least 30% of their manufactured and processed goods from local micro, small and medium

enterprises with a total plant and machinery investment of USD 2.0 million, instead of USD 1.0 million, as allowed in Sep 2012.

Sourcing can continue even after the companies’ USD 2.0 million investment cap has been reached. Retailers have also been allowed

to buy from farmers’ and agriculture co-operatives, which will be counted in the sourcing requirement. Sourcing norms will have to be

met over a five-year period.

Back-End

Infrastructure

Unchanged from the Sep 2012 regulations, foreign retailers have to invest at least USD100mn and put at least half of that in back-end

infrastructure, such as cold storage and warehouse facilities within three years. Retailers will make subsequent investment in back-end

infrastructure as needed. The policy does not specify whether the initial investment in back-end infrastructure needs to be a fresh one

or can be a stake purchase in an already existing establishment, Deloitte India commented.

In Aug 2013, the Indian government relaxed the rules for Foreign Direct Investment (FDI) in multi-brand retail, as part of a simplification to FDI regulations

for nearly a dozen sectors, The Times of India reported on Aug 2, 2013. The step is the government’s latest attempt to woo investors, as no foreign multi-

brand retailer has set up shop in India since 51% FDI in multi-brand retail was first permitted in the country in Sep 2012.

The Times of India; AT Kearney; Deloitte India;



Source:

Government Policy

Economic

Liberalization

of 1991

Government

Bodies

Major Players

Operate

Despite

Restrictions

Until 1991, all Indian governments followed protectionist policies that were influenced

by socialist economies. A balance of payments crisis in 1991 forced India to liberalize

its economy. The country joined the WTO in 1995, and, as part of the liberalization

process, has been slowly opening its retail sector to FDI through a series of steps.

The first was the permission of 100% FDI in cash-and carry (wholesale) in 1997. The

regulatory regime was eased up in 2006.

Foreign Investment in India is regulated by the Foreign Exchange Management Act

(FEMA) and the Foreign Exchange Management Regulations issued by the

Reserve Bank of India (RBI). The Ministry of Commerce and Industry is the key

government body in charge of implementing the FDI policy. Official communications

regarding the FDI policy are issued by the Secretariat of Industrial Assistance at

the Department of Industrial Policy and Promotion (DIPP).

Global retailers have been operating for years in India, under legal forms including

franchise agreements (Pizza Hut, Lacoste), cash-and-carry wholesale trading (Metro),

strategic licensing agreements (Mango, Starbucks) and manufacturing wholly-owned

subsidiaries (Nike, Reebok). The latter are treated as Indian companies and are

allowed to retail. Standalone boutiques (Christian Louboutin, Roberto Cavalli) have

opened since 100% FDI in single-brand retail has been allowed. The government

approved a total 18 FDI proposals in single-brand retail worth USD 173 mn between

Apr 2010 and May 2013, The Hindu reported on Aug 20, 2013.

What Keeps Investors Away

Only 11 States of India’s 28,

have approved FDI in multi-

brand retail, which means a

significant part of the country

is out of bounds for global

companies, keen on a pan-

India footprint.

There is no central agency for

a single-window clearance for

the approvals and licenses

required to start a retail

business in India. Chasing

multiple central and state

government agencies may

result in project delays and

cost overruns.

The discretionary power of

states to approve retail

projects results in uncertainty,

as states may impose

additional conditions.

Corporate Catalyst India; Legal India; AT Kearney; The Hindu; The Hindu Business Line; PWC India;



Source:

Government Policy (cont’d)

Why Let

Global

Supermarket

Operators

In

The government has claimed that FDI in multi-brand retail will create 10 million new jobs without impacting existing employment in

the unorganized retail sector, and will help keep food-based inflation down. In addition, more organized retail will mean easier and

higher tax collection. Foreign multi-brand retail companies are expected to help develop supply chain and logistics, thus

contributing to higher employment and tax collection from companies in these sectors.

Foreign supply-chain best practices will reduce India’s high food wastage levels (at some 24-40%). Food quality and safety will be

improved. Foreign multi-brand retail chains will reduce the number of intermediaries between producers and retailers. This will lead

to higher prices paid to producers and a more regular flow of income. Greater variety of products and more competitive prices will

be available. Brand-conscious Indians shopping abroad could spend the same money at home.

Micro, small and medium retail businesses suffer from lack of branding and possibilities to reach out to world markets. By allowing

foreign retailers in, some could develop by signing franchise agreements for their neighborhood formats. Unorganized retail stores

can buy their merchandise from wholesale retailers, eliminating middle men and benefiting from bulk discounts. The prestige of

Indian products will increase as they will become more similar in design and qualities to their Western counterparts.

The Goods

and Service

Tax

(GST)

The Goods and Service Tax (GST) has been proposed in 2009, but as of Sept 2013 has not been adopted as India’s single

national tax rate. GST is expected to improve tax collection and simplify trade across India by replacing the multiple (state and

national) taxation currently existing in India.

Under GST, both central and state taxes will be collected at the point of sale and will be charged on the manufacturing cost. The taxation

burden will be divided equitably between manufacturing and services through a lower tax rate by increasing the tax base and

minimizing exemptions.

GST is expected to improve cash flows, lower input costs and boost profitability of both manufacturers and traders. It may also lead

to a re-evaluation of procurement and distribution agreements.

The planned tax refunds on goods purchased for resale will significantly reduce the inventory costs of distribution.

Confederation of All Indian Traders; Corporate Catalyst India; Legal India; IBEF;



Source:

Employment

Employment in Retail in India

Current and Projected Employment in E-tailing

Direct Employment in E-Tailing, Last Mile Delivery

Technopak Analysis (FDI in Retail, Oct 2012; E-Tailing in India, May 2013);

18

22

31

5

34

162

2001

2012

2021 F

No. of Direct Employees in Corporatized (Organized) Retail, million people

No. of Direct Employees in Independent Retail, million people

10,600

954,000

2012 2021 F

Direct Employment in E-Tailing

12,500

5,000

3,500

2,500

0

5,000

10,000

15,000

20,000

25,000

2012

Others (Customer CareEmployees, Merchandizers,HR, Finance, etc.)

Technology

Warehousing

Logistics

100,000

300,000

250,000

800,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2021 F



.

…

Source:

Retail Sector SWOT Analysis

India is one of the fastest-growing consumer markets in the world. By

2025, it is estimated to grow four times to become the fifth-largest

globally. Urban India will account for roughly 70% of the consumption

growth, while rural India will grow 32% by 2025. The majority of the

FMCG categories are growing faster in rural areas than in urban,

suggesting that rural markets contain many untapped opportunities.

India is very diverse both culturally and economically, so products

catering to various consumer needs can be potentially successful there.

The market is very fragmented and largely price-driven. The condition

of the road network affects supply chain efficiency. Food wastage due

to transportation and storage problems is very high. In rural India,

regular power supply is not a certainty and the character of purchases

is seasonal. Cultural idiosyncrasies affect perception and sales of

certain products. Skilled personnel is hard to find. The choice of real

estate suitable for large retail operations is very limited.

Rising inflation has an adverse effect on consumer spending. Heavy

taxation, varying from state to state, curbs business activities. Price

competition among retailers puts downward pressure on margins. India

seems not as well positioned as other Southern and South-East Asian

economies to take up moving global business. Political changes in the

state and central governments and the USD/INR currency fluctuation

poses risks to foreign investment in retail in India.

Consumption in India will continue to grow regardless of the general

pace of the economy. Rising disposable incomes have resulted in

higher levels of discretionary spending and aspirational shopping. TV,

the Internet and other media help raise consumer awareness and the

desirability of the latest lifestyle trends and brands. Young, working-age

people are the majority of the Indian population, which promises

dynamic consumer behavior and eager response to new product

launches and product innovation.

SWOT

Analysis

Strengths Opportunities

Weaknesses Threats

PWC; McKinsey Global Institute; IBEF; company annual reports;



II. Food & Beverages






When sources have not provided details on their year labeling policy, year labels in graphs featured in this report have been presented as provided by the source.



Source:

Packaged Food Market

Packaged Food Market Size

Urban/Rural Packaged Food Market Segmentation

Packaged Food Market Segmentation by Type

Packaged Food Market Segmentation by Region

Ken Research; EM Insight calculations;

4,618.50 5,374.60

6,228.30

7,190.80

8,215.20

9,434.10

16.5% 16.4%

15.9%

15.5%

14.3%

14.8%

13%

14%

14%

15%

15%

16%

16%

17%

17%

0

2,000

4,000

6,000

8,000

10,000

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Packaged Food Market Size, USD mn % y/y change

92.0% 91.4% 90.9% 91.0% 90.0% 89.4%

8.0% 8.6% 9.1% 9.0% 10.0% 10.6%

84%

86%

88%

90%

92%

94%

96%

98%

100%

102%

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Semi-Processed,%

Ready-to-Eat, %

76.7% 77.1% 77.8% 78.3% 79.1%

23.3% 22.9% 22.2% 21.7% 20.9%

0%

20%

40%

60%

80%

100%

120%

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

RuralMarket, %

UrbanMarket, % 33.0% 32.6% 32.8%

28.0% 28.8% 29.1%

21.0% 20.9% 20.6%

18.0% 17.7% 17.5%

0%

20%

40%

60%

80%

100%

120%

FY 2011 FY 2012 FY 2013

East

South

West

North



Source:

