Indian Retail – Next Growth Story with

Challenges and Opportunities

Prepared by: Gajendra Khare

(Chief Executive – SCS universal)

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Contents

1. Executive Summary

2. Industry Size, Structure ,Growth and Global Positioning

3. Opportunity Snapshot

4. Key Players

5. Investment Scenario

6. Government Initiatives

7. FDI Environment in Retail

8. Challenges in Retail Sector

9. Conclusion

10. Retail Companies operating in India

11. Define Value Proposition, Retail

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Executive Summary
(Drivers of organized Retail )
Organized Retail Penetration -2015– 92%,
Un-organized Retail Penetration-8%
DEMAND DRIVERS
SUPPLY DRIVERS
•Growing youth segment and
working women
•Rapid Real Estate infrastructure
•Rising Income and increasing
Development
purchasing powers
•Higher Brand Consciousness
•Easier access to credit
•Changing consumer
•Increased efficiency due to
preferences & increasing
development in supply chain
urbanisation
•R&D, Innovation and new product
•Increasing number of HNI’s
Development
(High Net worth Individuals)
•Growing interest of investors
•Rising Internet Penetration
•Conducive regulatory environment
• due to expected reforms.

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Executive Summary contd.
(Emerging Opportunities in Indian Retail )
• Retail Infrastructure -
•CAGR is Expected to grow 13% (2006-2019)
•Number of modern trade stores are expected to increase 11192 in 2006 to 67100
in 2016.
• Super Markets are expected to increase from 500 in 2006 to about 8500 in 2016.
•Retail space supply is projected to grow from 5.3 million sq.ft. to 6.6 million sq.ft
in 2013-2015.
Rural Retailing – Rural Markets which constitutes 70% of the population base
account for only 40% of total consumption in India.
Luxury Markets
CAGR is Expected to grow 20% (2012-2015)
High growth categories are jewellery, watches and accessories
Online Retail will reach US$ 1.7 billion at a CAGR @10% in next three years
Sourcing Base – poised to emerge as sourcing hub for international retail chains
Giving abundant supply of raw materials and cost competitiveness and many global
retailers have established their wholly owned subsidiaries in India to manage their
operation.
Private Label Strategy – There is a great scope of development

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Industry Size, Structure,
Growth and Global Positioning
• 12-15 Million Retail Outlet. Only 4% MARKET SIZE OVER THE PAST FEW YEARS (US$ BILLION)
are larger than 500 Sq. Ft.larger than
size
• Retailing in India contribute 22% of its
GDP
• Ranked 5th in 2012 retailing market in
the world with 1.2 billion people
development index by AT Kearney.
• India has 11 shops retail outlet for
every 1000 people.
• Overall Size is estimated USD 1 Trillion
by 2020 USD 600 Billion in 2015 with
a CAGR of 15% over the last 5 years.
• Overall retail Sector Growth is likely to
witness 12-13% CAGR which would
worth INR 55 Trillion (USD 948 Billion-
2018-19.
• Employ about 40 Millions Indian (3.3 %
of total population)
• India’s E-Commerce Market will be
USD 100 Billion by 2020 from USD 3.5 In 2011 Government denied FDI in Retail, Single
Billion in 2014. Brand ownership was restricted up to 51%

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Opportunity Snapshot
Potential Consumer Segments Rural
Consumers
& Opportunities size and (833 Million)
tapped for
key retail segments. personal care,
Electronics,
Growing hair care &
F&B Working
number of
Population
Millionaires
(600 Millions)
(1.56 Lacs),
– Packaged
Luxury C.
Food, Luxury
Electronics,
Products,
Luxury
Products, Home Opportunity Consumer
Electronics
Furnishing Snapshot

Middle
Income Youth (500
Households Million-2011)
(75-300 Mobile.
Millions)- Apparel &
Home care, Accessories
Luxury

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Key Players

Company Key Stores and Brands

REI Agro Retail 6TEN and 6TEN Karana Stores
Future Groups Big Bazar, Food Bazar, Pantaloon, Central Fashion Station,
Brand Fctory, Depot.
Fab India Textiles, Home Furnishing, Handloom Apparel, Jewellery
RP-Sanjiv Spencer’s Hyper, Spencor’s daily, Music World, Beverly Hills Polo
Goenka Group Club,
The Tata Group Westside, Star India Bazar, Landmark, Titan InduTanishque
Outlet, Chroma Stores,
Reliance Retail Reliance Super Markets, Reliance Digital, Reliance Jewellery,
Reliance Trendd, iStore
K Raheja Corp Shopper’s Stop, Cross Word, Hypercity, Inorbit Mall
Group
LifeStyle International Lifestyle, Home Centre, Max, Fun City, &
International Franchise Stores

Gitanjali Nakshtra, Gili, Asmi, D’damas, Gitanjali Jewels, Giantti,

Gitanjali Gifts,
Aditya Birla “More” Outlets
Group

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Investment Scenario

• single-brand segment has received Foreign Direct

1 Investment (FDI) equity inflows totalling US$ 275.4
million during April 2000–May 2015, by DIPP

• British retail major Tesco invested Rs 850 crore

2 (US$ 133.8 million) in multi-brand retail trading
by forming an equal joint venture with Tata group
company Trent;

• Amazon, the world's largest online retailer, is

3 readying a US$ 5.0 billion war chest to make India its
biggest market outside the US.

