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V INDIA - Most attractive retail destination

V $ 320 billion now -- $637 billion by 2015


V CAGR ² 5%
V Highly Fragmented ² ´A nation of shopkeepersµ
V 14% to India·s national GDP
V Jobs for 7% of workforce
V þ  
² officially licensed retailers Eg. Large
privately owned retail company, retail chains etc.
V u  
² hand cart vendors, convenience
stores, paan/beedi shops, local kirana stores
ÄLarge number of working youth (median age 24)
ÄLarge number of working youth (median age 24)

ÄGrowing number of working women


ÄGrowing number of working women
ÄNuclear families living in urban areas
Ä oom in services sector
ÄNuclear families living in urban areas
Ä oom in services sector
V Huge investment in retail infrastructure
V Traditional markets replaced by new formats
V Development of mall culture, supermarket,
hypermarket, and departmental stores.
V Food entertainment shopping under one roof
V ÿPENCERÿ
V RPG
V Reliance
V TATA
V Future group
V Lack of efficient supply chain
V Inefficient Third part logistics services
V Absence of proactive channels
- Cold chains

- Logistics infrastructure

- warehousing

V Lack of skilled employees


V Inadequate quality control
V Variation in policy regimes across different states
V ÿtringent labour laws
V Lack of status as an industry therefore difficult to raise capital for expansion
V Violent protests by small retailers for closure over illegal shops
V Established in 1969. Top of Fortune 500 list in 2007
V 3 subsidiaries :
- ·al-Mart International
- ÿam·s Club

- ·al-Mart ÿtores Division Uÿ


V 9 Different retail formats
V Pricing ÿtrategy
- Low Pricing ÿtrategy ² ¶ Always low Prices·
- General merchandise prices ² set after price checks of K-Mart and Target
stores
- Food Prices ² set on basis of zones corresponding to food distribution
centres
Economical Transportation
Prices Cost ÿavings

Faster
Huge Volume
replenishment
of Purchases etter of merchandise
Discounts
to
Customers
V IT in ÿupply Chain Management
- ar codes for inventory tracking
- ÿatellite communication for co-ordination
- Electronically order placing to suppliers
- Use of RFID tags
V Think Global Act Local
- ·al-Mart international : international operations
- 3000 stores in 13 countries
- ÿuccesful in North and ÿouth America but not in
Germany and ÿouth Korea
- Restricted International approach : discriminatory in
entering international markets
V ·hy harti ?
- Market leader in Indian telecom market
- Thorough understanding of distribution in Indian
markets
- Fully aware and capable to succeed in complex
environment of Indian market
- Capability to attract FDI
V Joint Venture
- 2 different formats : franchised retail company &
wholesale cash and carry joint venture
- 50-50 venture for back end ÿC management
and wholesale cash and carry operations
- Also different contract ² ·almart sharing
technology & expertise to support retail stores
built by harti
- Aim to link farmers directly to retailers
- ÿtrong back end infrastructure ² Cold chain
logistics
V ðr tests s ll e i l c l si esses
V riticise f r t ei s ci ll res si le
c
V Wi el criticise f r r ctises s c s : re t r
rici , iscri i ti i st e , s ee i
s liers
V e li it I i ·s i e c lt r l f ct rs
V S l i e e t c lle es
- u ere el e sic l i fr str ct re
- ðr lit f rs, tr c i , rel ct ce t t
er tec l
- tti  t ile  l crete re siti
V Emergence of organised retail sector
V ·al-Mart·s joint venture with harti aimed at
capitalizing growing middle class
V harti ideal partner for ·al-Mart
V Many unique challenges in India to overcome
V If challenges tackled , this partnership could
transform Indian retail