private labels in the indian retail sector · total 38 68 106 responses from 216 consumers of...

Private Labels in the Indian Retail Sector

15th April 2013

This is a confidential document solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for

distribution outside the client organization without prior written approval from Tata Strategic Management Group. This material

was used by Tata Strategic Management Group during an oral presentation; it is not a complete record of the discussion.

Report for the Italian Trade P romotion A g enc y


15th April, 2013

Background

• The Indian Organized Retail Landscape

• Private Label Opportunity in India

• Consumer Insights on Private Labels in India

• Italy in India

• Current Imports from Italy to India

• Private Label opportunity for Italian suppliers

• Summary

• Annexure

STRATEGIC MANAGEMENT GROUP 2 2

STRATEGIC MANAGEMENT GROUP

Multi Brand Outlet (MBO)

• An outlet is considered to be a MBO if:

It sells multiple brands within a product category

At least 1 3rd party owned national brand is sold along with exclusive brands

Exclusive Brand Outlet (EBO)

• An outlet is considered to be an EBO if it sells only owned/ exclusive brands across product categories

Private Label (PL):

• A brand is defined as a private label if:

The brand is only sold in the retail formats of the brand owner

The retail format selling the brand is an MBO

Fiscal Year (FY):

• Fiscal year (FY) refers to the period from April 1st to March 31st

Retail Selling Price (RSP)

• Also known as Maximum Retail Price (MRP) in India

The upper limit on the consumer price of the good sold by a retailer in India, that is inclusive of all

taxes

Exchange Rate Assumption

• A constant exchange rate of Rs 54 /USD is assumed throughout this document based on the average

historical exchange rate for 2012

Key definitions and assumptions



Primary research done for this study

Mumbai

Dehi

The findings of this study is based on

extensive primary interactions,

quantitative consumer research and

store visits across Mumbai & Delhi:

• Industry Player Interactions: 16

• Store Visits: 20

• Consumers: 216



Discussions were held with multiple industry stakeholders across segments to

capture their views on the Private Label market in India

INDUSTRY INTERACTIONS

Sector Organization

Food & Grocery

Future Group

Spencer’s

Reliance Select

Bharti Walmart

Le Marche

Apparel &

Fashion

Westside

Lifestyle International

Reliance Brands

Shoppers Stop

Sector Organization

Footwear

Metro Shoes

M&B Footwear

Reliance Footprint

Home

Improvement

HomeCenter

HomeStop

Stanley Boutique

Furniturewalla



STORE VISITS

These interactions were augmented with multiple store visits across Mumbai &

Delhi to develop an understanding of private label offerings by major retailers

Sector Format Visited

Food &

Grocery

Big Bazaar

Reliance Select

Easy Day

Le Marche

Godrej’s Nature Basket

Apparel &

Fashion

Accessories

Lifestyle

Central

Shoppers Stop

Globus

Westside

Sector Format Visited

Fashion

Accessories

Men Trendz

Accessorize

Footwear

Metro Shoes

Reliance Footprint

Bata

M&B

Home

Improvement

HomeStop

HomeCenter

HomeTown

Pure Home +Living


These interactions were supplemented with 216 consumer interviews across

Mumbai and Delhi to develop a detailed understanding of consumer preferences

CONSUMER RESEARCH: SAMPLE CONSTRUCT

Mumbai

Delhi

Category Male Female Total

Food & Grocery - 30 30

Apparel, Footwear &

Accessories 22 25 47

Furniture, Fittings and

Home Furnishings 17 16 33

Total 39 71 110

Category Male Female Total

Food & Grocery - 31 31

Apparel , Footwear &

Accessories 23 22 45

Furniture, Fittings and

Home Furnishings 15 15 30

Total 38 68 106

Responses from 216 consumers of Private Label across Mumbai and Delhi used to gather consumer insights

as part of the study


15th April, 2013

Background

The Indian Organized Retail Landscape

The Organized Retail opportunity



• Italy in India



• Summary

• Annexure



The Indian economy is today a USD 1.7 Trillion economy with a real GDP

growth rate in excess of 5%

INDIAN ECONOMY: NOMINAL GDP AND REAL GDP GROWTH RATE

Nominal GDP at Factor Cost (in USD Bn) Real GDP Growth Rate (%)

9.3%

6.7%

8.6% 9.3%

6.2%

5.0%

FY08 FY09 FY10 FY11 FY12 FY13E

Source: Reserve Bank of India

849 982

1,128

1,325

1,525

1,725

FY08 FY09 FY10 FY11 FY12 FY13E



India is expected to continue to exhibit strong growth of 6-7% over the next 5

years

Projected Real GDP Growth Rates (%)

INDIAN ECONOMY: GDP FORECASTS

5.0%

6.0%

6.5% 7.0% 7.0%

7.5%

FY13 FY14 FY15 FY16 FY17 FY18

Source: Reserve Bank of India, Analysis by Tata Strategic



FY08 FY13E

The products retail market in India contributes 27% to India’s GDP and is

valued at USD 465 Bn with Food & Grocery being the single largest segment

Indian Products Retail Market (In USD Bn)

INDIAN RETAIL SECTOR OVERVIEW

27%

225

465

16% p.a

Source: Images Retail, Analysis by Tata Strategic

Food & Grocery,

68%

Apparels & Accessorie

s, 9%

Consumer Electronics

, 6%

Jewellery, 5% Others,

12%

Products Retail Market- Segment Wise Split FY13 (%)

Contribution

to India’s

GDP



12,625

33,610

FY08 FY13E

However, organized products retail in India is still nascent at USD 33.6 Bn in

FY13 with penetration as low as 1% in large categories like Food & Grocery

Indian Organized Products1 Retail Market Size

(In USD Mn)

INDIAN ORGANIZED PRODUCTS RETAIL MARKET OVERVIEW

5.9% 7.2%

22% p.a


740

740

960

1320

1720

2200

2370

4500

5100

13960

Pharmacy

Beauty andPersonal Care

Leisure &Gifting

Watches &Eyewear

Footwear

Home &Interiors

Jewellery

Food & Grocery

ConsumerElectronics

Apparels &Accessories

Category Wise Size (In USD Mn)

33%

18%

1.4%

10%

15%

39%

37%

18%

13% Organized retail

share in Overall

Retail

Organized Retail

Penetration %

Notes : 1) Services retail is not included as a part of this study as the private label component is negligible for services retail

5%



The current FDI policy in retail allows 100% investment in single brand and 51%

investment in multi-brand retail in India

Single Brand Retail

• 100% FDI permitted subject to

Products to be sold should be of a “single” brand only

Products should be sold under the same brand in international markets and should be branded during

manufacture

Atleast 30% sourcing as an average of the 1st 5 years and then yearly thereafter from India preferably

from Medium or Small manufacturing enterprises

• E-commerce not permitted with FDI

Multi-Brand Retail

• 51% FDI permitted subject to

Minimum FDI of USD 100mn with minimum 50% investment in back-end infrastructure

Atleast 30% sourcing as an average of the first 5 years and then yearly thereafter from Indian small

enterprises with total plant & machinery assets less than USD 1mn

Outlets only in cities with greater than 1mn population and only in states that have explicitly permitted

FDI in multi-brand retail (currently 10 states and Union Territories)

• E-commerce not permitted with FDI

Source: DIPP Government of India; Analysis by Tata Strategic

INDIAN ORGANIZED RETAIL: FOREIGN DIRECT INVESTMENT( FDI) POLICY



However only select states have currently agreed to permit FDI in multi-brand

retail

Source: DIPP Government of India; Analysis by Tata Strategic

Andhra

Pradesh

Assam Delhi

Haryana

Jammu &

Kashmir

Maharashtra

Manipu

r

Rajasthan

Daman Dadra & Nagar

Haveli

Uttarakhan

d

Diu

INDIAN ORGANIZED RETAIL: FDI POLICY

States that have agreed to

FDI in multi-brand retail



INDIAN ORGANIZED RETAIL: FUTURE OUTLOOK

Source: Analysis by Tata Strategic

Given the positive trends playing out, the organized products retail market

opportunity in India is expected to grow to USD 91 Bn over the next five years

Organized Retail: Key Trends Organized Products Retail Market: Future Projections

(in USD Mn)

33,610

91,330

FY13E FY18F

22% p.a • Rising incomes and discretionary spending

• Life-stage / Attitude

• Growth of the luxury segment

• Continued entry of new retailers including

international retailers

• Accelerated expansion of existing retailers

• Emergence of distinct consumer segments with

varied needs and expectations

• Rapid growth in e-commerce : Pure online and

brick & click players

7% 10% Penetration

of Organized

Retail



Stores: 65

Footprint: 2.05 Mn sq ft

Food & Grocery

Notes : 1) Includes Food Bazaar 2) Mn Sq.ft: Million Square feet 3) Pantaloons format sold to Aditya Birla Group in FY13

INDIAN ORGANIZED RETAIL: MAJOR PLAYERS … (1/7)

Profile of major retailers in India: Future Group

Stores: 2051

Footprint: 8.61 Mn sq ft2

Key Formats across retail categories

Stores:135


Stores: 30


Apparel and Accessories3 Consumer Electronics

Stores:44

Footprint: 0.4 Mn sq Ft

Source: Images Retail, Crisil, Annual Reports, Business Press, Analysis by Tata Strategic

Future group is the largest retail player in India with:

Consolidated FY12 revenues of USD 2.4 Bn

Total retail footprint of ~17 Mn Sq Ft

Home Furnishing

Stores:39

Footprint:1.25 Mn sq ft



Apparel and Accessories

Stores: 70



Profile of major retailers in India: Tata Group

Tata group operates in the retail sector through: Trent Ltd, Titan Industries,

Infiniti Retail & Tata Global Beverages (Food service)

Consolidated FY12 revenues of > USD 2.1 Bn

Total retail footprint of > 5.8 Mn sq.ft


Stores: 85

Footprint: 0.7 Mn sqft

Watches, Jewellery and Eyewear

Stores: Watches-502, Jewelry- 168, Eyewear- 208


Food and Grocery

Stores: 15


Leisure

Stores: 21







Profile of major retailers in India: Reliance Industries

Reliance retail is a leading retail player in India even though it forayed into

retailing in 2006


Total retail footprint of over 7 Mn Sq Ft

Notes : 1) Footprint in category estimated based on number of stores and average store footprint 2) Includes 19 iStores


Food and Grocery

No of Stores: 20

Total footprint: 3 Mn sq ft


No of Stores:1232

Total footprint: 2.6 Mn sq ft

Footwear

No of Stores: 101


No of Stores: 104


No of Stores: 24


Apparels and Accessories

No of Stores: 650





Stores: 165


Food and Grocery

No of Stores: 500

Total footprint: 1.5 Mn sq ft1


Profile of major retailers in India: Aditya Birla Group


The largest premium apparels players in India

FY12 revenues of USD 0.8 Bn

Total retail footprint of ~4.5 Mn Sq Ft

Stores: 1100 EBOs


Apparels and Accessories

Notes : 1) Total footprint in category estimated based on number of stores and average store footprint