Ready-to-Eat Market

Ready-to-Eat Market Segmentation

Confectionery Sales by Value

Biscuit, Cracker Market Share by Sales Value (Apr-Sep 2012)

Ice Cream Market Segmentation (publ. Mar 2012)

Ken Research; Indian Biscuits Manufacturers’ Association; The Economic Times; BMI; CIER

50.5% 48.5% 48.4% 44.6% 42.8%

24.1% 24.2% 23.7% 24.9% 24.8%

16.6% 18.7% 19.7% 21.8% 23.5%

8.8% 8.6% 8.2% 8.7% 8.9%

0%

20%

40%

60%

80%

100%

120%

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Ice Cream

Snacks

Confectionaries

Bakery

5,663.9 6,542.1 7,397.8 8,430.40

Total Market Size,

USD mn

23,329 27,084 30,395

31,753 36,619

40,784

23,329 26,691

29,676

FY 2010 FY 2011 FY 2012

Chocolate Sales, INR mn Sugar Confectionery Sales, INR mn Gum Sales, INR mn

78,409.70

100,854.70 90,393.90

Glucose 19%

Cookies 26%

Cream Biscuits 22%

Marie 11%

Non-Salt Crackers 9%

Salt Crackers 6%

Others 6%

by City Non-

Metropolitan

Cities 35%

Six Major

Metropolitan

Cities 65%

by Type of Product:

Branded

48%

Unbranded

52%

4,910.8



Confectionery Highlights

Overview

The Indian confectionery market was estimated at nearly INR 101 bn in 2012 (BMI) and according to research and market

intelligence company Netscribes is expected to grow at a CAGR of 10.8% from 2012 onwards. Demand and consumption are

almost at par in rural and urban India, with rural consumers being more sensitive to price and urban ones to product variety.

Unlike in other countries, mono- and not multi-packs of confectionery are preferred in India. Manufacturers often employ

different promotional and advertising campaigns, as well as different size packaging and flavors, to lure urban and rural

consumers into buying.

Players

Low-priced products are distributed through the unorganized channel, while medium-priced and premium products are mostly

sold by organized retailers. Organized manufacturers mainly comprise the Indian branches of multinational companies, but

domestic players are also present. India’s top confectionery manufacturers include Nestle India Ltd., Cadbury India Ltd., Perfetti

Van Melle India Ltd., Candico Ltd., ITC Ltd. and Wrigley India Pvt. Ltd. Some 30% and 10% of chocolate and chewing gum

manufacturers, respectively, belong to the unorganized sector. The chocolate market in the country is 90% dominated by

multinational companies Cadbury and Nestle. Premium chocolates are mostly imported and some 70% of annual chocolate

sales are made in urban areas.

Imports,

Exports

Some 39.1% of India’s sugar confectionery imports came from Indonesia and China in 2011, Netscribes said in a Nov 2012

report. Some 79.6% of block chocolate imports came from Malaysia and Singapore, and 75.4% of chewing gum imports were

from China and the UAE in 2011. Some 56.6% of India’s chewing gum exports were to the United Arab Emirates and 64.3% of

block chocolate exports were shipped to Bhutan and Uzbekistan in 2011, Netscribes added.



Source:

Bread

India Packaged Bread Market Size

Market Segmentation, FY 2013

Market Share by Bread Type, INR bn, Publ. Mar 2012

Comments

Ken Research; CIER; All India Bread Manufacturers’ Association; EM Insight calculations;

Per capita bread consumption ranges between 1.5 kg and 1.75 kg in

India, the bread manufacturers’ association said on its website.

The organized sector includes some 1,800 small-scale bread

manufacturers, 25 medium-scale manufacturers and two large-scale

industrial producers.

The two largest players, Britannia Industries Ltd. (BIL) and Modern

Food Industries Ltd. (MFIL), were allowed to continue operations on

the basis of their capacity and expertise in 1976, when the government

restricted bread manufacturing to small scale industries (SSI) only.

VAT is not imposed on bread in most of the states. Bread is gradually

evolving into a branded product and in-store bakeries are gaining

popularity.

White Bread 84%

Brown Bread 10%

Others 5%

Unorganized 59% Organized 41% North 36%

East 10%

West 29%

South 25%

By Regions: By Players:

430 453.7

479.1 505.3 533.4

5.6%

5.5%

5.6%

5.5%

5.6%

5.4%

5.5%

5.5%

5.6%

5.6%

5.7%

0

100

200

300

400

500

600

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Packaged Bread Market Size, USD mn % y/y change



Source:

Semi-Processed Food Market

Semi-Processed Packaged Food Market Segmentation

Soup Market Shares by Retail Value, FY 2012

Breakfast Cereal Market Shares by Retail Value, FY 2012

Noodles Market Shares by Retail Value, FY 2012

Ken Research; Euromonitor International;

67.1% 67.8% 66.3% 65.8% 65.5%

18.6% 19.0% 21.0% 22.9% 23.7%

9.7% 8.4% 7.7% 6.5% 6.0%

4.6% 4.8% 5.0% 4.8% 4.8%

0%

20%

40%

60%

80%

100%

120%

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Soups

Frozen Foods

Packaged Cereals

Noodles

Total Market Size,

USD mn 463.9 564.4 648.8 817.5 1,003.8

Hindustan Unilever Ltd.

63.20%

Nestle India Ltd. 23.30%

Capital Foods Ltd. 10.70%

Others 2.80% Nestle India Ltd.

62.6%

ITC Ltd. 8.0% Bambino Agro Industries Ltd.

5.6% Indo Nissin Foods Ltd. 4.0%

Hindustan Unilever Ltd. 2.6%

CG Foods India Pvt. Ltd. 2.3%

Glaxo SmithKline 1.8%

Others 13.1%

Kellogg India Ltd. 39.8%

Bagrry's India Ltd. 15.9%

Frito-Lay India 14.9%

Mohan Meakin Ltd. 5.8%

Marico Ltd. 3.8%

Avesta Good Earth Foods Pvt.Ltd. 1.9%

Hindustan Oil Corp. Ltd. 1.6%

Others 16.3%



Source:

Frozen Processed Food and Ready Meals

Company Market Shares, Frozen Processed Food, FY 2012

The market size of frozen processed food in India, measured

by retail value, totaled some INR 3,700 mn in fiscal 2012, up

from some INR 3,000 mn in the previous year. In terms of

volume, some 22,000 tonnes of frozen processed food were

sold in India in FY 2012, against some 18,000 tonnes in the

prpevious year.

The growth in frozen processed food sales in each year

between 2007and 2012 is fueled by the rising number of

super- and hypermarkets with freezer display cabinets,

Euromonitor reported in Jan 2013.

Constant sales are expected to grow at a CAGR of 17%

between fiscal 2012 and 2017. In fiscal 2017, the retail frozen

processed food market is expected to be worth some INR

8,000 million for some 50,000 tonnes of food.

The market size of ready meals food in India, measured by

retail value, totaled some INR 1,000 mn in fiscal 2012, up

from some INR 800 mn in the previous year. In terms of

volume, some 4,000 tonnes of ready meals were sold in India

in FY 2012, against some 3,000 tonnes in the prpevious year.

Canned/preserved and frozen ready meals are the most

important sub-segments. Demand is being pushed up by

time-strapped working people and modern grocery retailers

with large in-house cold storage facilities, Euromonitor

reported in Jan 2013.

Constant sales are expected to grow at a CAGR of 9%

between fiscal 2012 and 2017. In fiscal 2017, the retail ready

meal market is expected to be worth some INR 1,700 million

for some 14,000 tonnes of food.

Company Market Shares, Ready Meals, FY 2012

Passport by Euromonitor International

Mother Dairy Fruit & Vegetable Ltd.

22.10%

Al-Kabeer Exports Pvt. Ltd. 16.50%

Venky's India Ltd. 9.00%

Innovative Foods Ltd. 9.00%

Temptation Foods Ltd. 7.00%

Darshan Foods Pvt. Ltd. 5.00% McCain Foods

India Pvt. Ltd. 4.60%

Others 26.80%

MTR Foods Ltd. 36%

ITC Ltd. 19%

Al-Kabeer Exports Pvt. Ltd. 9.10% Kohinoor Foods

Ltd. 7%

Innovative Foods Ltd. 6%

Venky's India Ltd. 5%

McCain Foods India Pvt. Ltd.

0.80%

Others 17%



Source:

Milk and Cheese

Milk Market Break-Up by Segments, FY 2011

Cheese Market by Region (l) and Type (r) (publ. Mar 2012)

Cheese Market Shares by Retail Value, FY 2012

Highlights

CIER; Snapshot: Dairy Sector in India, Dec 2012, e-Research and Publications India Pvt. Ltd.;

Cheese Spread

30%

Other

Cheese

Varieties

15% Processed

Cheese

55%

North 36%

East 42%

West 16%

South 6%

Fluid Milk 30%

Ghee 8%

Khoa/Panner/Channa 7%

Milk Powder 2% Table Butter 1%

Cheese 2%

Ice Cream 1% Others (Sweets, Curd, Yoghurt,

etc.) 49%

Indians consume all internationally known dairy products but also

traditional ghee (clarified butter) and dahi (yoghurt). With consumer

tastes evolving, flavored milk is gaining popularity, especially among

the urban population, Investindia said.

Many of the industrially prepared dairy products are also produced in

Indian households. High consumption of traditional milk products

takes place during the winter season, rich in festivals and wedding

celebrations.

Changing consumption patterns and growing foodservice in India are

going to boost the cheese market in the country.

