RETAIL SECTOR

What is Retail ??
Retail Philosophy : “ By the people, for
the people and of the people.”

Retailing involves selling products and

services to consumers for their individual or
family use. As the final link between
consumer and manufacturers. Retailers are
vital part of the business world. Retailers
add value to products by making it easier to
manufacture, to sell and consumers to buy.
OVERVIEW
 The Indian Retail market – one of the
fastest growing industries .
 Expected to grow from US $350 billion
to US $427 billion by 2010.
 Accounts for about 4% of the total Retail
market in India.
 Expected to increase to about 15-20%
with the entry of a no. of corporates.
INDIAN RETAIL
SECTOR
FOOD
RETAILERS

HEALTH &
CLOTHING &
BEAUTY
FOOTWARES
PRODUCTS

INDIAN
RETAIL
SECTOR

HOME
FURNITURE & DURABLE
HOUSEHOLD GOODS
GOODS

LEISURE &
PERSONAL
GOODS
FOOD RETAIL
 Dominates the shopping baskets in
India.
 Indian food industry forms 44% of the
entire FMC.
 Sales growing at 9% annually.
 They set the growth agenda for the
modern trade formats.
MAJOR PLAYERS
 Food Bazaar – Kishore Biyani.
 Reliance Fresh – Mukesh Ambani
 Godrej Agrovet
 The Aditya Birla Group
 The Tata Group
THE MOBILE
REVOLUTION
 The Retail market for mobile phones,
handset, accessories .
 Growing at the rate of 15-20%.
 Earns over US $17.33 billion per year.
 Users are expected to cross 220 million
by the year end.
 550 million by the year 2010.
MAJOR PLAYERS
 Spice group plans to invest US $123.8
million in the next two years.

 Essar group plans to invest US $278.56-

334.24 million over next three years.

 Hyper market chains like Subhiksha have

started exclusive stores for mobile retail.
RETAIL & CONSUMER
CHALLANGES
 Corporate governance
 Market value recognition
 Globalization / Consolidation
 Corporate / Brand reputation
 Supply chain optimization
 Influence of new technology
 Brand valuation & management
 Enterprise risk management
 Marketing effectiveness
REPORT 2006-2007
 Organized Retail will form 10% of total
retailing by the end of the decade.
 Cultural and regional differences in India
are the biggest challenge.
 Hyper market is emerging as the most
favourable format.
 The arrival of multinational will further
push the growth of hypermarket format.
KEY PLAYERS
 Future group
 Vishal Retail ltd
 Reliance Retail
 RPG Enterprise
 Bata India ltd
 Videocon Appliance ltd
 DCM- Harivali kissan bazaar
 Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 -
July 6, 2002
"Growth has no limit at Reliance. I keep revising
my vision.Only when you can dream it, you can
do it."
 RIL's Retail Project
Major subsidiaries:

 Reliance Retail Limited,

 Ranger Farms Private Limited,
 Retail Concepts and Services Private Limited,
 Reliance Retail Insurance Broking Limited,
 Reliance Dairy Foods Limited,
 Reliance Retail Finance Limited,
 RESQ Limited,
 Reliance Digital Retail Limited,
 Reliance Service Solutions Limited.
 The Mega Retail Story
 A targeted sales turnover of Rs 90,000 crore (US$ 20
billion) by 2010 with a planned investment of Rs 30,000
crore over the next 5 years.
 RIL Set To Become World's Largest Real Estate Property
Owner
 Retail Will Become Core Business of RIL
 Reliance Industries Limited is the largest and one of the
fastest growing private sector companies in India.
 With domestic market shares ranging from 40-80%,
RIL is also ranked among the top 10 producers globally,
for all its major product segments.
 5 Formats of
Reliance Retail

 Reliance Mart
 Reliance Fresh
 Reliance Digital
 Reliance Trends
 Reliance Wellness
 Reliance Mart
 Planning to come up with
mega retail stores by sewing
up real estate deals fast.
 Envisions a target of 100
million sq ft by 2011 to open
its hypermarket business.
 Chosen Ahmedabad for its
first hypermarket whereas
the second and third
hypermarkets will come up in
Jamnagar (Gujarat) and
Gurgaon (Haryana) in
September 2007.
 The hypermarkets will offer a
comprehensive array of
digital, food, and other
lifestyle products. Reliance
Mart is a part of the Reliance
Group’s $5.5 billion ‘farm to
fork’ retail initiative, with the
targeted revenues of $23
billion by March 2011.
 Reliance Fresh
 Opening new retail stores into almost
every metropolitan and regional area of
India.
 Reliance Fresh recently (24th Jan,
2007) opened several "Fresh" outlets in
Chennai, New Delhi, Hyderabad,
Mumbai, Chandigarh, Ludhiana
increasing its total store count to 40.
 According to Deccan Herald, the
company is planning on opening new
stores with store-size varying from
1,500 sq ft to 3,000 sq ft.
 Reliance Digital
 Reliance Digital is a one stop
shop for all technology solution
in the field of consumer
electronics, home appliances,
information technology and
telecommunications
 Reliance Retail and Apple have
partnered to announce an
exclusive marketing and
distribution deal.
 In major cities in India, Reliance
has planned to build up a 10
iStores by Reliance Digital that
will showcase Apple products.
 This tie up is the first alliance
for Reliance Retail with an
International brand.
 Reliance Trends
 Product Quality has been ingrained into the
DNA of Reliance Trends and is integral to its
mission of “Grahak Devo Bhava”.
 For the first time in organized retail,
Reliance Trends is introducing a Made to
Measure tailoring service, offering
customized fits at reasonable prices.
 Reliance Trends is offering a homogeneous
mix of private labels and brands across
men’s, women’s and children’s categories.
 Continuing the tradition of reaching out to
the middle class of the country, the current
offering from Reliance Trends is easily
affordable to the Indian consumer.
 Taking forward the vision of Shri. Mukesh
Ambani, Chairman and Managing Director,
Reliance Industries Ltd. Reliance Trends
delivers unmatched affordability, quality
and choice of products and services to the
consumer.
 Reliance Wellness
 Hyderabad has become the launch
pad for Reliance Retail's newest foray
- Reliance Wellness
 The chain of 1,200 stores, to be set
up in 51 cities over the next 3 years,
will offer a range of health and
lifestyle products.
 Introducing a ‘Medical Compliance
Program’ for customers who are on
long-term medication.
 Free health insurance cover under
RelianceOne, the customer loyalty
programme.
 Consultant doctors would be
available at the stores.
 Reliance retail opened 9 ‘fresh’ stores
in NCR, target 1 trillion in revenues