Stores: 14






Profile of major retailers in India: Landmark Group


Middle East based Landmark group entered India in 1999

FY12 revenues (from India operations) of USD 0.6 Bn


Stores: 33

Footprint:1.31Mn sq ft

Home Furnishing

Stores:14


Stores: 6

Footprint:0.06 Mn sq ft

Stores: 65


Food and Grocery

Stores:13







Cosmetics

Stores:44



Profile of major retailers in India: K Raheja Group


Pioneered the departmental store concept in India with Shoppers stop in 1991



Food & Grocery

Stores: 12



Stores:135

Footprint: 3.1 mn sq ft

Leisure

Stores: 81


Home Furnishing

Stores:11






Profile of major retailers in India: Bharti Enterprises & RPG Group


Stores: 170


Stores: 17


Food and Grocery


Stores: 18


Food and Grocery

Stores: 180

Footprint: 1.21 Mn Sq ft

Stores: 30

Footprint: 0.81 Mn Sq ft

Leisure

Stores: 48

Footprint: .11 Mn Sq ft



15th April, 2013

Background


Segment Wise Overview



• Italy in India



• Summary

• Annexure



ORGANIZED FOOD & GROCERY(F&G) RETAIL: MARKET OPPORTUNITY

Organized Food & Grocery retail market is valued at USD 4500 Mn in FY13 and

is expected to grow at 24% per annum to USD 13200 Mn by FY18

Organized Food & Grocery Retail Market Size (USD Mn) Estimated Share of Major Categories in

Organized Food & Grocery Retail- FY13 (%)

Food - Staples

31%

Food - Non Staples

27%

Beverages 16%

Personal Care 18%

Home care 8%

Source: Images Retail, Industry Interactions, Analysis by Tata Strategic

1% 1.4% Organized

Retail as % of

Overall Retail

2%

1670

4500

13200

FY08 FY13E FY18F

22% p.a

24% p.a


Parent Group Number of

Outlets1 City Presence1

Snapshot of the major players in the organized Food & Grocery retail

landscape

FY12 Revenues

(USD Mn)

Future Group

Reliance Industries

Aditya Birla Group

Bharti Enterprises

RPG Group

2052 90

1000+ 12

577

1875 12 States

159 51

Avenue Super Marts 57 17

140

Key Players

Source: Images Retail, Annual Reports, Business Press

Notes : 1) Number of outlets & cities present as on Sep 2012 2)Includes Food Bazaar 3) Revenues for FY11 4) Includes revenues from non Food & Grocery categories sold in the hypermarket format 5) Includes Easyday & Bharti Walmart outlets

1373,4

811

2244

2043

12803,4

347

http://www.google.com/imgres?um=1&hl=en&client=firefox-a&sa=N&rls=org.mozilla:en-US:official&biw=1280&bih=651&tbm=isch&tbnid=n7v3DsnBaerJnM:&imgrefurl=http://momeee.com/big-bazaar-6-days-mahabachat-scheme-mehangai-pe-halla-bol-details/&docid=xVN9Ho4nJioRQM&imgurl=http://cdn.momeee.com/wp-content/uploads/Big-Bazaar.jpg&w=300&h=360&ei=NiJDUZOLEY6Srgeo7IDoBw&zoom=1&ved=0CIABEIQcMAI&ved=1t:3588,r:2,s:0,i:128&iact=rc&dur=1351&page=1&tbnh=181&tbnw=146&start=0&ndsp=17&tx=38&ty=48

http://www.google.com/imgres?um=1&hl=en&client=firefox-a&rls=org.mozilla:en-US:official&biw=1280&bih=651&tbm=isch&tbnid=_9Jah-F5phfjOM:&imgrefurl=http://www.reliancetimeout.com/aboutus.html&docid=T2jZmD02vRsX3M&imgurl=http://www.reliancetimeout.com/images/rrlogos.jpg&w=562&h=351&ei=hyNDUanCGYjIrQe28YDoCg&zoom=1&sa=X&ved=0CFgQhBwwAw&ved=1t:3588,r:3,s:0,i:88

http://www.google.com/imgres?um=1&hl=en&client=firefox-a&rls=org.mozilla:en-US:official&biw=1280&bih=651&tbm=isch&tbnid=QUEc--uj8k9FVM:&imgrefurl=http://www.megamalls.in/announcements/news.php?Id=2085&docid=BgPFPFj-YBb61M&imgurl=http://www.megamalls.in/logos/reliancesuper_logo.jpg&w=100&h=82&ei=hyNDUanCGYjIrQe28YDoCg&zoom=1&sa=X&ved=0CHYQhBwwDQ&ved=1t:3588,r:13,s:0,i:118

http://en.wikipedia.org/wiki/File:Moreonly-logos.jpg



ORGANIZED APPAREL & FASHION ACCESSORIES1 RETAIL: MARKET OPPORTUNITY

Organized Apparel & Fashion Accessories retail market is valued at USD

~14000 Mn in FY13 and is expected to grow to USD 33400 Mn by FY18

Organized Apparel & Fashion Accessories Retail

Market Size (in USD Mn)

Estimated Share of Major Categories in Organized

Apparel & Fashion Accessories Retail- FY13 (%)

23% 33% 42%

5520

13960

33400

FY08 FY13E FY18F

20% p.a

19% p.a

Notes : 1) Eyewear & Watches excluded from fashion accessories market

Men's Formal

20%

Mens's Casual

30% Women's Western Formal

10%

Women's Casual &

Ethnic 25%

Kidswear 10%

Fashion Accessorie

s 5%


Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Apparel & Fashion Accessories

retail landscape

Future Group3

Landmark Group

K Raheja Corp Group

Rajan Raheja Group

65 32

32

53 23

41 27

Reliance Industries 35 32

20


7592

2962

Notes : 1) Number of outlets & cities present as on Sep 2012 2) FY11 revenues 3) Pantaloons has since de-merged its apparel and accessories retail business and sold majority stake in this new entity to the Aditya Birla Group in 2012

406

46

91


Outlets1 City Presence1 FY12 Revenues

(USD Mn) Key Players

Tata Group 70 61 152






ORGANIZED FOOTWEAR RETAIL: MARKET OPPORTUNITY

Organized Footwear retail market is valued at USD 1720 Mn in FY13 and is

expected to grow at 24% per annum to reach USD 5050 Mn by FY18

Organized Footwear Retail Market Size (in USD Mn) Estimated Share of Major Categories in

Organized Footwear Retail- FY13 (%)

22% 39% 45%

640 1720

5050

FY08 FY13E FY18F

22% p.a

24% p.a

Sports 30%

Men's Non Sport 35%

Women's Non Sport

30%

Kids 5%


Organized

Retail as % of

Overall Retail


Bata India Ltd 1,362 353

Metro Shoes Ltd 235 71

Reliance Industries 101 66

Khadims India Ltd 370

Snapshot of the major players in the organized Footwear retail landscape

200

3142

552

101

29




Notes : 1) Number of outlets & cities present as on Sep 2012 2) FY11 revenues







ORGANIZED HOME IMPROVEMENT RETAIL: MARKET OPPORTUNITY

Organized Home Improvement retail market is valued at USD 2200 Mn in FY13

and is expected to grow at 18% per annum to USD 5150 Mn by FY18

Organized Home Improvement Retail Market Size

(in USD Mn)

Estimated Share of Major Categories in

Organized Home Improvement Retail (%)

11% 15% 18%

930

2200

5150

FY08 FY13E FY18F

19% p.a

18% p.a

Fittings & Ceramics

48% Décor &

Furnishings

29%

Furniture 23%


Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Home Improvement retail

landscape

Adventz Group

Godrej Group

Future Group

Landmark Group

100+ 65

50+

39 18

15 8

K.Raheja Corp Group 39 18

18 280

65






352 Nilkamal Ltd 20 12

NA

NA

NA





600

1,320

3,050

FY08 FY13E FY18F

Organized Eyewear & Watches Retail Market Size (in USD Mn)

Organized Eyewear & Watches retail market is valued at USD 1320 Mn in FY13

and is expected to grow at ~18% per annum to USD 3050 Mn in the next 5 years


17% p.a

18% p.a

15% 17% 18%

ORGANIZED EYEWEAR & WATCHES RETAIL: MARKET OPPORTUNITY

Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Eyewear & Watches retail

landscape

FY12 Revenues

in Euros

Tata Group

Reliance Industries

Lawrence and Mayo

Tata Group

Timex Group

208 78

168 25

80

492 Titan +90 Fastrack 143

106 45

Ethos Watches 38 12

30

22

9.82

280

34

19






NA





2,370

9,500

FY08 FY13E FY18F

610

Organized Jewellery Retail Market Size (in USD Mn)

Organized Jewellery market is valued at USD 2370 Mn in FY13 and is expected

to grow at ~32% per annum to reach USD 9500 Mn by FY18


31% p.a

32% p.a

5% 10% 11%

ORGANIZED JEWELLERY RETAIL: MARKET OPPORTUNITY

Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Jewellery retail landscape

Tata Group

Gitanjali Group

Kalyan Jewellers

168 113

280 _

38 16

Joyallukas Ltd 35 7 states

Tara Jewels 30 19

1287

1297

1574




Notes : 1) Number of outlets & cities present as on Sep 2012


N/A

N/A





1720 5100

15600

FY08 FY13E FY18F

Organized Consumer Electronics Retail Market Size (in USD Mn)

Organized Consumer Electronics market is valued at USD 5100 Mn in FY13 and

is expected to grow at ~25% per annum to reach USD 15600 Mn by FY18


24% p.a

25% p.a

11% 18% 30%

ORGANIZED CONSUMER ELECTRONICS RETAIL1: MARKET OPPORTUNITY

Notes : 1) Including mobile phones & tablets

Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Consumer Electronics retail

landscape

Videocon Industries

Tata Group

Reliance Industries

Viveks Ltd

Vijay Sales

600 30

85 15

82

53 8

47 7

Future Group 44 11

_

231

364

83

2322

111






228





Organized Pharmacy Retail Market Size (in USD Mn)

Organized Pharmacy market retail is valued at USD 740 Mn in FY13 and is

expected to grow at 19% per annum to reach USD 1800 Mn by FY18


3% 5% 6%

ORGANIZED PHARMACY RETAIL: MARKET OPPORTUNITY

290

740

1800

FY08 FY13E FY18F

21% p.a

19% p.a

Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Pharmacy retail landscape

Apollo Hospitals

Medplusbeauty.com

Hetero Drugs

1400 N/A

1050+ 100

200 15

Fortis Healthcare 110 7

Guardian Lifecare Ltd 90 15

159

93

92






N/A

N/A





Organized Beauty and Personal Care Retail Market Size (in USD Mn)