Cheese retail value was estimated at slightly below INR 10 bn and

volume – at some 40,000 tonnes.

Gujarat Co-Operative Milk

Marketing Federation Ltd.

49.2%

Britannia Industries Ltd.

15.7%

MMD Dairy 4.1% Heritage Foods (India) Ltd. 1.0%

Pantaloon Retail India Ltd. 0.2%

Others 29.8%



Beverage and Cigarette Highlights

Overview

The Indian alcoholic beverage market was estimated at around INR 500 bn in FY 2012 and is expected to exceed INR 1.4tn by

2015, figures by the Indian chambers of commerce association ASSOCHAM showed. The country is the world’s third-largest

market for branded alcoholic beverages in terms of volume and the fourth-largest tobacco consumer in the world.. The per

capita consumption of alcoholic beverages, excluding country liquor, is 3 liters per year, which is low compared to other Asian

countries. The per capita consumption of beer was 1.5 liters, against a global average of 27 liters in 2012, D&B added.

Domestic

Consumption

Indian-made foreign liquor (IMFL) is the largest segment, followed by Indian-made Indian liquor (IMIL or Country Liquor).

Country liquor is made by the fermentation and rectification of molasses, a by-product of sugar. In terms of country of origin,

98% of the liquor the Indians consume is made in India. ASSOCHAM expects domestic alcohol consumption to grow to

20,000 million liters by the end of 2015, from 7,000 million liters in 2012. Products with relatively low alcoholic content such as

beer and wine face growing demand, in urban areas in particular, FRPT said in a report in Aug 2013.

Regulations

Some 52% of the alcohol produced in India is for making beverages, while 48% is used for industrial purposes, the All India

Distillers’ Association (AIDA) said. Alcoholic beverages are the second-largest contributor to the state exchequer. Liquor is

generally sold in specialty shops which are subject to licensing by state governments. State authorities also set the price at

which liquor is sold to retailers. According to industry sources, up to 20% of the liquor consumed annually has evaded taxation.

Alcohol and cigarette ads are banned, so producers opt for surrogate advertising to make their names visible.

Changing

Perception

Despite being the world’s largest whiskey market, only 30% of men and 3% of women have at least one drink a year, a study

by the India Centre for Alcohol Studies (INCAS), a government research body, showed. However, urbanization, favorable

demographics, more financially independent women and the western cultural influence have slowly been changing the

perception on drinking in India. Super- and hypermarkets in some states have started selling beer and wine, products cater

specifically to female consumers, there is a rise in the cocktail culture and women drinkers are more widely accepted, Reuters

reported on Mar 20, 2013.



Source:

Alcoholic Beverage Data

Alcoholic Beverage Market Break-Down, 2011

IMFL Company Market Shares, Apr 2012

Alcoholic Beverage Consumption by Type

Wine Consumption By Segments, 2011

CIER; EMIS; FRPT Aug 2013;

Whiskey 55%

Rum 15% Gin 1.50%

Vodka 0.50%

Brandy 18%

Wine 1.50%

Others 8.50%

Data published by source in Mar 2013

United Spirits 53%

Radico Khaitan 12%

Jagatjit 9%

Tilak Nagar 4%

Mohan Meakins 9%

Others 13%

Indian 98%

Data published by source in Mar 2013

Alcoholic Beverage Consumption by

Country of Origin

Imported

2% IMFL 34.9%

IMIL 34.6%

Beer 30.3%

Wine 0.2%

Total alcoholic beverage

market 2011: 728 million

cases

(1 case = 9 liters)

Total IMFL Market 2011:

254 million cases

Total Wine Market 2011:

1.5 million cases

Red Wine 45%

White Wine 40%

Sparkling Wine 13%

Rose Wine 2%

Data published by source in Aug 2013



Source:

Beer and Cigarette Data

Whiskey (l) and Beer (r) Consumption by Region

Cigarette Market Shares by Retail Value, 2011

Market Shares of Beer Manufacturers, Apr 2012

Cigarette Market by Region (l) and Brand (r) (publ. Mar 2013)

CIER, EMIS, Passport by Euromonitor International;

North 31%

East 20%

West 25%

South 24%

Data published by source in Mar 2013 North 12%

East 2%

West 37% South

49%

SAB Miller 31%

Mohan Meakins

6%

Others 13%

North 20%

East 20%

West 18%

South 42%

Classic 45%

Rothmans 15%

India Kings 5%

Others 35%

Strong Beer 54%

Standard Beer

45%

Beer Consumption by Type

United Breweries

50%

ITC Ltd. 75.0%

Godfrey Phillips India Ltd. 14.4%

VST Industries Ltd. 7.6%

Golden Tobacco Ltd. 0.5%

Others 2.5%



Soft Drink and Bottled Water Highlights

Overview

Sales of carbonated drinks in India are estimated at some INR 77.5 bn in 2011 and 88.3 bn in 2012, figures by BMI showed.

Juice drink sales were estimated at some INR 89.8 bn and 103.4 bn in 2011 and 2012, respectively. Bottled water sales

jumped some 30% in value in 2011 to INR 129 bn, Euromonitor International said in a Jul 2012 report. In terms of volume,

sales totaled slightly below 6.0 billion liters in 2011, up from some 5.0 billion liters sold in the previous year.

Consumption

Per capita consumption of soft drinks in India is at about 5 litres per year, implying plenty of scope for growth, BMI reported.

Middle and lower-income groups account for some 84% of the total consumption of soft drinks in the country, CIER said.

According to a study by the National Council of Applied Economic Research (NCAER), quoted by CIER in Mar 2013, some

91% of soft drinks sales target the middle class, comprising lower, middle and upper income segments. According to CIER, per

capita consumption of fruit juices is some 0.2 liters and comes almost exclusively from urban areas.

Domestic Sales

Some 80% of soft drinks are sold in returnable bottles, resulting in a floating stock of some 1,000 million bottles worth some

INR 6.0 bn. Soft drinks sold in PET bottles account for some 12% of the market, CIER said. According to the same source,

some 70% of the soft and carbonated drinks are consumed by urban Indians and the remaining 30% - by people in the rural

parts of the country. The cola and non-cola segments claim some 62% and 38% of sales. The non-cola segment includes soda

and drinks with lime, orange and mango flavors.

Trends

Indian soft drink producers mainly rely on product innovation and marketing to boost sales. Efforts are made to offer more

health and functional drinks to the increasingly health- and value-conscious Indian consumers, BMI reported. In the bottled

water segment, sales are being pushed up by rising safety and hygiene awareness following incidents of waterborne diseases,

as well as by lifestyle changes, including higher health-consciousness. Bottled water sub-segments include 20-liter containers,

popular in homes and offices, 500-ml bottles carried in backpacks and purses, as well as flavored and spring water.



Source:

Soft Drinks and Bottled Water (graphs show Indian fiscal years)

Fruit Beverages, Market Share by Type (published Mar 2012)

Market Share of Health Drinks, Sales Value, 2012

Market Share of Soft Drink Brands, 2011

Company Market Shares (Brand Names), Bottled Water, 2011

CIER; Business Standard; Passport by Euromonitor International;

Ready-to-Serve (RTS) Beverages

47%

Pulp/Concentrate 40%

Fruit Juices 6%

Squashes 7% Pepsi 15.60%

Thums Up (Coca-Cola) 15.60%

Sprite (Coca-Cola) 15.30%

Coca-Cola 8.90% 7Up (Pepsi) 5.50%

Others 39.10%

Parle Bisleri Ltd. (Bisleri) 42.80%

PepsiCo India Holdings Pvt. Ltd. (Aquafina) 14.90%

Coca-Cola India Pvt. Ltd. (Kinley)

11.30%

Dhariwal Industries Ltd.

(Oxyrich) 8.30%

Parle Agro Pvt. Ltd. (Bailley)

1.50% Mother Dairy

Calcutta (Mother Dairy) 0.40%

Others 20.70%

Horlicks 47%

Boost 14%

Complan 15%

Bournvita 15%

Others 9%



III. Personal Hygiene and Care

Detergents






When sources have not provided details on their year labeling policy, year labels in graphs featured in this report, have been presented as provided by the source.



Personal Hygiene Highlights

Oral Care

Per capita annual consumption of toothpaste in India totals some 130 gr, against more than 300 gr in Europe, 255 gr in

Malaysia and 304 gr in China, Gyan Research and Analytics said in May 2013, quoting figures by the World Dental Federation.

The penetration of oral care products in rural India is at about 1/3 of that in the urban parts of the country. With a share of 75%,

toothpaste was the largest contributing segment in oral care in FY 2012, followed by toothbrush at 12%, tooth powder at 11%

and mouthwash at 2%, respectively.

Bath & Shower

India’s soap market is dominated by Hindustan Unilever (HUL) with its two major bradns – Lux, targeting women, and Lifebuoy,

targeting men and families. Shower gels, which are gaining popularity, are dominated by HUL and Colgate Palmolive, but a

number of global and domestic players are present on the market as well. Counterfeit soap manufacturers sell products of

dubious origin to illiterate and unaware customers, threatening both people’s health and the originals’ brand equity, Gyan

commented.

Antiperspirants

and Deodorants

Deodorants have entered India as male grooming products, but rising demand from women has diversified the product range

available. Women’s deodorants accounted for 40% of the market in FY 2012, Gyan said. The leading brand in the segment is

AXE from HUL. Market players include Wipro, Yardley, Vini Group, Fogg and 18. Almost half of the annual deodorant sales

takes place between Mar and Sept, which is the hottest period in India, Feedback Analysis said in a Jul 2013 report. The

coastal cities account for the highest sales of deodorants, Feedback added.