 Moved into National

Capital region (NCR) on
Jan 29 ‘07.
 In Noida, Greater Noida,
Gurgaon, Ghaziabad and
Faridabad.
 Within the next 3
months, Reliance wants
to take the tally of these
‘Fresh’ stores to 100 in
the Delhi- NCR region.
 Believed to have invested
about Rs. 1,100 crore in
this region.
 FUTURE INITIATIVES
 Expected to invest Rs. 25,000-30,000 crore as
per its plans by 2010.
 Plans to launch other retail formats like
‘Reliance Fresh Plus’ where people would get
apparel consumer electronics, FMCG items and
medicines, in addition to fresh fruits and
vegetables.
 And a format for retailing groceries and
condiments called as ‘Reliance Select’.
 The Indian Story
 10th largest economy in the world based on GDP

 7.5% GDP growth forecasted over 2005-2007

 Real estate sector growing at 30% per annum and one of the largest
employer – a key contributor to GDP

 Residential market is 80% of the total real estate market

 Gap between supply and demand in residential market is 41 billion

sq.ft.
 The Indian Story
 Real Estate in India projected to be USD 50 billion in 2008

 Organized retail space demand of 40 million sq.ft. over next 3-4

years

 India is ranked the 5th largest retail destination across the

globe

 Consumerism – the order of the day, which is fueling the

growth in both the commercial as well as the retail sector

 Globalization of Indian Economy

 Indian Retail Scenario
 Total Private Consumption Expenditure in India – 375 Billion USD

 Retail Sale – 205 Billion USD (55%)

 Organized Retail – 6.2 Billion USD (3%)

 Retailing – 35% of GDP

 Outlet Estimates – Over 12 Million

 Format – Only 4% larger than 500 sq.ft.

 Second Largest Employer after Agriculture

 Retailing in India
 Emergence of modern retail formats

 Increased pressure on opening up FDI in retail sector

 Rapid Evolution of New-age Young Indian Consume

 Rising Incomes levels

 Increased Awareness Level among Consumers

 Exposure to International Brands

 Retail Space is no more a constraint for growth

 Large Indian retailers

Hypermarket
 Big Bazaar
Giants
 Shoprite

 Star

Department store
 Lifestyle

 Pantaloons

 Piramyds

 Shoppers Stop

Entertainment
 Fame Adlabs

 Fun Republic

 Inox

 PVR
 Categories of Indian retail
 Corporate Houses
 Tatas: Tata Trent

 RPG group: Food World, Health and Glow, etc

 ITC: Wills Life Style

 Rahejas (Shoppers Stop), Hiranandani(Haiko), DLF(DT

cinemas) etc.
 Dedicated brand outlets

 Nike, Reebok, Zodiac etc

 Multi-brand outlets

 Vijay Sales, Viveks ,Vishal etc

 Manufacturers/ Exporters

 Pantaloons, Bata, Weekender

28
Benefits to the government

Greater Consumer
Greater Per
Spending due to
Capita Income
economic boom
GDP Growth

Employ Benefits Greater

ment to Govt. Exports
Increasing Greater
Tax Paying Sourcing
Increased Tax
Population From India
Revenues

Reduced Tax
Evasion
 Malls in India

 A decade ago - not a single mall

 A year ago - less than half a dozen

 Today - 40-50 malls

 2 years from now – 300-500 malls

 Barriers

 Barriers to FDI which limits entry of global players and

limits exposure to best international practices

 Lack of industry status which restricts financing and

therefore the growth and scaling is limited

 Poor Infrastructure which restricts retail growth, creates

supply chain bottlenecks and increases wastage of
farm produce
 The Way Ahead

 India is amongst the least saturated of all major global markets in terms
of penetration of modern retailing formats

 Many strong regional and national players emerging across formats and
product categories

 Most of these players are now gearing up to expand rapidly after having
gone through their respective learning curves

 Real Estate Developers are also moving fast through the learning curve
to provide qualitative environment for the consumers

 The Shopping Mall formats are fast evolving

 Partnering among Brands, retailers, franchisees, investors and malls

 Improved Infrastructure
 Conclusion

The demanding assertive Indian consumer is now sowing the seeds for an
exciting retail transformation that has already started bringing in larger
interest from International Brands / formats.
With the advent of these players, the race is on to please the Indian
consumer and its time for the Indian Consumer to sit back and enjoy the
hospitality of being treated like a King.
Thanks