Organized Beauty & Personal Care retail is valued at USD 750 Mn in FY13 and

is expected to grow at 27% per annum to reach USD 2450 Mn by FY18


9% 13% 22%

ORGANIZED BEAUTY AND PERSONAL CARE RETAIL: MARKET OPPORTUNITY

250 750

2450

FY08 FY13E FY18F

25% p.a

27% p.a

Organized

Retail as % of

Overall Retail


Dabur India Ltd 38 16

Shoppers Stop 22 10

J.V between Dairy

Farm International

and Arko Ltd

74 4

Planet Retail Group 80+

Snapshot of the major players in the organized beauty and personal care retail

landscape

30

8.1






NA

NA

NA





Organized Leisure & Gifting Retail Market Size (in USD Mn)

Organized Leisure & Gifting retail market is valued at USD 960 Mn in FY13 and

is expected to grow at 18% per annum to reach USD 2150 Mn by FY18


13% 18% 22%

ORGANIZED LEISURE & GIFTING RETAIL: MARKET OPPORTUNITY

410

960

2150

FY08 FY13E FY18F

19% p.a

18% p.a

Organized

Retail as % of

Overall Retail


Snapshot of the major players in the organized Leisure & Gifting retail

landscape

Archies Ltd

Ferns and Petals Ltd

K.Raheja Corp

Group

193 43

140 50

38 16

Tata Group 18 10

Videocon Industries 140+ 50

RPG Group 48 21

332

65

16

11






N/A

N/A





15th April, 2013

Background


Private Label Opportunity in India

Overview of the Indian Private Label Market


• Italy in India



• Summary

• Annexure

44


400

1,900

FY08 FY13E

While the private label market in India in FY13 is estimated at USD ~1900 Mn,

penetration across majority of categories is less than 10%

Private Label Market Size (In USD Mn)

PRIVATE LABEL: MARKET OPPORTUNITY IN INDIA


3% 5.5-6% PL Share in

organized

retail

37% p.a

15

15

20

30

125

155

280

510

755

Beauty &Personal Care

Pharmacy

Watches &Eyewear

Leisure &Gifting

ConsumerElectronics

Footwear

Home &Interiors

Food & Grocery

Apparels &Accessories

Private Label Size (In USD Mn)

Penetration of

PL in Organized

Retail%

5-6%

11-12%

8-9%

7-8%

2-3%

2-3%

1-2%

2%

2%



PRIVATE LABEL: VALUE PROPOSITION DEFINITIONS

Private label offerings can typically be classified as value, standard, masstige

or premium based on their price-quality proposition

Premium

Masstige

Standard

Value

Differentiated/ Superior quality PLs that offered at

a premium to compared to national brands

Similar/Superior quality PLs offered at similar

prices to national brands

Similar quality PLs offered at lower prices than

national brands

Lower quality PLs offered at much lower

prices compared to national brands

• In categories like apparel, accessories & footwear the perception of quality is largely driven by the

price points in which the private label operates

• In the home improvement segment, significant national brands do not exist in categories like

furniture. In such cases, PL proposition is largely driven by price positioning



Food & Grocery Multiple Offerings Limited Offerings No Offerings

Apparel & Fashion

Accessories

Multiple Offerings

No Offerings

Footwear Limited Offerings Multiple Offerings Limited Offerings

Home Improvement Limited Offerings Multiple Offerings Limited Offerings

Source: Store Visits, Industry Interactions

PRIVATE LABEL: CURRENT OFFERINGS BY RETAILERS ACROSS VALUE PROPOSITIONS

In India, private labels are predominantly present in the value, standard and

masstige segments

Category Value Standard Masstige Premium



Source: Store Visits

PRICE COMPARISON OF PL VS NATIONAL BRANDS: FOOD AND GROCERY RETAIL

Majority of the private label products are available at discounts or similar

prices compared to national brands

Category Product National

Brand

Price

(USD) Private Label

Price

(USD)

Discount to

National

Brand (%)

Food

Frozen Vegetables (.9

kg) Vadilal 1.8

Reliance

Select 1.8 -

Ketchup (1 lit) Kissan 2.1 Great Value 1.9 10%

Clarified Butter (1 lit) Warna 5.5 Fresh & Pure 4.9 10%

Beverages Fruit Juice (1 lit) Maaza 1.0 Great Value 1.0 -

Tea (1 kg) Tata Premium 5.9 Great Value 5 14%

Personal Care Body Wash (250 ml) Lux 1.8 Think Skin 0.9 52%

Home Care Glass Cleaner Colin 1.2 Great Value 1.1 10%

Illustrations for Select Products



A similar trend is observed across other key categories such as Apparel,

Accessories, Footwear and Home Improvement

Category Product National Brand Price

(USD) Private Label

Price

(USD)

Discount to

National Brand

(%)

Apparel

Men’s Formal Shirt Peter England 18.5 Acropolis 14.8 20%

Men’s Denim Flying Machine 36.5 Globus 35 3%

Women’s Formal

Top Park Avenue 18.5 Eliza Donatein 18.5 -

Men’s Polo T-Shirt Peter England 11 Quality

Essentials 6.5 42%

Accessories Handbag Fastrack 31 Austin Reed 31.5 -

Footwear Men’s Leather Shoe Red Tape 46.2 David Jones 46.2 -

Men’s Leather Shoe Clarks 120 DaVinchi 128 -6%

Home

Improvement

Bed Cover Bombay Dyeing 14.8 Dreamline 8.3 44%

Sofa Bed Fab Furnish 460 HomeStop 460 -


PRICE COMPARISON OF PL VS NATIONAL BRANDS: OTHER CATEGORIES




Domestic Sourcing International Sourcing

International Sourcing Domestic Sourcing

Vendor –

Domestic and

international

Consolidation

center

Central

Distribution

Centre

Regional

Distribution

center

Retailers Consumers

DOMESTIC

VENDORS

CENTRAL W/H REGIONAL W/H

REGIONAL W/H

RETAIL OUTLETS

RETAIL OUTLETS

PRIVATE LABEL: SUPPLY CHAIN STRUCTURE


Private labels in India are either domestically sourced/ manufactured or

imported from low cost manufacturing hubs

INTERNATIONAL

VENDORS



• Depending on the sourcing country and logistics costs, the import price (CIF) and thus pricing

competitiveness vis a vis domestic sourcing of product would vary

• In labor intensive categories, imported product cost from developed countries would itself be

significantly more expensive

PRIVATE LABEL: PRICE COMPETITIVENESS OF IMPORTED PRIVATE LABELS

Importing private labels typically results in a significant markup due to the duty

structure and shipping charges which could impact price competitiveness

Product Categories Domestic Supplier International Supplier

Manufacture Cost (MC) to

RSP Multiplier1 CIF to RSP Multiplier1

Pasta 2.1 x MC 2.9 x CIF

Olive Oil 2.0 x MC 3 x CIF

Coffee 1.9 x MC 4.1 x CIF

Wooden Furniture 2.3 x MC 2.7 x CIF

Men’s Suits/ Jackets 2.3 x MC 2.7 x CIF

Leather Footwear 2.5 x MC 2.9 x CIF

Illustrations for Select Categories

Notes : 1) Retailer margins and domestic freight charges assumed to be similar for both domestic and international suppliers

Source: CBEC, Analysis by Tata Strategic




PRIVATE LABEL: DOMINANT SOURCING LOCATION OF PRIVATE LABEL

Hence majority of the private labels in India are currently sourced domestically

or from low cost manufacturing hubs

Category Dominant Sourcing

Location Comments

Food & Beverages Domestic

No significant presence of international suppliers observed Home Care Domestic

Personal Care Domestic

Apparel Domestic

Fashion Accessories Domestic, China Non Leather handbags are imported from China

Footwear Domestic, China Leather footwear is domestically sourced. Chinese imports

observed in non leather footwear

Furnishings & Décor Domestic, SE Asia Décor items are imported from SE Asian countries like Thailand

Furniture Domestic, Malaysia, China Domestic sourcing primarily for low cost furniture in hypermarts

Most organized players import furniture from Malaysia or China

Electronics China, Domestic While sourcing is predominantly from China, select home

appliances are sourced domestically




PRIVATE LABEL: PREMIUM PRIVATE LABELS WITH GLOBAL SOURCING

In select categories, retailers have recently launched premium PL products

with international suppliers with designs in cases originating from Europe


Category Product Sourcing Model Salient Features

Footwear Premium Leather

Shoes

• Designed in Italy

• Leather sourced from India

• Manufacturing in China

• Access to latest Italian

designs

• Low cost Chinese

manufacturing

Personal Care Body Wash &

Moisturisers

• Directly imported from South

Africa

• Access to exotic beauty care

formulations

Furniture Sofas, Dinner Sets &

other Furniture

• European designs

• Manufactured and imported from

Malaysia

• Exploiting low cost

manufacturing hub for

masstige furniture in Malaysia


15th April, 2013

Background



Success Case Studies


• Italy in India



• Summary

• Annexure


Tasty Treat brand has managed to gain leadership position across several

Food and Beverage categories in Big Bazaar by playing on the value plank

CASE STUDY 1: TASTY TREAT BY BIG BAZAAR

• Ability to attract value-seeking customers with a clear proposition of same

quality, lower price (10-15%) as national brands

• Sourcing from local players ensured higher retailer margins despite

attractive consumer prices

• Managed to outsell leading national brands to be among top 2 brands sold

at Big Bazaar in multiple categories.

