RETAIL INDUSTRY

Part 3 of Sector Specific SCM presentation Group 6

GLOBAL RETAIL

FACTSHEET
Worlds largest private industry

> US $ 8 trillion sales worldwide annually Accounts for almost 10% of !" in most countries #a$or employer in most economies 1%% in US 1&% in 'ra(il 1)% in "oland 0*% in +,ina

TOP RETAIL SALES: WORLD

-an. 1 ) 5 2 & % * +ountry U1S1A 41U 6apan +,ina U17 8ndia -ussia Sales /US $0 $ 2 3n $ ) 3n $ 1 3n $ *&0 'n $ 222 'n $ 500 'n $ )00 'n

GLOBAL PLAYERS

CHANGING TRENDS

Six core areas to win in the changing environment

MVI (Management ventures Inc) in !!"

GRDI 2008 Market Attractiveness

ORGANIZED RETAIL (AS A %OF TOTAL SALES

INDIAN RETAIL

EVOLUTION OF INDIAN RETAIL

"istoric / $ura l $each #raditional / Perva sive $each %overnment Supported Modern Formats / &nternational

E clusive !rand Outlets "yper / Super Markets Department Stores Shopping Malls PDS Outlets Khadi Stores Cooperatives Convenience Stores Mom and Pop / Kiranas Weekly Markets Village Fairs Melas
Source o' Entertainment (eigh)orhood Stores / Convenienc e *vaila)ility / +o, Costs / Distri)ution Shopping E perience / E''icie ncy

MAJOR PLAYERS: INDIA

#uture Group $ P%I&

'('( Group

%PG Group

%e)iance %etai)

(V *ir)a Group

&an+mar, Group

Source- .rnst / 0oung

Total S a!" O# R"ta$l I% I%&$a

Source - 1atamonitor2 !!3

Source &ndia $etail $eal Estate , #he road ahead , &C&C& ,hite paper pg- - .

Retail store formats Store Format

Small/ Medium Size

Non store Format

ar!e scale "onsumer "o#o$Direct Stores Mkt!/"%annel less Re

6i)e %etai)ers2 7aw,ers5 45Super Mar,et5 51epartmenta) Stores5 nvenience stores5 351iscount stores5 95Manufacturer:s Showroom ;5Super stores5 65.ntertainment

45Co<op stores5 5Saha,ari *han+ars5

45In home Se))ing5 5'e)e shopping 5 35=n)ine retai)ing5 95Ven+ing Machine

cia)t8 Stores

RETAIL OPTIONS
Strategic 9icense Agreements

+as, and +arry

!istri:ution eg18nternational +osmetic 'rand

;ranc,isee route

#anufacturing

6oint <enture

ANALYSIS OF INDIAN RETAIL

POTER'S ( FORCES MODEL

$ivalry *mongst Competitors

!argaining Po,er O' !uyers

!argaining Po,er O' suppliers

P)E)S)T ANALYSIS OF INDIAN RETAIL

P)E)S)T * POLITICAL

P)E)S)T * POLITICAL
l l l l

;!8 s,ould :e allowed in stages 8nitial stages= )%% ;!8

l l l l

4sta:lis,ment ",ase= 2>% ;!8 #ature ",ase= 100% ;!8

3 yrs. 3 yrs.

l l
l

?o incentives needed to attract ;!8@ #ar.et si(e and potential are sufficient

P)E)S)T * ECONOMICAL
8ncreasing disposa:le income "ersonal +onsumption as a percentage of !"

"lastic money :ecoming a :ig pie of credit

P)E)S)T * SOCIAL
"opulation as a growt, driver

rowing wor.ing women population Adoption of nuclear family culture 'a:y :oomer effect rowt, in ur:an population *0% of organised retail is concentrated in % ma$or cities1 Af 500 million 8ndian middle classB only 1&% live in t,ese % ma$or cities

P)E)S)T * TECHNOLOGICAL
.%P>S(P *ar<co+ing %#I1 Convenient Pac,aging 'ransportation ( reefer vans etc)

SWOT OF INDIAN RETAIL

STRENGTHS

S,opping convenience Wide range of retail formats to suit every consumer "lastic card revolution1 reater availa:ility of Cuality retail space1

3!

