PRESENTED BY: IRFAN BALSANIA B07

DIPINDER CHADHA B 08
RIZWAN QURESHI KUMAR NAIR B 37 B 31

Retailing: An overview

Retailing Worlds largest private industry US$ 6.6 trillion sales annually Indian retailing Largest employer after agriculture - 8%* of population Highest outlet density in world Around 12 mn outlets Still evolving as an industry Long way to go

An overview

Retailing: An overview

An overview

Wal-Mart Topmost global Fortune 500 company(3 Consecutive Years) Annual Sales of over US$ 250 bn Indias two largest retail player turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop)

Evolution of Indian retail

Historic/Rural Reach Traditional/Pervasiv e Reach Government Supported Modern Formats/ International

Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls PDS Outlets Khadi Stores Cooperatives Convenience Stores Mom and Pop/Kiranas Weekly Markets Village Fairs Melas
Source of Entertainment Neighborhood Stores/Convenience Availability/ Low Costs / Distribution Shopping Experience/Efficiency

Evolution of Indian retail

Indian retail

Informal retailing Sector Typically small retailers. Evasion of taxes Difficulty in enforcing tax collection mechanisms No monitoring of labor laws Formal Retailing Sector Typically large retailers Greater enforcement of taxation mechanisms High level of labor usage monitoring

Chain store format High street format Destination format Convenience store format

Family store
Specialty store Department store

Super market

Super store

Shopping mall

Hyper market

Discount format Every day low price(EDLP)format Category killer format Factory outlet format Single-price domination format

Stopover store format Kiosk

Categories of Indian retail

Indian retail

Corporate Houses Tatas: Tata Trent RPG group: Food World, Health and Glow, etc ITC: Wills Life Style Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc. Dedicated brand outlets Nike, Reebok, Zodiac etc Multi-brand outlets Vijay Sales, Croma etc Manufacturers/ Exporters Pantaloons, Bata, Weekender

Classifying Indian retail

Indian retail

Modern Format retailers Supermarkets (Foodworld) Hypermarkets (Big Bazaar) Department Stores (S Stop) Specialty Chains (Ikea) Company Owned Company Operated Traditional Format Retailers Kiranas: Traditional Mom and Pop Stores Kiosks Street Markets Exclusive /Multiple Brand Outlets

Large Indian retailers

Hypermarket

Big Bazaar Giants Shoprite Star Lifestyle Pantaloons Pyramids Shoppers Stop Trent Fame Adlabs Fun Republic Inox PVR

Department store

Indian retailers

Entertainment

The changing Indian consumer

Indian consumer

Greater per capita income Increase in disposable income of middle class households 20.9%* growth in real disposable income in 99-03. Growing high and middle income population Growing at a pace of over 10%* per annum over last decade Affordability growth Falling interest rates Easier consumer credit Greater variety and quality at all price points

The changing Indian consumer

The urban consumer Getting exposed to international lifestyles Inclined to acquiring asset More discerning and demanding than ever No longer need-based shopping Shopping is a family experience Changing Mindset Increasing tendency to spend Post Liberalization children coming of age 100 mn 17-21 year olds*. Tend to spend freely. Greater levels of education

Indian consumer

Challenges in the Industry

Low domestic competition Because of fragmented nature of industry

Industry Challenges

Lack of exposure to global best practices Low entry barriers for unorganized retailing Moderate entry barriers for organized retailing
Wholesale system under-invested leading to 20-40% wastage Non level playing field issues Wide differences in treatment of small and large retailers

Challenges

Real Estate Costs Supply Chain Inconsistency Poor Infrastructure Lack of Skilled Manpower

issues

Opportunities

Anticipated growth

Market size Current market size is roughly US$ 286 bn* 96% of the 12 Million stores are less than 500 Sq. ft. Sales from large format stores would rise by 24-49%** Formal and modern format retailing would enjoy rapid growth

Growth factors

Growth factors

Growth determining factors Government Policy Infrastructure development GDP growth Employment generation and job creation

The Indian advantage

India ranked 1st in the Global A.T Kearney Retail Development Index

Advantage India

India

Russia
China

Thank you