In-store Market Share %: 22% in Potato chips, 30% in Ketchups,18%

in cereals

Tasty Treat has succeeded in becoming a leading brand within Big Bazaar

across categories by providing similar quality products at highly competitive

prices vis a vis national brands

• Launched in early 2000s as Future Group’s F&B private label in Big Bazaar/

Food Bazaar

• Offerings: Wide range of F&B offerings such as Savory snacks, Soups,

Noodles, Pasta, Sauces, Spreads, Colas, Fruit based juices, Cereals and

Biscuits/ Cookies

About the Private Label

Achievements

Key Success Factors

Source: Business Press, Company Website


Melange by Lifestyle has been successful in creating a large customer base for

ethnic wear in the masstige segment by focusing on designs & fabric

CASE STUDY 2: MELANGE BY LIFESTYLE


• Successfully leveraged low brand affinity in the ethnic wear market

• Attracted young customers with contemporary designs and high quality

fabric available at same price as leading national brands

• ~USD 20 Mn revenues in first 3 years of operations

• Successfully spun off as an exclusive brand with stand alone stores in 2011

• Partnered with leading film personality to promote brand during film launch

Melange by Lifestyle created a strong brand name for itself in the largely

unbranded segment of ethnic wear by focusing on designs & fabric quality

• Ethnic wear private label of Lifestyle International launched in 2008

• Offerings: Men’s & Women’s ethnic apparel, footwear and fashion

accessories in the masstige price segment

About the Brand

Achievements

Success Factors


Sach, the first co-branded private label in India built on its association with

leading sportsperson to create a brand identity comparable to national brand

CASE STUDY 3: SACH BY BIG BAZAAR


• Leveraging its linkage with a national icon to promote the brand’s philosophy

• Positioned as honestly priced products with superior quality

• Launch of new products and offers revolving around major cricketing events

• Significant share of store sales in categories like oral care

35% in toothbrushes & 15-20% in toothpastes

• Successfully leveraged brand strength to diversify across product categories

in food & beverages, oral care and personal care

• Planning to launch the brand as a national brand in the coming year

Sach was developed as a private label brand comparable to any other national

brand by building on its association with India’s most famous celebrity

• Co-created private label launched by the Future group in 2008 in partnership

with Sachin Tendulkar, India’s leading sportsperson

• Sachin Tendulkar owns 10% stake in the product and is a member of the

board

• Offerings: Dairy, Fruit Juices, Oral care and Personal Care

About the Brand

Achievements

Key Success Factors


• Focused offerings targeting the young middle management executive

• Same quality apparel provided at lower prices than national brands

• Was the first Indian private label to embark on mass media campaigns

John Miller from Pantaloons is one of the first private label brands in India

which made a successful transition to an out of store brand

CASE STUDY 4: JOHN MILLER BY PANTALOON


• Spun off as a national brand in 2008

• Grown to become a USD 20 Mn brand in 2011

• Expanded to tier 2/3 cities through the franchisee route

• Expected to grow to a USD 80 Mn brand by FY17

• John Miller was the first private label brand in India to evolve into a national

brand

• Brand introduced in 1995 by Pantaloons

• Presence across categories like Shirts, Suits, Blazers, Trousers,

accessories and personal care

About the Brand

Achievements

Key Success Factors


15th April, 2013

Background



Private Labels in Food & Grocery Retail


• Italy in India



• Summary

• Annexure



Estimated PL share of

organized retail

Private Labels are today estimated to account for 11-12% in the Food & Grocery

category with food staples accounting for 72% of this market

Private Label In Food & Grocery Retail (USD Mn) Category Wise Split of PL sales in FY13 (USD Mn)

Source: Industry Interactions, Analysis by Tata Strategic

FOOD AND GROCERY RETAIL: PRIVATE LABEL MARKET SIZE

75

510

FY08 FY13E

47% p.a

4-5% 11-12% PL Share in

organized

retail

10

30

35

70

365

PersonalCare

Beverages

HomeCare

Food - NonStaples

Food-Staples 25-27%

5-7%

10-12%

3-5%

~1%



Player

Packaged Food Beverages Dairy

Staples Savory

Snacks

Biscuit

s

Sauces &

Spreads

Pasta/

Noodles

Confecti

onery

Edible

Oils

Fruit

Drinks

Tea/

Coffee

Carbona

ted

Drinks

Ambient Chilled

- - -

- - - - -

- - - -

- - - -

Today, while private labels offerings have proliferated across most food &

beverage categories, select opportunities continue to remain underexploited

Source: Store Visits, Company Websites, Business Press

FOOD AND GROCERY RETAIL: PRIVATE LABEL CATEGORY PRESENCE…(1/2)

Underexploited Categories



Home Care Personal Care

Player

House-

Cleanin

g

Fabric

Care Air Care

Cooking

&

Serving

Soaps

&

Washes

Oral

Care

Tissues

& Wipes

Hair

Care Cosmetics Diapers

- -

- -

-

-

Similarly, while PLs are present in most homecare categories, retailers have

been more selective in their entry into the Personal care space

Source: Store Visits, Company Websites, Business Press

FOOD AND GROCERY RETAIL: PRIVATE LABEL CATEGORY PRESENCE…(2/2)





FOOD AND GROCERY RETAIL: PRIVATE LABEL SIZE IN SELECT CATEGORIES

Today, PLs occupy a significant share across several categories in the Non-

Staples and Home care segments

Food - Non Staples

Category

Estimated PL

Share of

Organized Retail

Estimated PL

size in FY13 (in

USD Mn)

Biscuits 9-11% 19-23

Savory Snacks 14-16% 12-14

Sauces 34-36% 12-13

Breakfast Cereals 12-14% 8-9

Pasta & Noodles 12-14% 8-9

Home Care

Category

Estimated PL

Share of

Organized Retail

Estimated PL

size in FY13 (in

USD Mn)

Household

Cleaning 34-36% 21-23

Air care 12-13% 4-5

While biscuits and Household cleaning emerge as the largest Private Label segments, PLs have also

penetrated smaller high growth categories such as Sauces and Instant Noodles/ Pasta



Value

Most private label offerings are standard offerings comparable in quality to

national brands but offering a significant price advantage of 10-20%

Source: Store Visits, Company Website

Standard Masstige Premium

Reliance Value Calcident

Sudz

Golden

Harvest

FOOD AND GROCERY RETAIL: PRIVATE LABEL PRICE/VALUE PROPOSITION

Player

Endurf

Dazzle

Reliance

Select

Easy Choice

Mopez







The food & grocery private label opportunity is expected to grow at a 36% per

annum over the next five years to reach USD 2400 Mn by FY18

Private Label in Food & Grocery Retail: Key Trends Future Market Opportunity (in USD Mn)

510

2400

FY13E FY18F

36% p.a

11-12% 18-19% PL Share in

organized

retail

FOOD AND GROCERY RETAIL: PRIVATE LABEL OUTLOOK FOR FY18

• Private labels are expected to continue to dominate

low involvement categories like staples with 30-35%

share

• PL share expected to penetrate deeper into non-

staples categories with a share of ~15%

• In specific non-staples categories like biscuits,

savory snacks and breakfast cereals, retailers are

expected to increase Private Label contribution to

20-25% by

Matching national brands in product range

Increasing visibility/ shelf space of own

brands

• Growth is also expected from premium private label

presence in several gourmet food categories like

specialty cheese, olive oils and sauces & dressings


15th April, 2013

Background



Private Labels in Apparels and Fashion Accessories Retail


• Italy in India



• Summary

• Annexure



The Private Label Apparel & Fashion Accessories is estimated to be 5-6% of the

organized retail market and is valued at USD 750 Mn as of FY13

Private Label In Apparel & Fashion Accessories

Retail (in USD Mn)


APPAREL & FASHION ACCESSORIES RETAIL: PRIVATE LABEL MARKET SIZE

160

750

FY08 FY13E

2-3% 5-6% PL Share in

organized

retail

36% p.a

Organized Retail Split and PL Share by Format

Type (%)

Multi Brand Large

Format Stores 14-15%

EBOs/ Other small

MBOs 85-86%

40-45%

-

PL Share % Market Share %

Estimated Private Label Share in Organized

Retail: 5-6%



Major retailers offer private labels across categories in the Apparel & Fashion

Accessories segment

Player Men-Formal Men-

Casual

Woman-

Formal

Women-

Casual

Women-

Ethnic Kidswear Accessories

APPAREL & FASHION ACCESSORIES: PRIVATE LABEL CATEGORY PRESENCE




APPAREL & FASHION ACCESSORIES RETAIL: PRIVATE LABEL SIZE BY CATEGORY

Women’s casual & ethnic wear and men’s casual are the two largest private

label segments accounting for >50% of the market

Category Category Contribution

to Format Sales

Private Label Share in

Large Format MBOs

Estimated PL size in

FY13 (in USD Mn)

Men’s – Formals 20% 30-35% 105-125

Men’s – Casual 30% 24-26% 130-140

Women’s - Western

Formals 10% 55-60% 100-105

Women’s - Casual &

Ethnic 25% 55-60% 245-270

Kid’s Wear 10% 55-60% 100-105

Fashion Accessories 5% 40-45% 35-40


Most large format department stores today have private label presence across all the above segments


MBOs have focused on the standard & masstige segments for private labels

PRIVATE LABEL BRANDS AND POSITIONING1: APPARELS


Wesport

Fame

Forever

Luv

Gia

RangMantri

Ivory Tag Akrit

UMM

Ajile

JM Sports

Paprika

Sanna

Kashish

Eliza

Donatein

DJ&C

Roselle

Annabelle

Player

Westside

Language

Notes : 1) Classification driven by price points which influence the quality perception. For eg: Formal Shirt price benchmarks for category definition: Value: Less than $15 Standard: Between $15 & $30 Masstige: Between $30 & $45 Premium: Greater than $45

Value1 Standard1 Masstige1 Premium1







The private label opportunity in Organized Apparel & Fashion Accessories retail

is expected to grow to USD 2900 Mn in the next five years

Private Label in Apparel & Fashion Accessories

Retail: Key Trends

Future Market Opportunity (in USD Mn)

750

2900

FY13E FY18F

31% p.a


organized

retail

APPAREL & FASHION ACCESSORIES RETAIL: PRIVATE LABEL OUTLOOK FOR FY18

• The brand loyal men’s wear segment is expected to

have a PL share of 35-40% while in women’s wear a

PL share of 65-70% is expected

• Similarly in Kids-wear, limited national brand

availability and value driven buying behavior will see

PL share increasing to 65-70%

• PL share in fashion accessories like handbags is

expected to increase to ~50% with more variety

being offered by store brands

• Retailers are expected to introduce premium private

labels in categories like suits, coats, western and

ethnic formal wear


15th April, 2013

Background



Private Labels in Footwear Retail


• Italy in India



• Summary

• Annexure



Share of Private Label in Footwear category is estimated to be 8-9% of

organized retail and is valued at USD 155 Mn in FY13

Private Label In Footwear Retail (in USD Mn) Organized Retail Split and PL Share by Format

Type (%)


FOOTWEAR RETAIL: PRIVATE LABEL MARKET SIZE

50

155

FY08 FY13E


organized

retail

25% p.a

Notes : 1)Estimated Private Label share in a multi brand lifestyle departmental store

MBOs

Departmental

Stores

5-6%

12-15%

EBOs 79-83%

65-70%

35-40%

-

PL Share % Market Share % Format

Estimated Private Label Share in Organized Retail:

8-9%



With an exception of sports footwear, major retailers have introduced private

labels in all categories of footwear

Player Men-Formal Men-

Casual

Woman-

Formal

Women-

Sandals

and Ethnic

Sports

Footwear

Kids

footwear

-

-

-

FOOTWEAR RETAIL: PRIVATE LABEL CATEGORY PRESENCE





Non sport footwear emerges as the largest segment for private labels

accounting for >80% of the market


FOOTWEAR RETAIL: PRIVATE LABEL SIZE BY CATEGORY

Category

Category

Contribution to

Format Sales

Private Label Share in category % Estimated PL

size in FY13 (in

USD Mn) Departmental

Stores MBOs

Men’s Non Sport 35% 30-40% ~75-85% 60-70

Women’s Non Sport 30% 45-55% ~75-85% 55-65

Sport Footwear 30% 20-30% ~5-15% 10-20

Kids Footwear 5% 50-60% ~15-25% 10-12

• Most Multi Brand Outlets and Department stores have private label presence across most

segments except sports footwear where brands enjoy greater prominence



Value1

Most retailers have private label offerings in the Standard & masstige segments

with pricing similar to the competing national brands

PRIVATE LABEL BRANDS AND POSITIONING- FOOTWEAR

Da Vinchi

Standard1 Masstige1 Premium1

Signature

iWalk

Roselle

David Jones Wardrobe Azzuro

Head over Heels

Lemon &

Pepper

Paprika

Notes : 1) Classification driven by price points which influence the quality perception. For eg: Men’s Leather Shoe price benchmarks for category definition: Value: Less than $20 Standard: Between $20 & $40 Masstige: Between $40 & $75 Premium: Greater than $75


Player

Do not sell

products in

the value

segment







The private label opportunity in Footwear retail is expected to grow at 22% per

annum in the next five years to USD 530 Mn

Private Label in Footwear Retail: Key Trends Future Market Opportunity (in USD Mn)

155

530

FY13E FY18F

22% p.a

8-9% 10-11% PL Share in

organized

retail

FOOTWEAR RETAIL: PRIVATE LABEL OUTLOOK FOR FY18

• In sports footwear, private label share will continue to

remain relatively lower at 25-30% in departmental

stores due to their inability to compete with the sole

technology of leading national brands

• In Men’s non sports footwear, private label share is

expected to increase to 45-50% in departmental

stores with increased focus on masstige and

premium shoe segments

• In Women’s western and ethnic footwear the private

label share is expected to rise to 60-65% in

departmental stores aided by limited differentiation

between the national brands and private labels


15th April, 2013

Background



Private Labels in Home Improvement Retail


• Italy in India



• Summary

• Annexure



Share of Private Label in Home Improvement category is estimated to be 12-

13% of organized retail and is valued at USD 280 Mn in FY13

Private Label In Home Improvement Retail (USD Mn)


HOME IMPROVEMENT RETAIL: PRIVATE LABEL MARKET

80

280

FY08 FY13E

8-9% 12-

13% PL Share in

organized

retail

29% p.a

Notes : 1) Private Label share in a All-in-one format outlets

Organized Retail Split and PL Share by Format

Type (%)

All-in-one Large

Format MBOs 15-17%

EBOs/ Other

Small MBO

formats 83-85%

70-75%

-

PL Share % Market Share %

Estimated Private Label Share in Organized Retail:

12-13%



Player Furniture

Furnishing

and

Decoration

Fittings and Ceramics Private Label Brands

-

-

-

MBO retailers in Home Improvement sell most of their furniture and home

décor are positioned as masstige and sold under their store banners


HOME IMPROVEMENT RETAIL: PRIVATE LABEL CATEGORY PRESENCE AND MAJOR BRANDS

Songbird

Living

Essentials

Odele

Iqip Dreamline

Most major MBO players use the store name as the private label brand and position their

products in the masstige segment



Both furniture and décor categories is estimated to provide a significant

private label opportunity of ~USD 140 Mn each in FY13


FOOTWEAR RETAIL: PRIVATE LABEL SIZE BY CATEGORY

Category Category Contribution to

Format sales

Private Label Share

in MBO

Estimated PL size

in FY13 (in USD

Mn)

Fittings & Ceramics 5% ~0% ~0

Décor & Furnishings 57% 60-70% 130-150

Furniture 38% ~95% ~140




The private label opportunity in Home Improvement retail is expected to grow at

a 27% per annum in the next five years to USD 920 Mn

Private Label in Home Improvement Retail:

Key Trends Future Market Opportunity (in USD Mn)

280

920

FY13E FY18F

27% p.a

12-

13%

17-

18%

PL Share in

organized

retail

HOME IMPROVEMENT RETAIL: PRIVATE LABEL OUTLOOK FOR FY18

• Contribution of large All-in-One format stores is

expected to increase with significant investments

planned by the large retailers in this sector

• The furniture category will continue to be entirely

private label driven with organized players expected

to increase premium furniture offerings

• Private label share in décor & furnishings will

increase marginally to 70-75% aided by expanding

portfolio in categories like lighting & artifacts

• Private label offerings in fittings & ceramics is

expected to remain low at 2-5% due to highly

competitive branded presence


15th April, 2013

Background



Private Labels in Other Retail segments


• Italy in India



• Summary

• Annexure



The private label opportunity in other organized retail categories is estimated at

~USD 200 Mn in FY13 with Consumer Electronics being the largest segment

Estimated Private Label Opportunity in Other

Categories FY13 (in USD Mn)


OTHER RETAIL CATEGORIES: PRIVATE LABEL OPPORTUNITY

15

15

20

30

120

Beauty &Personal

Care

Pharmacy

Eyewear &Watches

Leisure &Gifting

ConsumerElectronics

2-3%

PL Share in

organized retail %

Major Private Label Brands

2-3%

1-2%

2%

2%


Future Market Opportunity in Other Retail

Categories (in USD Mn)

• Consumer electronics will contribute ~56% of

the total opportunity

• Private label share in organized Pharmacy

retail expected to increase to 10-12% with

most pharmacists introducing private labels in

OTC, supplements, generics and personal

care products

• In eyewear, majority of private label

contribution is expected to be in frames and

spectacle lenses

• Increase in private label contribution in

stationery & soft toys is expected to drive

growth in the Leisure private label opportunity

The private label opportunity in organized retail in these categories is expected

to grow at 39% per annum in the next five years to USD 1050 Mn


OTHER RETAIL CATEGORIES: PRIVATE LABEL FUTURE OUTLOOK

Key Insights

25 200

1050

FY08 FY13E FY18F

52% p.a

39% p.a


15th April, 2013

Background



Summary of Private Label Opportunity in India


• Italy in India



• Summary

• Annexure



400

1,900

7,800

FY08 FY13E FY18F


PRIVATE LABEL OPPORTUNITY IN INDIA: OUTLOOK FOR FY18

Thus, the overall private label opportunity in India is expected to grow at 35%

per annum over the next five years to USD 7.8 Bn by FY18

Private Label Market Opportunity in Indian Retail( in USD Mn)

37% p.a

35% p.a

USD ~5.9 Bn

incremental

opportunity

Category

Incremental PL

Opportunity (in

USD Bn)

Apparel & Fashion

Accessories

Food & Grocery

Home

Improvement

Footwear

Others

1.9

2.1

0.4

0.6

0.9

USD 5.9 Bn


15th April, 2013

Background



Consumer Insights on Private Labels in India

• Italy in India



• Summary

• Annexure



Source: Quantitative Consumer Research

Today, private label consumers are able to clearly distinguish them from

brands and are aware of their availability in specific retail outlets

ABILITY TO DISTINGUISH BETWEEN PRIVATE LABELS AND NATIONAL BRANDS

Key Parameters Food & Grocery Home

Improvement

Apparel,

Footwear &

Fashion

Accessories

Base number of respondents 61 63 92

Cannot distinguish private labels from national

brands 6% 21% 20%

Distinguish basis non availability in other retail

outlets 78% 79% 75%

All figures in % of respondents.

Note: All respondents were purchasers of private label




In the Food and Grocery segment, private labels form a part of day to day/

monthly shopping as well as impulse purchases

PRIVATE LABEL PREFERENCE BY SHOPPING OCCASION: FOOD & GROCERY

Shopping Occasions % of Respondents

Base number of respondents 61

Impulse purchase

Discounts/rebate/sales

Day to day shopping/ purchasing in small amounts

Bulk shopping

Planned shopping like monthly visits

% of respondents who prefer private labels over national brands during shopping occasion specified

59%

62%

64%

66%

70%

Note: All respondents had purchased private labels in the last 6 months




In apparels and accessories, private labels are preferred during bulk shopping,

impulse purchases and shopping for gift items

PRIVATE LABEL PREFERENCE BY SHOPPING OCCASION: APPAREL, FOOTWEAR AND ACCESSORIES



Bulk Shopping

Impulse Purchases

Purchasing items for Gifting

Festivals shopping



48%

51%

52%

62%

73%





Similarly in the Home Improvement segment, impulse purchases, bulk

shopping and gifting emerge as the top occasions for private label purchase

PRIVATE LABEL PREFERENCE BY SHOPPING OCCASION: HOME IMPROVEMENT RETAIL



Impulse purchase

Bulk shopping

Purchasing items for Gifting


Festivals shopping


49%

62%

63%

70%

78%





Price, quality, display, packaging and product range emerge as critical factors

influencing private label purchase in food & grocery categories

TOP FACTORS INFLUENCING PRIVATE LABEL PURCHASE: FOOD & GROCERY

Staples Non-Staples Home & Personal Care

Lower Price Better Quality Lower Price

Better Quality Display Better Quality

Display Lower Price Packaging

Product Range Packaging Display

Packaging Promotions/ Discounts Product Range

Relative ranking of % of respondents who ranked a factor among Top 3 factors influencing PL purchase