WEA+NESS
"olicy related issues

9imited consumer insig,t 8nadeCuate ,uman resources

3aDation ,urdle

Underdeveloped supply c,ain

9ac. of adeCuate utilities

OPPORTUNITIES
-apid economic growt, 3,e young 8ndia

OPPORTUNITIES

4mergence of 8ndia as a retail ,u: "otential untapped mar.ets Sectors wit, ,ig, growt, potential A:undant availa:ility of s.illed la:our 9ow cost of operations

33

Opportunities
-ural retail W,olesale trading

4Eretailing -etail franc,ising

39

Threats
"olitical issues1 Social issues1 8nflation1 9ac. of differentiation among t,e malls t,at are coming1

BIG BAZAAR,

$--" -a-ta a.! a// a 0a $ %a $,

B$1 Ba2aa! Fa/t F$l"))

O.tl"t Pa!"%t 1!o.3 O5%"! Fo.%&"& H"a& ;.a!t"! I%&.-t!6 104 outlets Lo/at"& $% I%&$a F.t.!" 1!o.34 Pa%taloo%- R"ta$l I%&$a Lt&) +$- o!" B$6a%$ (CEO7 899: Jo1"- 5a!$ < M.=>a$ R"ta$l

Store 3ype 'usiness #odel

W">-$t" Ta1 l$%"

Fypermar.et Fig, <olume 9ow "rice@ Wal#art 'usiness 555)>$1>a2a!)/o= #odel

I--" -a-ta a.! a/ a 0a $% %a $)

V$-$o% Stat"="%t

'o +e)iver ever8 thing2 ever8where2 ever8 time to ever8 In+ian consumers in the most profita6)e manner@5

M$--$o% Stat"="%t

Ae share the vision an+ 6e)ief that our customers an+ sta,e ho)+ers sha)) 6e serve+ on)8 68 creating an+ executing future scenarios in the consumption space )ea+ing to economic +eve)opment@

B$1 Ba2aa! ? T " B$1 P$" o# PRIL,

(s of Mar:4!

B$1 Ba2aa! S3!"a&))

B$1 Ba2aa! L$#" C6/l"

B$1 Ba2aa!'- Co!" Co%/"3t

P!o&./t Po!t#ol$o,
A""A-49S ;AA! ;A-# "-A!U+3 +F899 S3A38A? !enims and tE Staples ;ruits s,irts -eady to eat <egeta:les ;a:ric and cut -eady to coo. 8mported piece 8nternational fruits ;ormals food !airy +asuals Spices products "arty wear 8mported 4t,nic wear :a(aar Accessories 3ea and Undergarment coffee s ?ig,t wear !ress FA#4 A?! "4-SA?A9 +A-4 Soft drin.s S,ampoo "ac.aged !etergents $uices Soaps #il. items 9iCuid was, ;ro(en foods +reams 8ce creams deodorants Fome cleaners Utensils "lastics +roc.ery Sundries

P!o&./t 3o!t#ol$o,
494+3-A?8+S 'AGAA;ASF8A? H 6W4994-I ;U-?83U-4 'AGAA+F89! +A-4 A?! A3F4- S4-<8+4S 3AIS

3< sets ;ootwear Was,ing mac,ines 'eauty care -efrigerator Star parivaar "ersonal care Small appliances 9aptops +omputer accessories 7itc,en appliances

9iving room :ed room 7itc,en !ining room 7ids room "aintings !ecorative rooms

7ids wear #-1 -8 F3 3oy :a(aar stationary 'a.ery +,ild care 9oot mart 3ulsi ;uture money ;uture generally

D"=a%& Fo!"/a-t$%1 @ B$1 Ba2aa!

D"=a%& Fo!"/a-t$%1 F"at.!" &oo, 6e8on+ the o6vious seasona) rush 68

? ? ? ? ? ? ?