Handwash

Hospitals and other institutions accounted for more than half of the handwash product sales in FY 2012, Gyan Research said.

Rising hygiene awareness has helped make handwash an increasingly popular product for household consumption as well.

The market is dominated by brands Dettol of Reckitt Benckiser and Lifebuoy of HUL, with shares of 53% and 30%,

respectively. Popular brands also include Santoor, Palmolive and Fem.

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Source:

Personal Hygiene Market

Oral Care Market in India

Antiperspirant and Deodorant Market in India

Bath & Shower Market

Handwash Market in India

Gyan Research and Analytics

736

795 859 928

1,019

8.02% 8.05% 8.03%

9.81%

0%

2%

4%

6%

8%

10%

12%

0

200

400

600

800

1,000

1,200

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Oral Care Market in India, USD mn % y/y change

122

124 125

127

130

1.64%

0.81%

1.60%

2.36%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

118

120

122

124

126

128

130

132

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Bath & Shower Market in India, USD mn % y/y change

92

123 164

205

240 33.70% 33.30%

25.00%

17.07%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

50

100

150

200

250

300

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Anti-Perspirant and Deodorant Market in India, USD mn % y/y change

8.7

13.8 21.9

34.7

55

58.62%

58.70%

58.45%

58.50%

58.30%

58.35%

58.40%

58.45%

58.50%

58.55%

58.60%

58.65%

58.70%

58.75%

0

10

20

30

40

50

60

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Handwash Market in India, USD mn % y/y change

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Source:

Personal Hygiene Market Forecast

Oral Care Forecast

Anti-Perspirant and Deodorant Forecast

Bath & Shower Market Forecast

Handwash Market Forecast

Gyan Research and Analytics

1,162

1,324 1,510 1,721

1,962 14.03%

13.94%

14.05%

13.97%

14%

13.88%

13.90%

13.92%

13.94%

13.96%

13.98%

14.00%

14.02%

14.04%

14.06%

0

500

1,000

1,500

2,000

2,500

FY 2013 F FY 2014 F FY 2015 F FY 2016 F FY 2017 F

Oral Care Forecast, USD mn % y/y change

145 163

182

204

229

11.54%

12.41%

11.66%

12.09%

12.25%

11.00%

11.20%

11.40%

11.60%

11.80%

12.00%

12.20%

12.40%

12.60%

0

50

100

150

200

250


Bath & Shower Forecast, USD mn % y/y change

288

346 415

498

597

20.00%

20.14%

19.94%

20.00%

19.88%

19.75%

19.80%

19.85%

19.90%

19.95%

20.00%

20.05%

20.10%

20.15%

20.20%

0

100

200

300

400

500

600

700


Anti-Perspirant and Deodorant Forecast, USD mn % y/y change

72

93

121 157

204 30.90%

29.17%

30.12%

29.75% 29.94%

28.00%

28.50%

29.00%

29.50%

30.00%

30.50%

31.00%

31.50%

0

50

100

150

200

250


Handwash Market Forecast, USD mn % y/y change

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Personal Care Highlights

Skincare

The Indian skincare market comprised some 980 brands in FY 2013, which made it the largest personal care segment,

Feedback Analysis said in a report. The premium skin-care market has been growing faster than the overall market. Skincare

demand in rural areas totaled some USD 172.6 mn in FY 2013, out of a total market size of USD 837 mn in the year. Hindustan

Unilever (HUL) exports its locally produced Lakme range of products to the Middle East and South-East Asia.

Color

Cosmetics

Some 92% of color cosmetics were sold in stores, and 8% was contributed by direct marketing in FY 2013, Feedback Analysis

said. Company using direct (network) marketing chains are Amway, Oriflame, Avon and Modicare. India imports most of the

color cosmetics sold domestically from Thailand, the USA, France, China and Germany. Hindustan Unilever (HUL) and Modi

Revlon are among the largest exporters. Export destinations include the UAE, USA, Nepal and Saudi Arabia. Key factors for

growth include low penetration, increasing awareness and the changing lifestyle and spending habits of Indians.

Natural

Cosmetics

Natural cosmetics are the fastest developing cosmetic segment in India, Feedback Analysis said in 2013, quoting the chamber

of commerce association ASSOCHAM. The European Union (EU) is the largest market for Indian Ayurvedic products and

companies Shahnaz Hussain and the Himalaya Drug Company are India’s largest natural cosmetic exporters. The raw

materials and manufacturing facilities for natural cosmetics are located in rural India which promotes employment and makes

the government encourages investments in the sector.

Fragrance

The organized sector, comprising some 30 players, accounts for some 70% of the fragrance market in India, Feedback

Analysis said in a report in Jul 2013. There are between 180 and 200 in the unorganized segment, the paper added. Men’s and

women’s fragrances account for 60% and 40% of the market, respectively. Teenagers are a significant customer group in both

male and female categories, as an average urban teenager spends between USD 10-40 on fragrance and deodorants. More

than half of the perfumes sold in a year are purchased as gifts.



Source:

Skincare

Skincare Market Trend

Skincare Market Break-Down by Segments, FY 2013

All India Skincare Market Size

Skincare Future Market Size

Feedback Business Consulting Services Pvt. Ltd.

532 596

667

747

837

12%

12.03%

11.91%

11.99%

12.05%

12%

12%

12%

12%

12%

12%

12%

0

100

200

300

400

500

600

700

800

900

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Skincare Market, USD mn % y/y change

Production (+) Exports (-) Imports (+) Domestic Market

FY 2013 757 60 140 837

FY 2011 622 45 90 667

All figures are in USD mn

Fairness (Illuminating, Whitening)

Creams 45%

Moisturizers 22%

Others 33% 837

937 1,050

1,175

1,317 1,475

12.05%

11.95%

12.01%

11.90%

12.09%

12.00%

11.80%

11.85%

11.90%

11.95%

12.00%

12.05%

12.10%

12.15%

0

200

400

600

800

1,000

1,200

1,400

1,600

FY 2013 FY 2014 F FY 2015 F FY 2016 F FY 2017 F FY 2018 F

Skincare Future Market Size, USD mn % y/y change



Source:

Color Cosmetics

Color Cosmetics Market Trend

Color Cosmetics Market Break-Down by Segments, FY 2013

All India Color Cosmetics Market Size

Color Cosmetics Future Market Size


340 450

522

606 32%

16.00% 16.09%

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

500

600

700

FY 2010 FY 2011 FY 2012 FY 2013

Color Cosmetics Market, USD mn % y/y change

606 702

814

944

1,096

1,270

16.09%

15.84%

15.95% 15.97%

16.10%

15.88%

15.70%

15.75%

15.80%

15.85%

15.90%

15.95%

16.00%

16.05%

16.10%

16.15%

0

200

400

600

800

1,000

1,200

1,400


Color Cosmetics Future Market Size, USD mn % y/y change


FY 2013 566 60 100 606

FY 2011 410 40 80 450


Nails 242.4

Lips 181.8

Face 109.1

Eyes 72.7

40%

12%

18% Hindustan Unilever was the largest

player in Color Cosmetics in FY

2013 with a market share of 29%.

Penetration of Color Cosmetics in

Urban Areas – 70% (FY 2013)

Rural Areas – 40% (FY 2013)

30%

Figures are in USD mn



Source:

Natural Cosmetics and Fragrance

Natural Cosmetics All India Market Size

Fragrance All India Market Size

Natural Cosmetics Future Market Size

Fragrance Future Market Size


Production (+) Exports (-) Domestic Market

FY 2013 1,407 182 1,225

FY 2011 1,000 120 880



FY 2013 280 140 200 340

FY 2011 142 55 75 162


340 480

660

860

1,120

1,460

36.0%

41.2%

37.5%

30.3% 30.2% 30.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

200

400

600

800

1,000

1,200

1,400

1,600


Fragrance Future Market Size, USD mn % y/y change

1,225

1,370 1,540 1,720

1,930

2,160 18.0%

11.8% 12.4%

11.7% 12.2% 11.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

500

1,000

1,500

2,000

2,500


Natural Cosmetics Future Market Size, USD mn % y/y change



Source:

Dishwashing and Laundry Care (graphs show Indian fiscal years)

Market Shares by Retail Value, Dishwashing Products, 2012

Dishwashing Product Highlights

Company Market Shares by Retail Value, Laundry Care, 2012

Laundry Care Highlights

Passport by Euromonitor International

Hindustan Unilever 60.4%

Jyothy Laboratories

16.4% Rohit Surfactants

6.1%

Ecof Industries 4.4%

Fena 3.1%

Pitambari Products 3.0%

Nirma 2.7%

Others 4.0%

Hindustan Unilever 38.3%

Rohit Surfactants 16.6%

Procter&Gamble Home Products

11.4%

Nirma 8.4% Jyothy

Laboratories 4.5%

Fena 2.6%

Reckitt Benckiser India 1.8%

Others 16.4%

The market for laundry care products totaled INR 136 bn in FY 2012

and is expected to reach INR 151 bn by FY 2017, Euromonitor said in

a report in Jul 2013.

Fabric conditioners are also gaining popularity. Manufacturers are

focusing on product innovation to keep brand loyalty and demand

high.

The average laundry detergent prices have gradually been rising,

Euromonitor commented.