De

cre

as

ing

ord

er

of

Imp

ort

an

ce





In categories such as apparels and footwear, being in sync with latest design

trends emerges as a critical factor influencing private label purchase

TOP FACTORS INFLUENCING PRIVATE LABEL PURCHASE: APPARELS, FOOTWEAR & ACCESSORIES

Apparels Footwear Accessories

Latest designs Better Quality Lower Price

Better Quality Product Range Better Quality

Lower Price Latest designs Warranty/ Exchange/ Returns

Product Range Promotions/ Discounts Latest designs

Display Good Fit Product Range De

cre

as

ing

ord

er

of

Imp

ort

an

ce






In Home Improvement retail, warranties/exchanges/returns gains prominence

alongwith quality, price and product range/ design

TOP FACTORS INFLUENCING PRIVATE LABEL PURCHASE: HOME IMPROVEMENT RETAIL

Furniture & Fittings Home Decor

Better Quality Product Range

Lower Price Lower Price

Product Range Better Quality

Latest Designs Latest Designs

Warranty, Exchange/ Returns Warranty, Exchange/ Returns De

cre

as

ing

ord

er

of

Imp

ort

an

ce






In the branded Food & Grocery categories, more than 60% of Private label

consumers ranked private labels to be significantly better across parameters

CURRENT PERCEPTION OF PL VIS A VIS NATIONAL BRANDS: FOOD & GROCERY

Parameter Non Staples Home & Personal Care

Price 88% 72%

Quality 79% 74%

Packaging 63% 67%

Product Range 65% 59%

Product Innovation 70% 71%

% of respondents who ranked a Private Label to be “Better or Much Better” than National Brands on

various parameters

Note: Total Respondents: 61

All respondents had purchased private labels in the last 6 months




While private label consumers indicated high satisfaction in apparels and

accessories, the satisfaction levels were far lower in the footwear segment

CURRENT PERCEPTION OF PL VIS A VIS NATIONAL BRANDS: APPARELS, FOOTWEAR, ACCESSORIES

Parameter Apparels Accessories Footwear

Price 91% 64% 22%

Quality 75% 71% 27%

Design 63% 62% 27%

Product Range 77% 68% 30%


various parameters






In Home Improvement retail, more than 75% of private label consumers ranked

private labels to be better than national brands on various parameters

CURRENT PERCEPTION OF PL VIS A VIS NATIONAL BRANDS: HOME IMPROVEMENT RETAIL

Parameter Furniture & Fittings Home Decor

Price 97% 89%

Quality 73% 73%

Design 83% 73%

Durability 81% 75%

Product Range 73% 79%

Innovation 86% 81%


various parameters






35-50% of consumers also indicated a willingness to pay a premium for private

labels of much superior quality to brands

PREFERENCE FOR VARIOUS VALUE PROPOSITIONS BY CATEGORY

Value Proposition Vis a Vis

National Brands Food & Grocery

Apparel, Footwear &

Accessories Home Improvement

Slightly Lower Quality at Much

Lower Price 3% 0% 3%

Same Quality at Lower Price 36% 22% 19%

Superior Quality at Same Price 25% 27% 27%

Much Superior Quality at

Slightly Higher Price 36% 51% 51%

Total Respondents 61 92 63

% Preference for various value propositions

All respondents were purchasers of private labels

Untapped

opportunity


15th April, 2013

Background




Italy in India

Current Imports from Italy to India


• Summary

• Annexure



Food & Grocery

27%

Furniture & Décor 24%

Apparels & Fashion

Accessories

18%


9%

Footwear 8%

Jewellery 7%

Eyewear 7%

ITALY’S EXPORTS TO INDIA

Italy is one of India’s important trade partners with Italian imports to India

valued at ~USD 240 Mn; 3 categories account for ~70% of the imports

Italian Imports to India1 (in USD Mn)

104 127 121

163

241

FY07 FY08 FY09 FY10 FY11

24% p.a

Notes : 1) Only finished products that can be directly sold through retail sector considered.

Share of Major Retail Categories FY11 ( % )

Source: International Trade Center, Analysis by Tata Strategic

These imports are primarily in the form of branded products


In the Food & Grocery segment, Chocolates, Olive Oil, Cheese and Pasta are

the major products imported and sold as branded products in India

ITALIAN IMPORTS: FOOD & GROCERY

Source: International Trade Center, Store Visits, Industry Interactions, Analysis by Tata Strategic

Major Imports in Food & Grocery - FY111

(in USD Mn)

• Imports are marketed & sold under the Italian

company brand name

• Imported Italian private labels are not currently

observed in this category 0.6

1.3

1.5

2.9

7.4

8.5

Coffee

Pasta

Cheese

Kiwi Fruit

Olive Oil

ChocolateProducts

15%

35%

43%

55%

75%

42%

Share of India’s

Total Imports

Major Italian Brands in India



In the Home Improvement category, most of the imports are sold by the leading

Italian furniture players in India

ITALIAN IMPORTS: HOME IMPROVEMENT PRODUCTS

Major Imports in Home Improvement

Products - FY111 (in USD Mn)

• Leading Italian furniture players like Natuzzi, Chateau d'Ax, Giorgetti, Visionnaire, have entered India

in the last 5 years and sell Imported Italian furniture & décor

• In fittings & wash basins, branded Italian fittings like iB Rubinetteri are imported into India

• No Italian private labels observed in this category

3.4

7.1

54.8

Décor &Interiors

Fittings &Ceramics

Furniture 6%

6%

4%

Share of India’s

Total Imports


Ib Rubinetteri




In Apparel & Fashion accessories, imports from Italy are dominated by the

leading Italian luxury and fashion brands

ITALIAN IMPORTS: APPAREL & FASHION ACCESSORIES

Major Imports in Apparel & Fashion

Accessories- FY11 (in USD Mn)

• Import of Italian luxury & fashion brands sold in

boutique stores and EBOs

• No Italian private label products were observed in

Apparel & Fashion accessories retail

2.8

5.1

5.7

12.1

12.3

Non-LeatherAccessories

Suits &Coats

Perfumes

Clothing

LeatherAccessories 7%

8%

8%

23%

4%

Share of India’s

Total Imports





Similarly in categories like footwear and eyewear, imports are dominated by

branded Italian products

ITALIAN IMPORTS: FOOTWEAR & OTHER CATEGORIES

Imports in Other Categories: Footwear,

Eyewear & Jewellery - FY111 (in USD Mn)

• Most products in Eyewear, Footwear and Jewellery are imported and sold as Italian luxury and fashion brands

• India’s leading Jewellery player Gitanjali Group acquired 5 Italian brands Valente, Stefan Hafner, Nouvelle Bague,

IO SÌ and Porrati in 2011

• Imported Italian private labels not observed in these categories

8.2

14.4

15.3

Jewellery

Footwear

Eyewear 27%

8%

2%

Share of India’s

Total Imports





In the food & grocery segment, significant proportion of consumers perceive

Italian products to be much better than existing national brands

PERCEPTION ABOUT ITALIAN PRODUCTS: FOOD & GROCERY

Consumer Perception about Italian Food & Grocery Products Vis a Vis National Brands

Base number of respondents: 61. All existing consumers of Private Labels.

54% 43%

33%

3%

33% 52%

41%

46%

13% 3%

20%

34%

2% 7%

15%

2%

Quality Packaging Product Innovation Product Range

Much Worse

Worse

Neutral

Better

Much Better



In apparels, footwear & fashion accessories too, ~30% of consumers perceive

Italian products to be much better than national brands

PERCEPTION ABOUT ITALIAN PRODUCTS: APPAREL, FOOTWEAR & FASHION ACCESSORIES

Consumer Perception about Italian Apparel, Footwear & Fashion Accessories Vis a Vis National Brands


30% 29% 32%

35% 26%

47%

27%

27%

11%

3% 12%

7% 3% 4% 3% 1% 1% 1%

Quality Design Product Range

No Opnion

Much Worse

Worse

Neutral

Better

Much Better



In the home improvement market, while Italian products have a good quality

perception, design capabilities are not perceived as strongly

PERCEPTION ABOUT ITALIAN PRODUCTS: HOME IMPROVEMENT RETAIL

Consumer Perception about Italian Home Improvement Products


41%

14% 17% 6%

22%

32%

43%

63%

29%

43%

25% 41%

17%

63%

33%

2% 2% 2% 2% 2%

Quality Product Range Product Innovation Design Durability

No Opnion

Much Worse

Worse

Neutral

Better

Much Better




Source: Industry interactions

ITALIAN PRIVATE LABELS: VOICE OF RETAILERS

Interactions with multiple retailers confirmed that private label component of

Italian imports is negligible due to high costs associated with imports

“Private labels in India are positioned as lower priced

alternatives to national brands. With such a proposition

it is unviable to import our private label products from

Italy.”

-GM at a leading Food & Grocery retailer

“We tried to work with an Italian player and introduce a

private label in olive oil. However we weren’t able to

meet the minimum order quantity requirement of the

Italian vendor.”

-Sr Brand Manager of private brands for a leading Food

& Grocery retailer

“India, Bangladesh and Sri Lanka and Turkey are the

hubs for from which we source our products. Pricing

and MOQs are a key challenge for Italian suppliers

given their higher manufacturing costs, duties and

freight costs.”

- COO of a leading departmental chain

“Importing apparel from Italy would necessitate pricing

the private label similar to international brands like

Gant, French Connection and Espirit. We do not see

the opportunity for private labels to compete with these

brands at similar pricing”

-Head of retail operations for luxury brands franchisee

“We partner with Italian designers. However our shoes

are manufactured in China with leather supplied from

India”

-Head of merchandising for a leading MBO footwear

retailer

“Most retailers in India including us, import premium

furniture from Malaysia. We get to choose from a wide

range of European designs for much lower costs than

Italian furniture ”

- Merchandiser for Leading Home Improvement retailer



Source: Store visits, Secondary Research

ITALIAN NAMED BRANDS IN INDIA

However many Indian players have launched brands and private labels with

Italian names to leverage the positive perception around Italian products

Indian Brands with Italian Names

Da Vinci

Eliza Donatein

ILLUSTRATION

• Vettorio Fratini private label is positioned as a

masstige private label with Italian linkages

• The product label mentions “Authentic Italian

Clothing” and uses Italian colors extensively on

tags and labels

Indian Private Labels with Italian Names


Benetton is a leading example of an Italian brand which has succeeded in India

on account of its design capabilities alongwith local sourcing & manufacturing

CASE STUDY OF SUCCESSFUL ITALIAN BRAND IN INDIA: BENETTON


• Global collections designed in Italy

• Flexible localized merchandising strategy to satisfy local tastes

• Manufacturing in India ensured price competitiveness

• Presence across over 120 cities & towns with over 500 stores

• Revenues of USD 150 Mn from India operations in FY12

• Growth driven by smaller cities that contribute over 20% to growth

• Italian designs combined with low cost Indian manufacturing proved to be a

winning combination for Benetton in India

• Entry into India in 1991-92 and became wholly owned subsidiary in 2006

• Store network is a mix of owned and franchised stores

• Key brands are United Colors of Benetton (UCB) for casual wear and Sisley

for fashion wear

About Benetton India

Achievements

Key Success Factors


15th April, 2013

Background




Italy in India


Private Label opportunity for Italian suppliers

• Summary

• Annexure



Italian players could exploit their inherent strengths to leverage the private

label opportunity in India

Opportunities

Threats Weakness

Strengths

Italian

Private

Labels

• Capabilities in design and creativity

• Superior quality perception

• Access to technological/ process know how. Eg:

Suits, Leather Footwear, Furniture

• Availability of high quality raw material for select

categories. Eg: Olive Oil

• Positive impact of “Made in Italy” tag in categories

like food, fashion and furniture

• Gradual evolution of private labels from pure price

play to a more quality led propositions

• Largely unaddressed premium private label

opportunity

• Rising awareness of Italian products/ designs

among consumers

• Inability to compete with the prices offered by

local or other Asian manufacturers

• Difficulty in retailers being able to meet desired

MOQs of suppliers given the premium pricing

and fragmented nature of the retail market

• Limited experience of operating in India

• Availability of imitation Italian products from low

cost manufacturing hubs

• Competition from suppliers in other European

countries like Spain and France which enjoy an

equally positive perception among consumers



Source: Store Visits, Industry Interactions, Quantitative Consumer Research, Analysis by Tata Strategic

