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8/7/2019 Retail Industry com
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INDIAN RETAIL INDUSTRY
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Organized Vs Unorganized Retail Sector
Organized Retail Sector Unorganized Retail Sector
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Organized Vs Unorganized Retail Sector
Factor Organized Retail Sector Unorganized Retail Sector
Definition Modern form of retailing Traditional form of retailing
Examples Hypermarket, Retail chain etc.
Mom n Pop stores, hand cart, pavement vendors etc
Market Share 3% 97%
Market Growth 35% 6%
Challenges Poor supply chain
management, aggressive
expansion etc.
Use of labour intensive
technology, lack of
government support etc.
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Retail Trade India, USA, China
Country Trade ($b) Employment Shops (mn) Organized
sector
India 180-394 7 1.2 2-3
China 360 12 2.7 20
UAS 3800 12.6-16 15.3 80
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Key Growth Drivers
� Economic Growth
� Demographics
� Urbanization
� Credit availability
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Retail Formatsin India
ono/ exclusive
branded retail sho s
Exclusive sho roomseither o ned or
franchised out by a manufacturer
Com lete range available for a given,
brand certifed roduct quality
Multi-branded retail sho s\
Focus on particular product categories and
carry most of the brand available
Consumer get to have more choices as manybrands are on display
Convergence retail oultels
Usually have on display most of the convergence as well as
consumer electronic products including
communication and IT goods
One stop shop for customer, many product
line of different brands on display
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Different Formats
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Big Shots of the Industry
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1) Pantaloon Retail
2) Raheja Group
3) Reliance Retail
4) Tata Group
5) RPG Group6) Landmark Group
7) Piramal Group
8) Bharti - Walmart9) A V Birla Group
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Pantaloon Retail Headquartered in Mumbai 450 stores across the country
employing more than 18,000 people.
All India space- 5 mn sq.ft, expecting to reach 30 mn by 2010.
Various segment including food & grocery, home solutions, consumer electronics, Health & Beauty product etc.
Recent Innovations include e-commerce Hybrid Format of
Small shops
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Raheja Group
First Departmental store in India, SHOPPERS STOP
Member of IGDS
7,52,000 sq.ft. retail space with turnover of 6.75 millions
Crossword, Mothercare, Home stop etc.
MOU with Home retail group of UK
Plan to establish network of 55 hypermarkets across the
country with sales turnover of US$ 100 million by2010.
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Reliance Retail
More than 300 Reliance fresh store and first Reliance Mart hypermarket in Ahmedabed
Expansion in two tier cities like Vijaywada, Pune, Ludhiana etc
Investment of Rs.30,000 cr to set up new formats of retail ,
expecting sales of Rs.90,000 cr by 2010
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Tata Retail Group
Established in 1998
Trent- subsidies of Tata group operates Westside and Star
India Bazaar, Croma
Plans to pen more than 27 stores across its retail formats
adding 1.5 mn sq.ft. of space in the next 12 DLF malls
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A V Birla Group
Strong presence in apparel- Madura Garments
Owned Brands like Louis Phillipe, Van Heusen, Allen Solly,
Peter England
Investment plan Rs.8000-9000 cr in the first 3 years till 2010
MORE range of 15 supermarkets open at Nashik, Pune &
other two tier cities
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Merger & Acquisition
Year Acquired/ JV Company/ Target
Acquirer Nature of Business Stake
Considerati
on(US$
million)
2005 Liberty shoes Future Group Retail (footwear) 51% 3
2005 Indus- league clothing Future Group Retail Clothing 68% 5
2005 Odyssey India Deccan
Chronicle
holdings
Leisure Retail chain
(books, music, toys)
100% 14
2005 Landmark Tata Trent Books, Music,
Accessories
74% 24
2006 Bistro hospitality TGI Fridays Restaurant 25% N/A
2006 Indus League clothing Etam Group,
France
Lingerie & womens
wear retailing
50% 8
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Map of Indias Income class
1994
1995 1999
2000 2007 2008
Rich (Annual income >US$ 4700)
Benefit Maximize: Owns CAR, PC
1 mn household 3 mn HH 6 mn HH
Consuming (US$ 1000- 4700)
Cost-benefit optimizer: have bulk of branded consumer goods, 70% of 2-
wheelers, refrigerators, washing
machine
29 mn HH 55 mn HH 75 mn HH
Climbers (US$ 500-1000)
Cash-constrained benefit seekers: have
at least one major durable(mixer,
sewing machine, television)
48 mn HH 66 mn HH 78 mn HH
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Aspirants (US$ 350-500)
New entrants into consumption:
have bicycle, radio, fans
48 mn HH 32 mn HH 33 mn HH
Destitute (Less than US$ 350)
Hand to mouth existence: Not
buying
35 mn HH 24 mn HH 17 mn HH
Source: Ernst & Young
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Consumer Dynamics
� Youngest population on the globe
� Growth pace of the Indian economy
�97% retail market is untouched by organized retailers
� Food & Grocery . 55%
�
Consumption is moving out of the home� Indian consumers has grown richer
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STRENGTHS WEAKNESS
Technology Incentive
Super Market Stocks
Rising Disposable Income
Increase in number of people in earner
category
Low conversion level
Customer Loyalty
Underdeveloped supply chain
Lack of adequate utilities
OPPORTUNITY THREAT
Large consumer market
Growth of Organized sector
Rural Retailing
Potential for Investment
High market share of unorganized market
Shopping Culture
Poor inventory turns & stock availability
measuresInflation