The market for dishwashing detergents totaled INR 18 bn in FY 2012

and is expected to reach INR 21 bn by FY 2017, Euromonitor said in

a report in Jul 2013.

Consumers have noticeably been shifting from dishwashing bars to

liquid dishwashing products.

Rising demand and inflation have kept the average retail price of

dishwashing detergents rising, Euromonitor commented.



IV. Apparel and Footwear









Source:

Apparel Market

Indian Domestic Apparel Consumption, USD bn

Apparel Market Size of Major Economies, USD bn

Branded/Unbranded Apparel Market

Wazir Management Consultants, Sep 2012, Technopak analysis; IMAGES Business of Fashion;

350

150

225

110

40 37 45 25 20

73

411

366

316

127 124

87 75

34 31

100

33%

14%

21%

10%

4% 3% 4% 2% 2%

7%

0%

5%

10%

15%

20%

25%

30%

35%

0

50

100

150

200

250

300

350

400

450

EU-27 China United States Japan India Russia Brazil Canada Australia Others

Apparel Market Size in 2011, USD bn Apparel Market Size Forecast, 2020, USD bn % of Global Apparel Market in 2011

Global Apparel Market Size 2011 – USD 1,075 bn

Global Apparel Market Size 2020 F – USD 1,670 bn

25 27 31 35 40

124

8.0%

14.8%

12.9%

14.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

20

40

60

80

100

120

140

2007 2008 2009 2010 2011 2020 F

Indian Domestic Apparel Consumption, USD bn % y/y change

5

11

18

30

4

10

20

31

Branded, USD bn Unbranded, USD bn Branded, USD bn Unbranded, USD bn

2011 2020 F

Men Women

Share of Modern Retail in Total Apparel Market in

2012 – 20%

2017 F – 28.6% (Source: Technopak Analysis)



Source:

Apparel Market (cont’d)

Footwear and Accessories Market, 2012, USD bn

Men's and Womenswear Market Forecast

Brand Mix in Modern Apparel Retail, 2012

Boy's and Girlswear Market Forecast

Technopak Analysis; IMAGES Business of Fashion;

6

2

Footwear and Accessories Market,2012, USD bn

Total Market Modern Retail

Modern Retail 27%

Footwear and Accessories Market by

Retail Format, 2012

Traditional Retail 73%

Domestic

Brands 82%

International

Brands 18%

2012 2017 F

International

Brands 25%

Domestic

Brands 75%

809.4

1,203.5

1,828.0

720.4

1,114.5

1,753.0

2011 Est.

2016 Proj.

2021 Proj.

Womenswear Market Size Projections, INR bn

Menswear Market Size Projections, INR bn

194.3

317.7

522.3

178.9

304.3

519.2

2011 Est.

2016 Proj.

2021 Proj.

Girlswear Market Size Projections, INR bn

Boyswear Market Size Projections, INR bn



Source:

Athletic Apparel and Footwear (graphs show Indian fiscal years)

Asia-Pacific Athletic Apparel Market by Geography, %

India Athletic Apparel and Footwear Market Size and Forecast

Asia-Pacific Athletic Footwear Market by Geography, %

Athletic Apparel and Footwear Market in India

Ken Research

28.5% 32.3% 37.4% 41.4% 42.5%

43.9% 39.7% 36.3% 32.6% 29.0%

5.8% 5.9% 4.8% 4.2% 3.7%

2.2% 2.2% 2.6% 3.0% 3.2%

19.6% 20.0% 18.8% 18.8% 21.6%

0%

20%

40%

60%

80%

100%

120%

2008 2009 2010 2011 2012

Others

India

Australia

Japan

China

39.7% 43.2% 47.3% 49.7% 46.9%

28.8% 26.4% 24.2% 21.7% 19.1%

6.5% 6.5% 5.2% 4.4% 3.7%

3.1% 3.0% 3.4% 3.8% 4.0%

21.9% 20.9% 19.8% 17.9% 26.2%

0%

20%

40%

60%

80%

100%

120%

2008 2009 2010 2011 2012

Others

India

Australia

Japan

China

Unorganized

80% Reebok 34.6%

Adidas 21.1%

Puma 12.2%

Nike 14.5%

Fila 5.0%

Others 12.6%

Market

Shares of

Major

Players, 2011

Organized

20%

2012

361.

4

452

558.

2

682.

7 822

960.

1

1,13

8.60

1,33

6.80

401.5 501

618.5 758.8

915

1,120.80

1,327.20

1,568.00

2010 2011 2012 2013 F 2014 F 2015 F 2016 F 2017 F

Athletic Apparel, USD mn Athletic Footwear, USD mn



Source:

Other Apparel (graphs show Indian fiscal years)

India Athletic Apparel and Footwear Market by Gender, 2012

Penetration of Worldwear in India, 2012

Worldwear Market in India, USD bn

Denim Market in India, USD mn

Ken Research; Technopak Analysis; IMAGES Business of Fashion;

Men 52.6%

Women 29.5%

Kids 17.9%

Men 57.1%

Women 28.4%

Kids 14.5%

Footwear Apparel

58%

48%

11%

12%

15%

19%

16%

21%

2012

2017 F

Unbranded Mass Market Mid-Premium Premium/Luxury

Total 2017: USD 2,530 mn

Total 2012: USD 1,290 mn

17

25

4

7

4

7

2012

2017 F

Men's, USD bn Women's, USD bn Kids', USD bn

Total 2012: USD 25 bn

Total 2017: USD 39 bn

Walking and Running Footwear 2012: 45.7%;

Lifestyle Footwear 2012: 17.6%

Worldwear

60%

Other Apparel

40%

Other

Worldwear

52%

Casualwear

48%



V. Consumer Durables









.

…

Source:

Consumer Electronics and Home Appliances – SWOT Analysis

The strengths of the Indian consumer electronics and home appliances

sector include low level of penetration of appliances, a vast unsaturated

rural market, a large share of young population with access to rising

disposable incomes (13 million young people join the workforce every

year), urbanization, the rise in the number of double-income families,

the strengthening of the middle class and the increasing demand for

modern housing and appliances.

Most of the Indian-made consumer durables are for the domestic market and thus are not eligible for tax refunds. As a result, the heavy multiple-level taxation in the country is a major factor stalling innovation and growth. As of mid-Sep 2013, the Goods and Services Tax (GST) has not been implemented, despite having been in the works since 2009. Other weaknesses include rising inflation; seasonal demand and uncertain power supply esp. in rural India; underdeveloped organized distribution networks and slow and uncertain transportation infrastructure.

The intense competition among players make them incur huge branding

and advertising expenses which lower their profit margins. In addition,

the rising of raw material prices results in higher production costs and

the rapid changes in technologies make product lifecycle short. The

entry of low-priced products by private labels of organized retailers is

likely to lower market shares of both domestic manufacturers and global

companies.

Rural development will secure growth at entry level and the rising

numbers of the middle class will encourage development in the high-

end segment. The aggressive pricing policies and the easy finance

options offered by manufacturers boost sales among price-sensitive

consumers, while media and advertising provide increasing

consumer awareness.

SWOT

Analysis

Strengths Opportunities

Weaknesses Threats

Company annual reports;



Source:

Consumer Durables Snapshot

Consumer Durables Market Size

Penetration of Consumer Durables in India

Market Segmentation - Consumer Durables, FY 2012

Consumer Durable Sales

Netscribes; ASSOCHAM; capitaline.com; Corporate Catalyst India (CCI); CRISIL Opinion Sept 2012;

Refrigerators

42%

Flat Panel TV

16%

Microwave

6%

AC

15%

340

375 415.3 463.1

520

10.29%

10.75%

11.51%

12.29%

9%

10%

10%

11%

11%

12%

12%

13%

0

100

200

300

400

500

600

FY 2011 FY 2012 FY 2013 Est. FY 2014 F FY 2015 F

Consumer Durables Market Size, INR bn % y/y change

77%

33%

17%

13%

3.80%

TV

Refrigerator

Air Cooler

Washing Machine

Air-Conditioner

Penetration of Consumer Durables inUrban India (data published Dec 2012)

25%

17%

4%

TV Refrigerator AirConditioner

Penetration of Consumer Durables inRural India

Source: Netscribes report, Jan 2012

Domestic

Companies

35%

Multinational

Companies

(MNCs) 65%

Data Published Mar 2012

Washing

Machines

21%

Source: capitaline.com

Data publ. Dec 2012

19% 22% 29% 33%

52%

81% 78% 71% 67%

48%

0%

20%

40%

60%

80%

100%

120%

FY 2009 FY 2010 FY 2011 FY 2012 FY 2017 F

Low-ValueProducts

High-ValueProducts



Source:

White Goods (graphs show Indian fiscal years)

Air Conditioner Sales in India

Refrigerator Market in India

Washing Machine Market in India

Dishwasher Market in India

capitaline.com; Euromonitor International; Netscribes Jan 2013;

2.2

2.8 3.6

3.1

3.5

27.30% 28.60%

-13.90%

12.90%

-20%

-10%

0%

10%

20%

30%

40%

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2008 2009 2010 2011 2012 Proj.