EVOLUTION OF INDIAN PRIVATE LABELS

Given the trajectory of private label evolution, the next decade is likely to

witness retailers in India exploring the untapped premium opportunity

Value

Standard

Masstige

Premium

Price Led

Strategy

Differentiation

Led Strategy

1990s 2012

% Consumers Willing to adopt

Premium1 Private Labels

• Food & Grocery: 36%

• Apparels, Footwear &

Accessories: 51%

• Home Improvement: 51%

Largely untapped

opportunity

Notes : 1) Defined as Private labels which offer Much superior quality at a Higher price compared to National brands



Italian vendors can choose to thus play in either the masstige or the premium

segment which would have an impact on the mode of entry


Potential Entry

Options for

Italian Private

Label

Masstige

Offering

Premium Offering

Superior quality to national

brands at a comparable price

Much superior quality to

national brands at a slight

premium

Value Proposition

Partner with suppliers in India

or other low cost

manufacturing hubs

Direct import of finished

goods by Indian retailers

Entry Mode

ITALIAN PRIVATE LABELS: POTENTIAL ENTRY OPTIONS



ITALIAN PRIVATE LABELS: INDIA ENTRY OPTIONS

While direct imports entail certain inherent advantages, the associated duties

and freight costs limit the pricing power and hence addressable opportunity

Direct imports by Indian retailers Partner with low cost Indian/International

suppliers

2 1

Pros:

• Ability to leverage “Made in Italy” tag

• Control over sourcing of raw material and quality

control

Cons:

• Significantly higher RSP due to duties and freight

costs which limit addressable opportunity

• Potentially more difficult to meet MOQs given

lower volumes and the fragmented retail market

Flow of goods

Pros:

• Lower manufacturing costs while still leveraging

specific Italian capabilities. Eg. Strength in design

• Ability to address a larger share of the private label

opportunity through more competitive pricing

Cons:

• Difficulty in highlighting Italian connection without

“Made in Italy” tag

• Quality control could be a challenge

• Need to ensure protection of IP & trade secrets



Source: Alibaba, Primary Interactions, Analysis by Tata Strategic

ITALIAN PRIVATE LABELS: PRICE BUILD-UP EXAMPLES

For example, while direct imports for private labels may be feasible in premium

categories like olive oil, it would be difficult in categories like footwear

Extra Virgin Olive Oil 1 L (in USD)

3.4 2.0

3.6 1.3

1.8 12.0

ExpectedCIF

Duties &Freight

RetailerMargins

VAT Discounton Private

Label

RSP ofNationalBrand

Premium Men’s Leather Footwear (in USD)

34 12 37

12 17 111

ExpectedCIF

Duties &Freight

RetailerMargins

VAT Discount onPrivateLabel

RSP ofNationalBrand

Notes : 1) Delmonte Extra Virgin Olive Oil considered 2) Lower end FOB prices from Alibaba supplier list 3)Clarks & Samsonite Men’s oxford shoes 4) Freight charges of 1.5% of landing costs assumed

RSP of national brand1 12

Private label price

(@15% discount) 10.2

Estimated Gross Margin of

Retailer 40%-50%

Price build-up (in USD)

RSP of national brand3 110

Private label price

(@15% discount) 94

Estimated Gross Margin of

Retailer 45%-55%

Price build-up (in USD)

4 4

FOB from Italian

Vendors2: 3.1-3.3

MOQ2: ~15000 litres

FOB from Italian

Vendors2: 55-65

MOQ2: ~200 pairs

Possibility of bridging price gap

while negotiating commercials

However MOQ fulfillment will be

an issue for Indian retailers

Significant price gap between

expected CIF and the current

FOB offered by Italian vendors




IDENTIFYING PRODUCT CATEGORIES WITH PRIVATE LABEL OPPORTUNITY IN INDIA

Italian suppliers hence need to carefully identify the categories where they can

leverage their inherent capability advantages for entry

Does my product have a competitive advantage through Italian designs or product formulation?

Does my product have a competitive advantage through sourcing of raw material from Italy?

Do I have a significant competitive advantage in manufacturing capabilities or process know how?

Does the product category benefit significantly from the “Made in Italy” association?

Supply-side factors to be assessed to identify product categories with Private Label opportunity in India

For example: Olives from Italy

For example: Italian designs for furniture, authentic formulation of pasta sauce

For example: Cheese making & ageing process for Parmesan cheese

For example: Made in Italy association with leather footwear and suits



Source: Industry interactions, Analysis by Tata Strategic

ITALIAN PRIVATE LABELS: SELECT CATEGORIES WITH POTENTIAL

Based on discussions with industry personnel, Italian private labels could be

explored in several food and non-food categories

INDICATIVE LIST

Specialty Cheese

Olive Oil Pasta Chocolate

Pasta Sauce Frozen Pizza

Leather Accessories

Perfumes

Leather Footwear

Cosmetics

Suits & Coats

Shirts & Trousers

Furniture & Sofas

Food Non Food



INDIA ENTRY OPTION: EVALUATION APPROACH… (1/5)

Italian suppliers would need to adopt a structured approach to decide their

India entry strategy

Develop a preliminary understanding of the

Indian market for the category

Determine the price premium for your imported

product vis a vis existing national brands

Is the

premium

justifiable

?

Identify retailers to partner

Determine ways to reduce MOQ

Is MOQ

being

met?

Supply to retailer

Identify potential partnership

opportunities with low cost suppliers

Yes No

Yes No

1

2

4a

4b

6a 6b

3

5




Step 1 : Develop a preliminary understanding of the Indian market for the category

• Refer to the organized retail section to understand the size and major retailers in the specific

retail sub-category of interest

Step 2 : Determine the price premium for your imported product vis a vis national brands

• Determine the RSP price for your product in the Indian market based on your expected CIF and

the typical CIF to RSP multipliers for the category. (Refer to the annexures for details on duties

applicable to product. For further details on duties refer to www.cbec.gov.in/

• Compare the price with the RSP of leading national brands in the product category, which could

be obtained from common e-commerce portals such as:

www.aaramshop.com for Food & Grocery

www.shoppersstop.com, www.jabong.com for Apparel & Fashion Accessories, Footwear

www.flipkart.com for other categories

http://www.cbec.gov.in/

http://www.aaramshop.com/

http://www.shoppersstop.com/

http://www.jabong.com/

http://www.flipkart.com/




Step 3 : Decide if the price premium for the imported product is justifiable in the Indian market

• Determine if the price premium for your imported Italian private label is justifiable in the

marketplace based on demonstrable superiority in quality, design etc.

Step 4a: Identify retailers to partner

• If the price premium can be justified, identify retailers who would be interested in selling your

product as private labels

• The indicative list of major retailers for each category is mentioned in the annexures for reference

• Additional information about the retailers can be obtained by visiting their individual websites




Step 4b : Identify potential partnership opportunities with low cost suppliers

• If the price premium is not justifiable, identify low cost Indian or international suppliers to partner

with either through transfer of technology/design or through financial investment avenues

• An indicative list of Indian suppliers alongwith contact details for major categories is mentioned in

the annexures for reference

Step 5 : Is your Minimum Order Quantity (MOQ) being fulfilled by retailers

• The retail landscape in India is fragmented and many of the categories of interest to Italian

suppliers are still nascent.

• Based on your interactions with retailers identify if your MOQ can be met by a single retailer




Step 6a : Develop a supplier relationship with the retailers

• If the retailer can meet the MOQ specified, establish a supplier relationship with the retailer

• Ensure that all the regulations in terms of packaging & labelling (mentioned in the annexures) are

adhered to

Step 6b: Determine ways to reduce MOQ or aggregate orders across retailers

• If the MOQ cannot be met by the retailers, explore opportunities to reduce MOQ


15th April, 2013

Background




Italy in India



Summary

• Annexure

125


The Indian organized products retailing opportunity is estimated to be USD 33.6 Bn in FY13 and is

expected to grow at a 22% per annum to USD 91.3 Bn in FY18

Summary of Key Findings

PLs in India are dominant in the value, Standard and Masstige segments. The premium PL opportunity is

largely untapped. Italian manufacturers can explore opportunities in the masstige / premium segments

Product categories where Italy can justify a price premium through demonstrable capabilities are attractive

for PL. Eg: Olive Oil, Pasta , Perfumes and Suits, Footwear, Accessories etc.

Apparels & Fashion Accessories, Food & Grocery, Home Improvement products and Footwear account

for 89% of the PL opportunity. These are also the most important categories for Italian imports to India

Private label (PL) opportunity is estimated at USD 1.9 Bn or 5-6% of this market in FY13. It is expected to

grow at 35% per annum to USD 7.8 Bn by FY18, accounting for 8.5-9% of the organized retail market

To tap the premium segment, direct import model could be adopted. To tap the masstige segment,

partnership opportunities with low cost suppliers need to be explored to lower costs.

Innovative means to lower price / MOQs will be critical to address the PL opportunity in India


15th April, 2013

Background




Italy in India



Summary

Annexure

Duties, Tariffs and Regulatory Requirements for Import

• List of Organized Retailers and Private Label Suppliers


STRATEGIC MANAGEMENT GROUP Notes : 1) Detailed in subsequent slides

Source: Central Board of Excise and Customs

Overview of the tariff structure for products imported into India

S.No. Duty/Tax/Charge Levied on Rate

1 Landing Charges (LC) CIF (Cost Insurance and freight) 1%

2 Basic Customs Duty (BCD) CIF+LC Category Specific1

3 Countervailing Duty (CVD) CIF+LC+ BCD

or RSP excluding abatement

Category Specific1

4 Education Cess on CVD (EC1) CVD 3%

5 Education Cess on customs duty (EC2) BCD 3%

6 Special Additional Duty CIF+LC+BCD+CVD+

EC1+EC2 4%


Notes : 1) Preferential Areas include MERCOSUR, ASEAN, China and Nepal 2) Only on Tea and Tea Waste 3) Including meats 4) Sausages have tariff of 100%

Tariff rates for select Food & Beverage products

BASIC TARIFF STRUCTURE OF POTENTIAL COMMODITIES (1/2)


Description Basic

Tariff

Preferential

Area Tariff1 CVD RSP Based

(Y/N)

Abatement

%

Olive oil and others 40-45% 20-30% 6% N -

Chocolate with Cocoa ,Fruit Juice 30-35% - 6-12% Y 30%

Fresh Fruits 30-50% 20-40% NIL - -

Coffee, Tea and Mate 100% 100% less 13-

26 p per kg.

