Beruflich Dokumente
Kultur Dokumente
May 2017
Decoding the India retail story
Profitability
Key conclusions
Organised retail industry to grow at 21% (Rs 4.2 tn) in 2017-18
Aided by higher same store sales and new store roll outs
Growth for physical retailers will be steady at 19-21% CAGR while e-retail will be 34-36% CAGR
7th pay commission recommendation will add to the growth as disposable income will be on rise
Over long term (2016-17 to 2021-22), industry expected to grow at 23-25%
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Growth prospects of
overall retailing
industry in India
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18P
2011-12
2013-14
2016-17
2017-18P
2021-22P
Inflation Total retail growth (RHS)
P: Projected P: Projected
Source: CRISIL Research Source: CRISIL Research
Lower consumer spending (due to economic slowdown) dented overall retail growth in 2012-13 & 2013-14;
2014-15 witnessed slight growth momentum
In 2016-17, overall retail growth slowed down to 11% on-year from 13% on-year in 2015-16 due to
demonetisation policy
However, in 2017-18, the industry expected to recover, grow by 14% on-year on a lower base
Overall retailing to grow at 14-16% CAGR over next five years
Pent-up demand, along with better economic outlook, will boost consumer sentiment and drive up discretionary spends
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Growth prospects of
organised retailing
industry
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18P
2018-19P
2019-20P
2020-21P
2021-22P
2,000
organised retail
Penetration in
-
2011-12 2015-16 2016-17 2017- 2018- 2021-
18P 19P 22P 5% 19% 26-28%
P Projected P Projected
Source: CRISIL Research Source: CRISIL Research
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Vertical-wise growth
and indicative
financials
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Furnishings, Apparels, footwear earn highest gross
margins
Food and grocery Other categories
Furnishings 35-40
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Food and Grocery (F&G) high-volume low-margin
business
Huge opportunity but fiercely competitive
Wet markets, cart vendors etc
Mom-and-pop stores
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Clothing right product mix can generate high returns
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Consumer durables A challenging business
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Assessment of
various formats
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Location Near cluster of In the main city/ Close to the main Beyond prime locations of the city
residential property town city/ towns
Products Mainly food and Apparels, footwear, Food and grocery Food and grocery along with
grocery electronics. But not along with apparels, apparels, footwear, electronics etc.
food and grocery footwear, electronics
etc. Share of food and grocery is much
larger than Hypermarket
Price points Retail prices Retail prices Retail prices Similar to distributor/ wholesaler
Customers Retail consumers Retail consumers Retail consumers Hotels, Corporate, Caterers, local
shops
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Comparison across verticals and formats
Verticals Format
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Profitability
17
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