Air Conditioner Sales in India, million units % y/y change

6

73

10.4

158

Washing MachineSales, mn units

Washing MachineSales, INR bn

2012 2017

Figures for 2017 are approximate

97.69

169

2010 2014 F

Refrigerator Market in India, INR bn

LG 35%

Godrej 18%

Others 47%

Company Market Shares, 2011

Others 26.20%

LG

Electronics

India 24.8%

Samsung

India

Electronics

24.8%

Videocon Industries

13.9%

Whirlpool

of India

11.90%

2012

32,000

886

82,000

1,800

DishwasherSales, units

DishwasherSales, INR mn

2012 2017

Figures for 2017

are approximate

Others 17.90%

IFB Industries

51.5%

LG Electronics

India 10.80%

Ele

ctro

lux

8.70

%

BSH

Bosch &

Siemens

Hausgeraete

8.60%

Samsung India Electronics

2.50%

2012



Source:

Brown Goods (graphs show Indian fiscal years)

Microwave Oven Market Size

Vacuum Cleaner Market in India

Iron Market in India

Food Preparation Appliance Market in India

Netscribes Apr 2013; Euromonitor International;

1.5 1.7 2.1 2.6 3.4 4.4

11.5 14.6

18.8

24.5

32.6

43.6

2011 2012 2013 Est. 2014 F 2015 F 2016 F

Microwave Oven Market Volume, mn units Microwave Oven Market Value, INR bn

Philips

Electronics

India

13.10%

Maharaja

Appliances

8.2%

Preethi

Industries

7.40% Sujata

Enterprise

5.70%

Usha

International

3.2%

Inalsa

Appliances

4.5%

2012

Bajaj Electricals

15.7%

6.0

12.0

9.2

17.0

Food PreparationAppliance Sales, mn

units

Value of FoodPreparation Appliance

Sales, INR bn

2012 2017

Figures for 2017

are approximate

439.0

21.0

600.0

27.0

Vacuum CleanerSales, thou units

Value of VacuumCleaner Sales, INR

bn

2012 2017

Figures for 2017

are approximate

Eureka Forbes

Ltd. 73.30%

Others 18.80%

2012

LG Electronics

India 5.5%

Philips Electronics

India 2.4%

Ajanta 5.20%

Others 23.00%

2012

Bajaj

Electricals

25.60%

Philips

Electronics

India

13.30%

Usha Intl

10.60%

Crompton

Greaves

9.90%

Inalsa

Appliances

6.40%

Kitchen

Appliances

India 6.00%

12

7,800

16.8

10,400

Iron Sales, mn units Value of Iron Sales,INR mn

2012 2017

Figures for 2017

are approximate



Source:

Consumer Electronics

Personal Computer Market in India

TV Market in India

Mobile Handset Market in India

Digital Camera Market in India

CEIC; CyberMedia Research (CMR); BuddeComm; Netscribes Jan 2012;

2.5 3.4 4.1 5.5 7.4 10 17.5

25

35.7

51

72.9

104.1

FY 2010 FY 2011 FY 2012 Est. FY 2013 F FY 2014 F FY 2015 F

Digital Camera Sales, mn units Digital Camera Sales, INR bn

5.28 5.53 6.03

6.71 6.77

1.52

2.51

3.28

4.02

4.40

5.49 5.75

6.16

6.84

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Desktop Sales, mn units Notebook Sales, mn units Monitor Sales, mn units

Unit Shipments Jan-Apr 2013, millions % y/y change

Mobile Handsets 73.5 11.10%

Featurephones 94.1 2.40%

Smartphones 9.4 167.30%

Mobile Handset Leading Players Jan-Apr 2013

Market Share

Nokia 20.30%

Samsung 14.20%

Micromax 8.90%

TV and Broadcasting in India, 2012 Units

TV Receivers 175 million

TV Households 130 million

TV Household Penetrartion 52%

Cable TV Households 95 million

Source: BuddeComm estimates based of ITU, TRAI and industry data



Source:

Consumer Durable Financing in India

Consumer Durable Loans

Consumer Durable Loans by Product, FY 2012

Finance Penetration for Consumer Durables

Consumer Durable Financing by Regions, FY 2012

CRISIL Opinion Sept 2012

45

124

FY 2012 FY 2017

Consumer Durable Loans, INR bn

10%

15%

FY 2012 FY 2017

Finance Penetration for Consumer Durables, %

Panel TV 46%

Split Air-Conditioner 20%

Refrigerator 17%

Washing Machine 5%

CRT TV 1%

Others 11%

Southern, Western Regions 60%

Other Regions 40%

High-value products

account for 2/3 of the total

consumer durable

financing in the Southern

and Western regions.



VI. Other Segments









Source:

Pharmaceuticals

Indian Drug Retail Market

Drug Retail Market Segmentation

OTC Market in India

OTC and Prescription Drug Sales Segmentation, 2012

Netscribes May 2013;

140 157.8

178.6 203.3

232.7

268.1

12.71%

13.18%

13.83%

14.46%

15.21%

11%

12%

12%

13%

13%

14%

14%

15%

15%

16%

0

50

100

150

200

250

300

FY 2012 FY 2013Est.

FY 2014 F FY 2015 F FY 2016 F FY 2017 F

OTC Market in India, Inr bn % y/y change

542 640.7

759.2

901.2

1,071.50 1,275.10

18.21%

18.50%

18.70%

18.90% 19%

18%

18%

18%

18%

19%

19%

19%

19%

0

200

400

600

800

1,000

1,200

1,400

FY 2011 FY 2012Est.

FY 2013 F FY 2014 F FY 2015 F FY 2016 F

Indian Drug Retail Market, INR bn % y/y change

OTC Drugs 15%

Prescription Drugs 85%

7% 8% 10% 11% 13% 15%

93% 92% 90% 89% 87% 85%

0%

20%

40%

60%

80%

100%

120%

FY 2011 FY 2012Est.

FY 2013 FFY 2014 FFY 2015 FFY 2016 F

Unorganized, %

Organized, %



Source:

Motor Vehicles (graphs show Indian fiscal years)

Total Vehicle Sales Annual Domestic Vehicle Sales (Excluding Exports)

CEIC; Society of Indian Automobile Manufacturers (SIAM);

1,578.43 1,768.28 1,888.43 2,397.48 2,945.87 3,125.39 517.30 549.49

426.82

577.73

758.95 902.20 547.81 506.01 497.79

613.61

795.99 876.13 8,491.98 8,068.99 8,441.79

10,511.01

13,300.53

15,382.97

2007 2008 2009 2010 2011 2012

Two-WheelerSales,thousands

Three-WheelerSales,thousands

CommercialVehicleSales,thousands

PassengerVehicleSales,thousands

20,286.68

11,135.52 10,892.77 11,254.84

14,099.82

17,801.34

The difference between annual values in

the left and right graph represent the

respective annual vehicle exports.

1,379.98 1,549.88 1,552.70 1,951.33 2,501.54 2,618.07

467.77 490.49 384.19 532.72

684.91 809.53 403.91 364.78 349.73

440.39

526.02 513.25

7,872.33 7,249.28 7,437.62

9,370.95

11,768.91

13,435.77

2007 2008 2009 2010 2011 2012

DomesticTwo-WheelerSales,thousands

DomesticThree-WheelerSales,thousands

DomesticCommercialVehicleSales,thousands

DomesticPassengerVehicleSales,thousands

17,376.62

10,123.99 9,654.44

9,724.24

12,295.40

15,481.38



Source:

Luxury Goods

Indian Luxury Goods Market

Luxury Goods Market in India by Segments, 2011

Luxury Goods Market of Selected Countries

Technopak report, Sept 2011; Bain & Company (Fondazione Altagamma) 2012;

Brazil India South

Africa

SouthEast

Asia***

Population 2011 190 million 1.2 billion 51 million 560 million

% of World Population 2.80% 17.50% 0.70% 8.10%

UHNWI* 2011 4,600 7,700 800 4,300

HNWI** 2011 165,000 125,000 ~70,000 ~200,000

Luxury Goods Market 2012

Est EUR 2.7 bn EUR 1.0 bn EUR 0.8 bn EUR 4.8 bn

% of Global Market 1.30% 0.50% 0.40% 2.30%

Expected Growth over next

5 years 15-25% 20-30% 20-30% 15-25%

UHNWI is Ultra-High Net Worth Individuals

HNWI is High Net Worth Individuals

SEA includes all APAC countries, except for Greater China, South Korea, India and Japan.

3 3.6

4.3 5

5.8

6.8

2010 2011 2012 Est. 2013 F 2014 F 2015 F

Indian Luxury Goods Market, USD bn

Luxury Assets 65%

Luxury Services 22%

Luxury Products 13%



VII. E-Commerce (B2C)









E-Commerce Highlights

Growth

E-commerce in India has evolved noticeably over the past years in terms of market turnover, usage patterns and the range of

services offered. The total e-commerce business in the country, including retail and other products and services such as travel

and financial services, was estimated at USD 10 billion in 2012 and is seen to grow by some 33% by end-2013, data by

Technopak and the Internet and Mobile Association of India (IMAI) showed.

Users

In Mar 2013, India reported the world’s third-largest Internet population, jumping 31% y/y to 73.9 million people, comScore said

in a report. About ¾ of India’s online population was aged under 35 as of Jun 2013. Men generally surf more and longer than

women, but women aged 35-44 are among the heaviest Internet users. Some 60% of Indian web users visit e-tailing sites, but

the time spent on online shopping is low compared to other countries.

Drivers

Factors encouraging the development of e-commerce and e-tailing in India include rising discretionary spending, a rapidly

growing middle class with aspirational consumption patterns, a growing online consumer base, which is estimated to comprise

180 million broadband users by 2020, and a burgeoning class of mobile internet users. Cost saving, convenience and the 24/7

availability of online products and services are also beneficial to their future growth.

