competitive landscape of the retail industry

in India

Presented By Saurav Kishor

Presented By Saurav Kishor

Introduction Interesting facts on retail

Retail is a sunrise sector in the Indian business world Growing at 20 -25 % per annum (Source: Mckinsey Report)

5th Largest Market in the world by economic value Contribution of India’s GDP more than 15% Indian retail industry spreads over more then 6 million outlets (2.6 million

urban and 3.6 million in rural)– Every 10th billionaire is a retailer.– 25 of the top 50 Fortune 500 companies are in Retail.– In India the Retailing Industry provides employment to over 18 m people,

second largest after agriculture.– 1 out of every 25 families in India are engaged in the business of retailing– 72% of Indian population staying in rural market.– In India Per Capita square feet area under retail is just 2 sq. ft. or 0.2 sq. m.– Source: CII Conference on Retailing

Market Segmentation

A market segment consists of a group of customers who share a similar set of needs and wants.

• It means dividing the market into similar sub-markets by understanding the needs and expectations of customers.

• It is the first step in applying the marketing strategy. For Example

1. Titan Offer their watches in 4 brands for different customers characteristics

Titan, Sonata, Times & Fast Track.

2. Future Group operate in 4 Different stores formats depending on the category of the customers .

Big Bazar, Pantaloon, Central, Loot

Competitors

Some Key retails of India • Big Bazar• More.• Reliance• India Bulls• Spencer’s • Life style • Future group• Central and • Etc….

Foreign companies who already in Business • KFC• Pizza Hut• Rebook• Nike• Subway • United Colors of Benetton• Adidas • McDonald's and • Etc…..

Positioning in Indian market FMCG Company Procter & Gamble (P&G) is planning to invest more

than Rs 1,500 crore (US$279.4 million) over a period of time in its unlisted Indian arm P&G Home Products to ramp up operations in the country

US-based accessories manufacturer Fossil Inc has proposed to invest Rs 20 crore (about $4.5 million) in India in a fully owned single brand retail venture

Pavers England to invest $20 million in its Indian single brand retail strategy

Wal-Mart, Carrefour and Tesco are interested in entering the Indian market in front-end operations

French retail giant Auchan Group to open franchise stores in India Brooks Brothers to invest Rs 6.22 crore ( Rs1=0.02 UD$) IKEA

proposes to bring in Rs 10,500 crore of foreign direct investment (FDI), the largest in the category so far ( Rs1=0.02 UD$)

Indian retailers A 2012 PWC report states that modern retailing has a 5% market share in India with about $27 billion in sales, and is growing at 15 to 20% per year. There are many modern retail format and

mall companies in India. Indian Retail Group Market Reach in 2011 and Notes

Pantaloon Retail65 stores and 21 factory outlets in 35 cities, 2 million square feet space

Shoppers Stop 51 stores in 23 cities, 3.2 million square feet space

Spencers Retail 200 stores in 45 cities, 1 million square feet space

Reliance Retail708 mart and supermarkets, 20 wholesale stores in 15 cities, 508 fashion and lifestyle1206 crore (US$200 million) per month sales in 2013

Bharti Retail74 Easyday stores, plans to add 10 million square feet by 2017

Birla More 575 stores nationwide

Tata Trent 59 Westside mall stores, 13 hypermarkets

Lifestyle Retail 15 lifestyle stores, 8 home centers

Future Group193 stores in 3 cities, one of three largest supermarkets retailer in India by sales916 crore (US$150 million) per month sales in 2013

Retail formats in India

Unorganized retailing refers to the traditional formats of low- cost retailing

for example, • the local corner shops,• owner manned general stores, • pan/beedi shops, convenience stores, • hand cart • pavement vendors

Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc.

These includes, • The publicly traded supermarkets,

corporate-backed hypermarkets and retail chains,

• and also the privately owned large retail businesses.

RetailOrganized 3%Unorganized 97 %

Swat Analysis

Strength• Products are cheaper than the

market price.• Technology intensive industry • Variety in products • Demographic favor Strength• Rising disposable income• Urbanization • Shopping convenience • Low labor cost of skilled ones• Plastic card revolution

Weakness • Has not yet trapped the whole market. • Facing problems due to political

environment • Less conversion level• Customer loyalty Weakness• Policy related issues • Limited consumer insight• Inadequate human resources • Taxation hurdle• Underdeveloped supply chain• Lack of adequate facilities

Swat Analysis

Opportunities • Kids and teens retailing segment • Percolating down • Rural retailing • Sectors for high growth potential

OPPORUNITY • Locational advantage • Falling real estate cost • E-retailing • Franchising

Threats• Shopping culture • Political issues • Social issues • Lack of differentiation among the malls

THREATS that are coming • Poor inventory turns and stock availability

measures

Conclusion

• Modern Retail in India could be worth US$ 175-200 billion by 2016.

• The Future is Promising; The Market is growing, government policies are becoming more favourable and emerging technologies are facilitating operations.

Thank you