Aee,)8 BSa6se sasta 1inC (Ae+nes+a8s) BSa6se saste char +inC in Danuar8 B; +a8s maha 6achat C in (ugust Dun, .xchange etc

D"=a%& Fo!"/a-t$%1 F"at.!" 7a)f 8ear)8 6asis for examp)e? 1iwa)i season $ March ? Summer season< =cto6er

Aee,)8 forecasts for perisha6)es

D"=a%& Fo!"/a-t$%1 C all"%1" A7(' Sca)e of forecastEEE

Spora+ic +eman+ A7(' an+ 7=A to intro+uce new goo+s

7=A to Change prices an+ promotions

Cat"1o!$2at$o% o# 1oo&-

I%t"!%al Co%-t!a$%t *atch siFe 'hir+ part8 manufacturing

M"t o&- o# D"=a%& Fo!"/a-t$%1 *I

&ast 3 8ears +ata / growth rate of current 8ear

M"t o&- o# D"=a%& Fo!"/a-t$%1 *II

#or a few other important pro+ucts expert ana)8sis is o6taine+@@

@551e)phi 'echniGue

D"=a%& Fo!"/a-t$%1 P!o/"--

LOGISTICS a%& SCM @ B$1 Ba2aa!

S.33l6 C a$% @ B$1 Ba2aa!

T!a%-3o!tat$o% o# Goo&-

'ransportation charges pai+ to the transporter are %s 4H;!!>month up to 4;!! Ims If the +istance is more than this then 95;!%s per ,i)o meter

Wa!" o.-$%1 @ B$1 Ba2aa!

&conomic Functions

'$erational Functions(

Conso)i+ation

%eceiving goo+s

*rea,<*u),

Ieeping recor+s

Stoc,pi)ing

Proper han+)ingJ Kua)it8 Maintenance

Va)ue<(++e+ Services

=r+er receiving

1ispatching goo+s

Mar,eting inte))igence

T63"- o# DC- @ B$1 Ba2aa!

M515C5 (Mother +istri6ution centre) e5g5 'arapur warehouse %515C5 (%egiona) +istri6ution centre) e5g5 7assangarh warehouse

C515C5 (Centre +istri6ution centre) e5g5 Mum6ai warehouse

SCM Ma/!o P!o/"--"- @ B$1 Ba2aa!

Lo1$-t$/- @ B$1 Ba2aa!

Inwar+ &ogistics
? Lon Perisha6)es ? Perisha6)es ?

=ut6oun+ &ogistics
? Genera) ? %everse

I%5a!& Lo1$-t$/- (No%*P"!$- a>l"-7

#ront en+ team of particu)ar +epartment 1ata Categor8 team of Centra) office Stoc, 'ransfer =ut (S'=) 1C or A7 Stoc, pic, Start pic,ing Stoc, 'ransfer Lote Gate Pass Stoc,

rea) con+ition an+ num6er mentione+ in the gate pass2 +e)iver8 note Securit8 in the )ogistics +ept ran+om)8 chec,s the num6er of cartons

Information

ment mem6er Cross<chec,s items in front of the particu)ar +ept team mem6er 68 the stoc,<in

1amage+

%ight goo+s

1etai)s entere+ in the Goo+s Inwar+ %egister / goo+s stoc,e+ in th s entere+ in the Stoc, outwar+ %egister an+ sent 6ac, to the warehouse5

I%5a!& Lo1$-t$/- (P"!$- a>l"-7

Perisha6)e Goo+s Ven+or &ogistics +epartment Chec,s '(MJ ILV=IC.J PN%C7(S. =%1.% If a)) =I@ Goo+s %eceive+ Lote is generate+ for particu)ar +ept Particu)ar +ept Co))ection of stoc, 7igh)8 Perisha6)eShop #)oor

&ess Perisha6)e- Interna) A>7

O.t>o.%& Lo1$-t$/ 7ome 1e)iver8 Store to store 'ransfer Inter Aarehouse %everse )ogistics

R"A"!-" Lo1$-t$/- (RL7

%eturn of +amage+ or expire+ stoc,

%eturn of non sa)ea6)e items

#irst retai)er in In+ia to app)8 reverse )ogistics

9 %everse &ogistics A>7s

(verage spen+ing on reverse )ogistics for

? Garments < 4! to 4;O ? #urniture < !O

IT @ B$1 Ba2aa!