Outlook

E-tailing, which is selling retail goods on the Internet and is a segment of e-commerce, is set to touch USD 76 bn by 2021 in

India, The Times of India reported in Jan 2013, quoting a study by Technopak. The Internet and Mobile Association of India

(IMAI) expects the consumer potential of e-commerce to reach 228.6 million households in FY 2025, from 146.2 million

households in FY 2010. E-tailing is set to capture 5.3% of the total retail market by 2021, from 0.1% in 2012, Technopak added.

Challenges

Companies wishing to sell to consumers online should strive to develop innovative services and delivery models and set up

high standards of quality and safety for delivery, returns and payments, IMAI commented. The government should work to

improve infrastructure, raise broadband connectivity, carry out fiscal and regulatory reforms and provide digital literacy training

for low-income groups.



Source:

E-Commerce in India Snapshot

Digital Commerce Trend

Penetration of Online Retail, as of Jun 2013

Components of Digital Commerce Market in 2012

India's Online Population as of Mar 2013

informationweek.in; Internet and Mobile Association of India (IMAI); comScore Media Metrix, Mar 2012 - Mar 2013, Jun 2013;

192.40

262.65

351.42

473.49

629.67 37%

34%

35%

33%

31%

32%

33%

34%

35%

36%

37%

0

100

200

300

400

500

600

700

as of Dec 2009 as of Dec 2010 as of Dec 2011 as of Dec 2012 as of Dec 2013,F

Digital Commerce Turnover, INR bn y/y growth, %

Online Travel 71%

E-Tailing 16%

Financial Services 6%

Classifieds 5%

Other Online Services 2%

74.4%

84.1%

60.3% 62.7%

77.3%

84.3

168.2

28.4 36.9

58.5

0

50

100

150

200

0%

20%

40%

60%

80%

100%

Worldwide China India Russia Brazil

Penetration of Online Retail in India and the World, as of Jun 2013

Average Time Spent on Online Retail Activities, as of Jun 2013

55.2% 54.0%

9.3% 11.5%

12.2% 11.4%

9.4% 9.6%

13.9% 13.5%

0%

20%

40%

60%

80%

100%

120%

As of Mar 2012 As of Mar 2013

Rest ofAPAC

SoutheastAsia

Japan

India

China

Total 644 Million Total 604 Million



Source:

E-Tailing Data

E-Tailing Penetration by Segments, as of Jun 2013

Unique Visitor Data for Selected Domestic E-Tailers, as of Jun 2013

Three-Month Growth in Online Retail, as of Jun 2013

comScore Media Metrix, Jun2013

13,173 12,649 12,425

11,924

8,447 8,109

6,092

6

16.2

6.3 7.6 7.8

3.1 1.9

0

2

4

6

8

10

12

14

16

18

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

myntra.com flipkart.com jabong.com Amazon Sites snapdeal.com homeshop18.com Indiatimes Shopping

Unique Visitors, thou persons Minutes per Visitor

+151% +119% +10% +31% +124% +77%

y/y Increase in Unique Visitors

+156%

7%

8%

11%

13%

15%

16%

21%

Retail - Movies

Healthcare

Computer Hardware

Consumer Electronics

Comparison Shopping

Computer Software

Apparel

Penetration of Retail Categories in Digital Commerce, %, as of Jun 2013

80%

26%

25%

18%

17%

Retal - Food

Tickets

Jewelry/Luxury Goods/Accessories

Fragrance/Cosmetics

Healthcare

Three-Month Growth in Online Retail, %, as of Jun 2013



Source:

Comments

E-Commerce – Ecosystem and Challenges

Challenges the Indian e-commerce has to overcome to boost its share on the retail market include:

Connectivity: low and costly broadband penetration, low computer ownership, low digital literacy;

Payments: poor payment gateway infrastructure, low levels of debit/credit card penetration, low levels of financial inclusion;

Delivery: poorly developed supply chain sector, inefficient postal system;

Regulatory: taxes on trade and commerce are complex and vary across states, which makes business operations of companies with

innovative models very difficult.

The E-Commerce Ecosystem is Intricately Interconnected

Internet and Mobile Association of India

TRANSACTION BUSINESS

Products/Services

CONSUMER

Demand/Ability to Pay

Delivery

Infrastructure

Connectivity

Infrastructure

Regulatory

Infrastructure Payments

Infrastructure

Supply chain:

Warehousing and

Infrastructure

Broadband and

Networking

State/Local Taxes, Sector

Regulations Digital Payments and

Gateways



VIII. Major Players









Source:

Top M&A Deals

Top M&A Deals in the Indian Retail Sector in the Past Year

DealWatch;

Date Target Company Deal Type Buyer Seller Deal Value

USD (mn) Stake %

Jul 10, 2013 Flipkart Online Services Minority Stake Purchase;

PE Entry; VC Entry Accel Partners,Iconiq Capital, Naspers Ltd.,Tiger Global, N/A 200.00 N/A

Jun 7, 2013 Snapdeal.com Minority Stake Purchase;

PE Entry; VC Entry

Bessemer Venture Partners, IndoUS Venture Partners, Intel Capital, Nexus

Venture Partners, Recruit Holdings Co. Ltd., Saama Capital, eBay China, ruNet

Holdings

N/A 140 N/A

Aug 13, 2013 Snapdeal.com Minority Stake Purchase Softbank Corp N/A 75 N/A

Sep 27, 2012 Woolworth's Wholesale India

Pvt. Ltd. Acquisition Infiniti Retail Ltd. Woolworths Ltd. 37.55 100%

Jan 22, 2013 Pantaloon Retail India Ltd. Block Trade, PE Entry Goldman Sachs Capital Partners, Morgan Stanley Kotak Securities Ltd. 25.29 2.40%

Sep 17, 2013 Trent Ltd. Open Market Purchase Arisaig Partners Asia N/A 18.38 2%

Feb 6, 2013 V-Mart Retail Ltd. IPO N/A N/A 17.83 32%

Apr 11, 2013 TV18 Shopping Network Ltd. Minority Stake Purchase OCP Asia Ltd. N/A 15 5%

Apr 25, 2013 Big Shoe Bazaar India Pvt.

Ltd.

Minority Stake Purchase;

PE Entry; VC Entry

Catamaran Ventures, Fidelity Growth Partners India, Nexus Venture Partners,

Qualcomm Ventures, N/A 12 N/A

Apr 10, 2013 Hoopos.com Acquisition BabyOye.com N/A N/A 100.00%

Apr 10, 2013 BabyOye.com Minority Stake Purchase;

PE Entry; VC Entry Accel Partners, Helion Venture Partners, Tiger Global, N/A 12 N/A

Apr 2, 2013 Pepperfry.com Minority Stake Purchase,

VC Entry Norwest Venture Partners (NVP) N/A 8 N/A

Apr 5, 2013 Fintiquette.com Acquisition Myntra.com N/A N/A 100.00%



Source:

Bharti Retail Pvt. Ltd.

Bharti Retail Net Sales, INR bn

Bharti Retail is a wholly-owned company of the Bharti

Enterprises industrial conglomerate, which also operates

in the telecom, real estate and insurance sectors.

Bharti Retail operates hypermarket and convenience

stores under the Easyday and Easyday Market brands.

The company had a 1.8% market share in 2012 and

ranked 11th in grocery retailing in India, Euromonitor

International said in a Jul 2013 report.

Bharti Retail’s stores are mainly located market areas in

Tier 2 cities in northern and western Indian states.

In 2012, Bharti Retail added a new store in Andhra

Pradesh to its few other outlets in southern India,

Euromonitor International said.

The company has a wide private label portfolio of both

grocery and non-grocery products. The company also

sells goods under the Walmart private labels Great Value

and George.

In April 2012 Bharti Retail signed an agreement with

Naturals Salon and Spa, owned by Chennai-based Groom

India Salon & Spa Pvt Ltd. Under the contract, Naturals

Salon and Spa outlets will open in 250 Easyday outlets by

2015.

Stores and Private Labels

Company data; Passport by Euromonitor International;

2.9

3.6

4.6

2009 2010 2011

Net Sales, INR bn

The first Easyday store was launched in Ludhiana and Easyday Market -

in Jalandhar, in 2008. In 2012, the company operated more than 210

stores in the states of Punjab, Haryana, Uttar Pradesh, Uttarakhand,

Madhya Pradesh, Rajasthan, Himachal Pradesh, Chhattisgarh, NCR

Delhi, Jammu & Kashmir, Maharashtra and Karnataka.

Bharti Retail’s private label portfolio comprises Home Trends and

Mainstays (furniture and homeware), Kid Connection (toys, games and

apparel), Faded Glory (footwear), Athletic Works (sportswear), Easy

Choice (groceries), Equate (beauty and personal care) and Astiva and

Simply Basic (Apparel).



Source:

Carrefour Wholesale Cash & Carry India Pvt. Ltd.

Current Operating Income by Geographic Region, 2012, EUR mn

French company Carrefour, established in 1959, is

Europe’s largest and the world’s second-largest retailer.

The group operates four grocery store formats:

hypermarkets, supermarkets, cash&carry and

convenience stores.

In Dec 2010, Carrefour opened in New Delhi Carrefour

Wholesale Cash&Carry - its first store in India. In 2012,

the company operated a total 4 cash&carry stores in the

country – in Delhi, Jaipur, Agra and Meerut, the global

retailer’s most recent Annual Report said.

