Retail Industry com

8/7/2019 Retail Industry com

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INDIAN RETAIL INDUSTRY



Organized Vs Unorganized Retail Sector

Organized Retail Sector Unorganized Retail Sector



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.



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



Key Growth Drivers

� Economic Growth

� Demographics

� Urbanization

� Credit availability



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



Different Formats



Big Shots of the Industry



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



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



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.



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



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



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



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



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)




Aspirants (US$ 350-500)

New entrants into consumption:

have bicycle, radio, fans


Destitute (Less than US$ 350)

Hand to mouth existence: Not

buying


Source: Ernst & Young



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



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

Retail Industry com

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