ERPBSAP @ B$1 Ba2aa! * S%a3- ot

WF4? A8# SA9U38A? 8#"94#4?34! 'I "-A64+3 F4A! ?o1 of users 3ime 3a.en +ost Af 8mplementation )00& 3o deploy a ro:ust transaction SA" -etail management Solutions system and /)20 an enterprise wide SA" 3eam wit, t,e ,elp platform to run its operations of ?ovasoftB Singapore +,ief 8nformation 3ec,nology AfficerB +,inar 1)00 !es,pande A:out siD mont,s Around $10 million

ERPBSAP I=3l"="%tat$o% @ B$1 Ba2aa!

I%A"%to!6 Ma%a1"="%t @ B$1 Ba2aa!

I%A"%to!6 T63"

? ?

I%A"%to!6*D"/$-$o% Ma0$%1
'he Store Manager is the 6oss5

7e inspects
? Stoc,s time to time ? 1eman+s of Customer ?

7e maintains Stoc,<in / Stoc,<out to +eci+e on )eve) of inventor85

R"*O!&"! Po$%t- #o! I%A"%to!6

=r+ers p)ace+ as an+ when reGuire+ (DI')

M""t$%1 U%/"!ta$% D"=a%& Strong *ac,war+ Integration

If more pieces>stoc, reGuire+@

? (s, other near68 *ig *aFaar store

? 'ransfer of interest- 1ivert customers to other store

.xamp)e- In appare)s stoc, )asts P9; +a8s5 In case of emergenc8 transfer the interest to Panta)oons

Wa-t" Ma%a1"="%t @ B$1 Ba2aa!

A--"--="%t P!o/"--: C.-to="! Sat$-#a/t$o% S.!A"6A.&$t-

C.-to="! Sat$-#a/t$o% S.!A"6-

C.-to="! Sat$-#a/t$o% S.!A"6 P!o/"-

(genc8 sen+s B M8ster8 ShopperC

'heir experience is +ocumente+

#ee+6ac, is sent to *ig *aFaar

(na)8sis is +one for improvement

A&Aa%ta1"- o# CEM

I% ? o.-" I%$t$at$A" CP!a1at$D

7ea+ office operation team personne) visits the store an+ o6serves

? Store exterior J*aggage win+owJ Customer service Store am6ience etc@

1one on a Guarter)8 6asis

.ncourages stores to improve performance on in< house competition )eve)5

A.&$t- @ B$1 Ba2aa!

Ca-.al O>-"!Aat$o%- @ B$1 Ba2aa!

'ro))e8s are not easi)8 avai)a6)e5 &itt)e attention to c)ean)iness5 Inefficient In<house pac,aging5 Crow+e+ store interiors5 Sign 6oar+s are not prominent5

Ca-.al O>-"!Aat$o%- @ B$1 Ba2aa!

&ong *i))ing time Aea, pu6)icit8 of va)ue a++e+ services #ami)8 crow+ is evi+ent5 0outh on)8 4!O5 #oo+ *aFaar efficient)8 manage+5 It is a 6it over staffe+ 6ut )a8out is ver8 goo+5

R"/o=="%&at$o%-,)

Improvement in supp)8 chains Aarehouse )ocation Improvement in pac,aging Infrastructure Separate )ess pa8ing 6i))ing counters Improvement in C)ean)iness

A/0%o5l"&1"="%t,
&ocation- Chinchwa+

Contact Person- Mr5 (ushutosh Sathe (Store Manager) %eferences? Aor, Staff ? Customers ? #ormer SII* Stu+ents ('an8a GroverJ Mu+it Murar,a)

 Visit +etai)s

? Lo5 of visits- 3 ?
"th 1ec Q4!- Rahi+ an+ %aS ( 3 pm< 9 pm) n+ Dan :44- 1iv8a2 Sachin an+ 1hava) ( 4 pm< 3 pm) 4!th Dan Q44- Liti,a2 %ishi,a2 Swati2 %aS ( 9pm $ 6pm)

T a%0 Yo. EEE