• Abu Dhabi-based Lulu Group plans to invest Rs

4 2,500 crore (US$ 402.0 million) in a fruit and
vegetable processing unit

• Wal-Mart India Private Ltd, a wholly owned

5 subsidiary of Wal-Mart Stores Inc., plans to open
500 stores in India in the next 10–15 years.

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Government Initiatives

The Government of India has taken various initiatives to improve

the retail industry in India :
1. IKEA, the world’s largest furniture retailer, IKEA’s retail outlets
have a standard design and each location entails an investment
of around Rs 500–600 crore (US$ 80.4–96.5 million).
2. Introducing Goods and Services Tax (GST). Implementation of
GST is expected soon to enable easier movement of goods across
the country, thereby improving retail operations for pan-India
retailers.
3. The Government has approved a portfolio investment up to 49
per cent will not require government approval nor will it have to
comply with sectoral conditions as long as it does not result in a
transfer of ownership and/or control of Indian entities to
foreigners. As a result, foreign investments are expected to be
increase, especially in the attractive retail sector.

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FDI Environment in Retail
India allowed 100 per cent
FDI investment in single-
brand stores, but imposed
the requirement that the
single brand retailer would
have to source 30 percent of
its goods from India. On 7
December 2012, India
allowed 51 per cent FDI in
multi-brand retail.
Economic growth - This is one of
the major sectors, which is
enormously benefited from foreign
direct investment. A remarkable
inflow of FDI in various industrial
units in India has boosted the
economic life of country.

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Challenges in Retail Sector
• Retail productivity in India is very low comparison to international. Total retail
employment in India from organized and unorganized is 3.3% of Indian labour work
force out of which mostly related to the unorganised retail sector.

• There is still a lack of efficient supply chain management in retail sector.

• Most of the retail outlets in India are having less than 500 square feet in size.

• Many political parties in India have opposed FDI in retail sector. A political change in
state and central governments can puts a lot of political risk on investment in retail
sector.

• Trained manpower is a challenge for the organized retail sector in India.

• The lack of proper infrastructure and distribution channels in the country results in
inefficient processes in retailing..

• · Different structure of sales tax in different states. Taxation laws that does not favour
small retailers.

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Conclusion

• High growth rate shift towards unorganised retailing to organized retailing

formats.
• India's retail market is expected to grow at 7% over the next 10 years,
reaching a size of US$ 850 billion by 2020.
• Traditional retail is probable to grow at 5% and reach a size of US$ 650
billion while organized retail is probable to grow at 25% and reach a size of
US$ 200 billion by 2020.
• Modern retail sector in India could be worth US$ 175-200 billion by 2016.
• The Food Retail Industry in India also growing rapidly.
• The Mobile phone Retail Industry in India has already a US$ 16.7 billion
business, growing from rate of 20 per cent annually.

So finally we conclude that retail sector is grooming with rapidly and also
shifting from unorganised sector to organised sector retailing

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Conclusion Cont..

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 Retail Companies operating in India
Online Retail Companies
Aaramshop, Bookmyshow,
caratlane,cbazar, dialmedico, ezone,
fabfurnish, fabmart, freecharge,
futuregroup, homeshop18,
jabong,koolcart, landmarkbookstore,
madhuloka, meraevent,
mybusticket,myantra, mydala,
Naaptol,pepperfry,snapdeal, urban
adder, yebhi, flipkart,
Jewellary Retailers
Amprali Jewels, Bhima Jewellers,
Gitanjali Group, Joylukas, Kalyan
Group, Khazana Jeweller, Kirtilal,
PC Jewellers, Orra Jewellery, Tanishq
Clothing Retail
Companies
Fabindia, Globus, Home
Centre Stores, Kalyan Silk,
Landmark Group,
Lifestyle, Prateek Apparels,
RmKV, Shoppers Stop,
Welspun Retail, Ebony
Retail, Major Brands, Kazo
Fashion
Other Retailers
Easy day, Essar Hypermarket,
Fern N Petals, FutureGroup,
Ghantewala, GKB
Opticals,Govasool, Hypercity,
Homestop, Planet M, Pantloon
Retail, Pothys, Provogue,
Planet Fashion, Reliance
Digital, Reliance Fresh,
Reliance Retail, Spencor’s
Retail, Subiksha, Trent Metro
Shoes, More (Stores), Smile
Group, Vijay Sales, tata
Chroma, Welspun Retail Ltd.
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Define -Value Proposition, Retail

A business or marketing statement that summarizes why a consumer

should buy a product or use a service. This statement should convince
a potential consumer that one particular service or product will add
more value or better solve a problem than other similar offerings.

Retail comes from the Old French word tailler, which means "to cut off,
clip, pare, divide" in terms of tailoring The notion of the English word is "a
selling by the piece
.

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Thank You

For Details and Queries

Please contact :

Gajendra Khare
(Chief Executive)
SCS universal
Address: F-35, Arora Shopper’s Park, Shakti Khand –II, Indirapuram, Ghaziabad – 201010

Mobile1: +91 – 9971090494

Email: gkhare@scsuniversal.com
Website: www.scsuniversal.com , www.scsuniversal.in

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