Carrefour plans to open eight to 10 wholesale stores in

India, doubling its network in the country, and is searching

for potential locations, livemint.com reported on Aug 9,

2013. The company has adopted a wait-and-see attitude

after the Indian government allowed 51% FDI in multi-

brand retail and has still not made any steps toward

opening retail stores in the country.

Besides India, Carrefour is present in two other Asian

markets - China and Taiwan. As of December 2012, it had

218 hypermarkets in China and 61 hypermarkets and

three supermarkets in Taiwan, the Business Standard

reported on May 13, 2013.

Over the past few months, Carrefour has withdrawn from

key Asian markets like Singapore, Malaysia and

Indonesia, to reduce debt and generate cash flow. Among

other countries, it has exited from Colombia and cut stake

in its Turkish business.

Carrefour SA’s Net Sales by Geographic Region, 2012, EUR mn

Carrefour SA 2012 Annual Report; Livemint.com; The Business Standard;

France 35,341

Europe (excl. France) 20,873 Latin America

14,174

Asia 6,400

929

509 608

168

-74

France Europe (excl.France)

Latin America Asia Global Functions

Current Operating Income by Geographic Region, 2012, EUR mn



Source:

TESCO/Trent

Trent Financial Performance (Standalone)

British giant Tesco is one of the world’s largest retailers

and the grocery market leader in the UK, Malaysia, the

Republic of Ireland and Thailand.

In India, the company operates a wholesale business in

Mumbai – Tesco Hindustan Wholesaling Pvt Ltd. (THWPL)

- which supplies products to Star Bazaar – a chain of

stores operated by Trent, which is the retail arm of the

industrial conglomerate Tata Group. Tesco has a franchise

arrangement with Trent to help with the growth of the Star

Bazaar chain.

Tesco also has two offices in Bangalore and Delhi, which

source over £270 mn worth of products a year from India.

Tesco’s Hindustan Service Centre (HSC), which employs

over 6,000 people and supports ongoing worldwide

operations, is located in Bangalore, Karnataka.

Tata Group’s subsidiary Trent owns and manages a

number of retail chains in India. Established in 1998 and

headquartered in Mumbai, Trent runs fashion & lifestyle

chain Westside; hypermarket chain Star Bazaar; book-and-

music chain Landmark and Fashion Yatra, a value-for-

money family fashion store.

As of Mar 31, 2013, Trent and its subsidiaries had 116

stores across all formats, the company said in a corporate

filing. For 2012, Trent reported a consolidated net income

of INR 21,320.3 mn and a net loss of INR 379.5 mn. Trent

employed a total 6,407 at end-Mar 2013.

Performance of Trent Brands

Bombay Stock Exchange; tescoplc.com; Trent Annual Report 2012-13;

5,874.81

7,167.12

8,217.93

9,358.04

402.

2

430.

37

472.

67

622.

59

2009 2010 2011 2012

Net Sales, INR mn Net Profit, INR mn

2010 2011 2012 Number of Employees 2012

Westside 54 67 70 2,863

Star Bazaar 11 15 15 2,516

Landmark 19 719

6,480 7,810

2,230 2,000

2011 2012

Star Bazaar Revenue from Operations, INR mn

Landmark Revenue from Operations, INR mn



Source:

IKEA

IKEA India Ltd.

Swedish furniture maker IKEA is in the process of

purchasing land in the states of Andhra Pradesh,

Maharashtra, Haryana and Karnataka, to house its stores

in India, the Wall Street Journal reported on Aug 12, 2013.

IKEA’s first store in the country might open in four to five

years, WSJ added, quoting company CEO Mikael

Ohlsson.

Indian Trade Minister Anand Sharma and Ohlsson held a

closed-door meeting on Aug 12 to discuss the furniture

maker’s plans in the country.

IKEA said it would spend some INR 105 bn, or USD 1.72

bn, to open 25 stores across India, after its government

allowed 100% foreign ownership in single-brand retail

stores in late 2011.

The company applied to open stores in India in June 2012

and received an approval in May the following year.

Before actual construction works begin, the company’s

stores would have to be approved by the authorities of the

respective states in which they will be located.

As part of its setting foot in India, IKEA will enhance its

local sourcing of products made of bamboo, hand-loom

fabrics and handicrafts. It has also started working with

the Indian National Institute of Design on developing

products for the local market, WSJ and firstpost.com

reported.

Number of IKEA Stores in Selected Countries

Wsj.com; firstpost.com; Economic Times;

46

38

28

25

18

14

11

Germany

U.S.

France

India (as planned)

UK

Russia

China

IKEA has already incorporated an Indian subsidiary called IKEA India

Ltd, firstpost.com reported on Aug 13, 2013. IKEA has sought injunction

orders from Indian courts against a dozen domestic companies whose

names sound similar to IKEA, regardless of their lines of business, the

Economic Times reported on Sep 17, 2013. Two such companies are

Aikiya Global, a Bangalore-based events and communications company,

and IKYA Human Capital Solutions, an HR firm.

After months of discussions between IKEA officials and Indian

authorities, the company has been allowed to run cafes and restaurants

within its single-brand stores in India, but would not be able to sell

packaged food. The reason for the ban, announced in early 2013, was

that the single-brand retail policy, under which IKEA’s application had

been filed, disallowed retailing of food.



Source:

Future Retail Ltd.

Pantaloon Retail Financial Performance

Future Retail Ltd., formerly Pantaloon Retail, is a

subsidiary of Indian industrial conglomerate Future Group

and a major Indian retailer. The company officially changed

its name in Mar 2013.

In the 18 months that ended on Dec 31, 2012, Pantaloon

Retail underwent major consolidation and realignment,

aimed at streamlining its business activities and dealing

with the consumption and economic slowdown that had

affected India in the period.

The company divested its investments in non-core areas

like financial services and demerged its highly successful

fashion & lifestyle format Pantaloons to Aditya Birla Nuvo.

The Competition Commission of India (CCI) approved the

deal in Dec 2012, livemint reported.

Under its revised strategy, the business of Future Retail

has been consolidated under three verticals – Hypermarket

Retail (including Home Improvement), Fashion and Food.

Three distinct companies were formed - Future Retail,

Future Lifestyle Fashions (FLF) and Future Ventures,

respectively.

In addition, the company carried out an extensive

renovation of a large number of stores to improve customer

experience and brand positioning.

During the 18 months that ended on Dec 31, 2012, the

company attracted over 433 million customer footfalls,

which meant that stores registered 24 million customer visit

each month.

Future Retail Quarterly Financial Performance

Company data; livemint.com;

Note: The financial results of the two accounting periods are not comparable.

67.72

39.42

2.73 0.77

18 months ended Dec 31, 2012 12 months ended Jun 30, 2011

Sales (Net of Taxes), INR bn Profit After Tax, INR bn

3,457.40

9,406.90

-94.60

24.70

3 Months Ended Jun 30, 2013 3 Months Ended Mar 31, 2013

Total Income From Operations, INR mn Net Profit (Loss) of the Period, INR mn



Highlights

Source:

Reliance Retail

Reliance Retail Financial Data

Reliance Retail Performance

Reliance Retail, a wholly-owned subsidiary of Reliance Industries, and India’s second-largest retailer after Future Retail, was set up in 2006 in Mumbai. At the end of FY 2013 on Mar 31, 2013, the company operated 1,466 stores across 129 cities and over 9.0 million sq ft of retail area.

During its strategic phases, internally named Reliance Retail 1.0, 2.0 and 3.0, the company has established businesses under value, digital, lifestyle, jewelry and brands formats, the Business Standard reported in Jul 2013.

At the end of Reliance 3.0 on Mar 31, 2013, some 56% of Reliance Retail’s INR 108 bn revenue, came from its value and grocery chain segments.

At Reliance Retail’s Annual General Meeting in Jun 2012, the company said it would invest some INR 400 bn - 500 bn in the next three to four years, the Business Standard added.

The company has identified the cash-and-carry business as its growth driver, as it provides higher volumes and higher Return on Capital (RoC).

By opening its cash-and-carry store Reliance Market in Ahmedabad in Sep 2011, Reliance Retail became the first Indian retailer to enter the cash-and-carry business, dominated by multinationals such as WalMart, Metro and Carrefour.

Under Reliance Retail 4.0, the cash-and-carry store Reliance Market is to become a separate vertical.

Company data; the Business Standard;

5.84

2.76

5.81

-0.2

0.18

-0.24

2008 2009 2010

Net Turnover, INR bn Net Profit/Loss, INR bn

2011 2012

Total Revenue, INR bn 76.00 108.00

EBITDA, INR bn -0.34 0.78

No. of Jewelry Stores 37 51

No. of Brand Stores 49 68

No. of Digital Stores 93 139

No. of Fashion & Lifestyle

Stores 353 448

No. of Value & Other Stores 750 760

Total No. of Stores 1,282 1,466

Source: Company announcements, Business Standard (Jul 22, 2013);



Contact:

Corporate Headquarters

Nestor House

Playhouse Yard

London EC4V 5EX

UK

Voice: +44 207 779 8471

Fax: +44 207 779 8224

Americas Headquarters

225 Park Avenue South

New York, New York 10003

US

Voice: +1 212 610 2900

Fax: +1 212 610 2950

Asia Headquarters

Eucharistic Congress Bldg. No.

III

4th Floor, 5 Convent Street

Mumbai 400 001

India

Voice: +91 22 22881123

Fax: +91 22 22881137

Disclaimer:

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Investor PLC take no responsibility for decisions made on the basis of these opinions.

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