55110458 indian retail industry final ppt

8/4/2019 55110458 Indian Retail Industry Final Ppt

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Indian Retail Industry

Presented by:Ravindra


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Timeline of Retailing in India

Source: Citigroup Research


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GDP growth and Retail

Retail, GDP growth Organized Retail in 2010


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Organized Vs UnorganizedRetail Sector

Organized Retail Sector Unorganized Retail Sector


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Organized Vs Unorganized Retail Sector

Factor Organized Retail Sector Unorganized RetailSector

Definition Modern form of retailing Traditional form of retailing

Examples Hypermarket, Retail chainetc.

Mom n Pop stores, handcart, pavement vendorsetc

Market Share 3% 97%

Market Growth 35% 6%

Challenges Poor supply chainmanagement, aggressiveexpansion etc.

Use of labour intensivetechnology, lack ofgovernment support etc.


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The organized players

Indian companies Future Group Reliance Retail Bharti Shoppers'Stop PyramidAditya Birla Group Subhiksha Spencer Group Tata Westside,

Tata Chroma

Foreign Players Nike (Single brand)

Levis (Single brand)

Wal-mart (JV)

Metro (Cash&Carry)


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Pantaloon Retail

Headquartered in Mumbai 450 stores across the countryemploying more than 18,000 people.

All India space- 5 mn sq.ft, expecting to reach 30 mn by2010.

Various segment including food & grocery, home

solutions, consumer electronics, Health & Beauty productetc.

Recent Innovations include e-commerce Hybrid Format of

Small shops


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Raheja Group

First Departmental store in India, SHOPPERS STOP

Member of IGDS

7,52,000 sq.ft. retail space with turnover of 6.75 millions

Crossword, Mothercare, Home stop etc.

MOU with Home retail group of UK

Plan to establish network of 55 hypermarkets across thecountry with sales turnover of US$ 100 million by2010.


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Reliance Retail More than 300 Reliance fresh store and first Reliance Mart

hypermarket in Ahmedabed

Expansion in two tier cities like Vijaywada, Pune, Ludhianaetc

Investment of Rs.30,000 cr to set up new formats of retail ,

expecting sales of Rs.90,000 cr by 2010


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Tata Retail Group

Established in 1998

Trent- subsidies of Tata group operates Westside and

Star India Bazaar, Croma

Plans to pen more than 27 stores across its retail formatsadding 1.5 mn sq.ft. of space in the next 12 DLF malls


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Aditya Birla Group

Strong presence in apparel- Madura Garments

Owned Brands like Louis Phillipe, Van Heusen, Allen

Solly, Peter England

Investment plan Rs.8000-9000 cr in the first 3 years till2010

MORE range of 15 supermarkets open at Nashik, Pune& other two tier cities


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Organized retail and volumegrowth

Total size of retail $300bln

Size of organized retail $8bln

% share of Organized retail 3%

Source: Economics times retail knowledge series


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Department Stores Hypermarkets Supermarkets andConv. Stores

Well established, limited

competitionEntrenched in IndianMindsetScore on shoppingexperience

Stress on branding

Price not critical as theycater to upper income class

Relatively new concept, but

already as big as departmentstores

Growing fast, butcompetition to intensify

Price Discount and WideVarieties act as key

attractionsKey to success will beefficient Supply Chains andStore locations

Main challenge to mom

and pop storesHow to compensate forfacilities that mom and popstores provide namely HomeDelivery and MonthlyCredit ?

Immense Competitions,building scale to achievecost efficiencies will becritical

Major Retail Formats


15/21Source: India Retail Report, 2007, Merrill Lynch

Market Profile of VariousFormats

Department Stores: Shopper Stop, Lifestyle, Pantaloons

Hypermarkets: Big Bazaar, Spencer

Supermarkets and Conv. Stores: Subhiksha, Trinethra


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Government Policies

51% FDI allowed in single-brand formats

100% FDI in cash-and-carry format

NO FDI in multi-brand stores ( like Wal-Mart)

Trends indicate that the FDI would open up in retailsector, however political consensus has to be reachedbefore that happens


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Growth Drivers Barriers to Entry

Consumption Boom, HigherIncomesFavorable DemographicsChanging Lifestyles andPreferencesReal estate boom

Manufacturing ReformsReduction in import duties-offering

Regulatory barriers Fragmented Suppliers Lack of infrastructure Supply Chain Complexities Lack of skilled HumanResource

Differential Taxation System Labor Legislation Clustering of Malls

Growth Drivers & Barriers


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Outlook and challenges

Strong long-term growth potential Severe cost pressure largely related to property rentals Profitability likely to remain low - patient capital should

survive but weak players likely to exit in the near term Consolidation is on the cards Driven more by traffic growth than ticket growth Convenience stores to remain integral part of retail

Need for catering to local flavors Internet retailing still to pick up in India


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Heard from the street

Four years after announcing its wholesale joint venturewith Bharti Enterprises, Walmart, the worlds largest retailcompany, is still waiting for the multi-brand retail sector inIndia to open for foreign direct investment (FDI).

Aditya Birla Retail, which runs stores under the Morebrand, plans capital spending of 2.5 billion rupees ($55.3million) during the fiscal year that ends in March 2012.


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Retail chain Shoppers Stop today said it may increaseprices of its products by 6-7 per cent from April this year inorder to offset the 10 per cent excise duty imposed onbranded apparel in the Budget 2011-12.

Walmart in talks to pick up stake in Future Group's BigBazaar


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THANK YOU

55110458 indian retail industry final ppt

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