Rs1 per Kg 2 - -

Condiments and Spices 30-70% 22.5- 62.5% Nil - -

Dairy Products, Eggs 30-60% - Nil - -

Alcoholic Beverages and Soft

Drinks concentrates

100-150% - 12% N -

Bakery Products 30-45% - 6-12% Y 30%

Pasta 30% - 6% Y 35%

Sauces and Food Preparations3,4 30% - 12% Y 35%

Vegetables 30-50% 20-40% Nil - -


Tariff rates for other important categories

BASIC TARIFF STRUCTURE OF POTENTIAL COMMODITIES (2/2)


Certain Import Restrictions

Special Import License: Certain products in each category require a special import license before

being imported like fur

Canalized Products: Certain canalized products can only be imported through specific channels or

government agencies .Eg Oils and seeds (State Trading Corporation and Hindustan Vegetable Oils);

and cereals (Food Corporation of India)

Description Basic Tariff Preferential

Area Tariff CVD

RSP Based

(Y/N)

Abatement

%

Furniture and Furnishings 10% _ 12% Y 45%1

Clothing and Fashion

Accessories

10% or upto INR 300

(~5.5 USD) per piece2

_ 12% N -

Consumer Electronics,

Household appliances and

Fittings

Free-10% _ 12% Y 35-40%

Footwear 10% _ 12% Y 40%

Jewellery 10% _ Nil-12% N -

Eyewear 10% _ 6-12% N -

Watches 10% per unit 12% Y 30-45%

Notes : 1) Abatement is only on Ceramic products 2) Whichever is higher


Documentation required for customs clearance

Originals of Commercial invoice

Packing List

Insurance Certificate/ Cover note

Purchase order and Letter of credit

Certificate of Origin

Bill of Lading

Packaging and Labeling

Imported products should follow labeling norms as per Weights and Measures Act

Labeling should be in English or Hindi and words indicating country of origin should be as large and

prominent as any other English wording on package of label.

Labeling must be complete before products are presented for customs clearance

For imported foods, the name and address of the importer must be indicated on the label. Where the food

comes in bulk containers for repacking or bottling, additional details on the country of origin as well as the

name and address of the packing unit must e given on each and every pack.

Overview of the packaging & labelling norms as well as documents required for

customs clearance while importing products to India



15th April, 2013

Background




Italy in India



Summary

Annexure

Duties, Tariffs and Regulatory Requirements for Import

List of Organized Retailers and Private Label Suppliers


List of organized Apparel & Fashion Accessories retailers in India…(1/2)

SR

No Company Name City

1 Aarvee Denims and Exports Limited

Ahmedabad

2 Aditya Birla Retail Limited Mumbai

3 Agwani Fashions Private Limited Howrah

4 Amaze Kolkata

5 And Designs India Limited Mumbai

6 Arvind Limited Bengaluru

7 Bombay Dyeing and Manufacturing

Company Limited Mumbai

8 Bombay Swadeshi Stores Limited Mumbai

9 Brandhouse Retails Limited Mumbai

10 Century Textile & Industries Ltd Mumbai

11 ColorPlus Fashions Limited Chennai

12 Cotton County Retail Limited Ludhiana

13 Ebony Retail Holdings Limited New Delhi

14 Fabindia Overseas Private Limited New Delhi

SR


15 Gatha Apparels Private Limited

Kolkata

16 Gini & Jony Limited Mumbai

17 Hypercity Retail (India) Limited Mumbai

18 ITC Limited Kolkata

19 Jain Amar Clothing Private Limited Ludhiana

20 Kalanjali Arts & Crafts Hyderabad

21 Koutons Retail India Limited* Gurgaon

22 Lifestyle International Private Limited Bengaluru

23 Lilliput Kidswear Limited New Delhi

24 Little Shop Kolkata

25 Liverpool Retail India Limited Ahmedabad

26 Loot (India) Private Limited, The Mumbai

27 Madura Garments Lifestyle & Retail

Limited Bengaluru


List of organized Apparel & Fashion Accessories retailers in India…(2/2)

SR


28 Maya Global Private Limited Mumbai

29 METRO Cash and Carry India

Private Limited Bengaluru

30 Nike India Private Limited Bengaluru

31 Pantaloon Retail (India) Limited Mumbai

32 Provogue (India) Limited Mumbai

33 Raymond Apparel Limited Mumbai

34 Raymond Limited Mumbai

35 Reliance Retail Limited Mumbai

36 Remanika Fashions Mumbai

37 Royal Classic Mills (Private)

Limited Tirupur

38 Sheetal Design Studio Mumbai

39 Shopper’s Stop Limited Mumbai

40 Spencer’s Retail Limited Kolkata

41 Spykar Lifestyles Private Limited Mumbai

42 TCNS Clothing Company Private

Limited New Delhi

SR No Company Name City

43 Trent Limited Mumbai

44 Vah Magna Retail Private Limited Hyderaba

d

45 Varkeys Retail Ventures Private

Limited Kochi

46 Viraj Exports Private Limited Noida

47 Vishal Retail Limited New Delhi


List of organized Food & Grocery retailers in India

SR



2 Express Retail Services Private Limited New Delhi


4 Indage Restaurants & Leisure Limited Mumbai

5

METRO Cash and Carry India Private

Limited Bengaluru

6 Nilgiris Dairy Farm Private Limited Bengaluru




10 Vah Magna Retail Private Limited Hyderabad

11 Varkeys Retail Ventures Private Limited Kochi


13 Wadhawan Food Retail Private Limited Mumbai

14 Apna Bazaar Hyderabad


15 REI Agro Limited Delhi

16 Heritage Foods India Ltd Hyderabad

17 Dairy Farms International Group

18 Arambagh Hatcheries Limited Kolkata

19 Namdhari's Fresh Bangalore

20 ITC Group Kolkata

21 Nuts 'n' Spices Chennai

22 Marche Retail Pvt. Ltd. New Dehi

23 Bharti Walmart Private Ltd New Delhi

24 Magnet Hypermarket Mumbai

25 Max Hypermarkets India Pvt. Ltd1 Bangalore


List of organized Footwear retailers in India

SR



2 Bata India Limited Kolkata

3 Catwalk Worldwide Private Limited Mumbai



6 Khadim India Limited Kolkata

7 Liberty Retail Revolutions Limited New Delhi


9 Loot (India) Private Limited, The Mumbai



11 Metro Shoes Limited Mumbai

12 Nike India Private Limited Bengaluru

13 Nik-Nish Retail Limited Kolkata






18 Touristor Shoes Private Limited Kolkata




List of organized Jewellery retailers in India

SR


1 B G Fashions Private Limited New Delhi

2 Diagold Jewels Private Limited Kolkata



5 Infinity Decoratives Private Limited Kolkata

6 Just Lifestyle Private Limited Mumbai

7 Kirtilal Kalidas Jewellers Private

Limited Coimbatore

8 Liberty Retail Revolutions Limited New Delhi




12 Rajesh Exports Limited Bengaluru




15 Suashish Diamonds Limited Mumbai

16 Titan Industries Limited Bengaluru


18 Tribhovandas Bhimji Zaveri Private

Limited Mumbai


List of organized Leisure & Gifting retailers in India

SR



2 Archies Limited New Delhi

3 EBD Book Cafe Private Limited New Delhi


5 Express Retail Services Private

Limited New Delhi



8 Mohan Impression Private Limited Kolkata


10 Odyssey India Limited Chennai



13 Rhythm House Private Limited Mumbai






List of organized Consumer Durables retailers in India

SR



2 AFL Private Limited Mumbai

3 Home Solutions Retail (India) Limited Mumbai


5 Infiniti Retail Limited Mumbai



7 Next Retail India Limited Ahmedabad


9 QRS Retail Limited Kottayam




13 Sumaria Appliances Private Limited Mumbai



15 Vijay Sales Mumbai

16 Vivek Limited Chennai


List of organized Eyewear & Watches retailers in India

SR



2 Citizen Watches (India) Private

Limited Bengaluru

3 Gangar Opticians Private Limited Mumbai


5 GKB Lens Private Limited Kolkata



8 Lawrence & Mayo Private Limited Mumbai






13 Titan Industries Limited Bengaluru



List of organized Home Improvement retailers in India

SR




3 Durian Industries Limited Mumbai



Limited New Delhi


7 Godrej & Boyce Manufacturing

Company Limited Mumbai

8 Home Solutions Retail (India) Limited Mumbai


10 Kalanjali Arts & Crafts Hyderabad





14 Nilkamal Limited Mumbai








21 Wadhawan Food Retail Private Limited Mumbai

22 Welspun Retail Limited Mumbai


List of organized Pharmacists & Beauty Care retailers in India

SR



2 Apollo Hospitals Enterprise Limited Chennai

3 Bodycraft Spa & Salon Bengaluru


5 Dr Batras’ Positive Health Clinic

Private Limited Mumbai



Limited New Delhi


9 Himalaya Drug Company Private

Limited Bengaluru




13 MedPlus Health Services Private

Limited Hyderabad







19 VLCC Health Care Limited New Delhi


Indian Private Label supplier details: Food & Beverages…(1/2)

Company Name City Category Contact Details Email

Aatash Foods Mumbai Canned Goods 91222769138 [email protected]

Forstar Instafoods Mumbai RTE Foods 912227410807 [email protected]

Lifestyle Foods Pvt. Ltd. Delhi Spices 911146370000 [email protected]

Madhu Jayanti Int Ltd Kolkata Tea 913365522950 [email protected]

Melting Momentz Mumbai Sweets 912228789107 [email protected]

Mohani Tea Leaves (P) Ltd Noida Tea 917827050186 [email protected]

Neel Beverages Private Limited Mumbai Drinks 912226126501/2 [email protected]

Plus Beverages Mumbai Tea 919821112568 [email protected]

Prabhat Dairy Pvt Ltd Rahata Drinks 912422265666 [email protected]

Saraf Trading Corporation Pvt. Ltd. Kochi Drinks 914843012299 [email protected]

Sitarameshwaram Foods Pvt. Ltd. Jaipur Canned Goods 911412565593 [email protected]

The Vanity Case Group Of Companies Mumbai Drinks 912242259246 [email protected]

VaishVik Foods Pvt Ltd. Pune Canned Goods 912024391881/0444 [email protected]

Source: Store Visits, Industry Interactions, Secondary Research, Private Label India Expo


Indian Private Label supplier details: Food & Beverages…(2/2)


Indo-Brine Industries Gandhidham Salt 91-02836231295 -

Sal Transport Ltd - Staples - -

Jyothi Industries - Pulses - -

Jayshree Industries Kolkata Tea 91-03322827531 [email protected]

Goodrich Industries - Tea - -

Apis Corporation New Delhi Honey 91-01143206666 [email protected]

Hello Indo Industries Indore Savory Snacks 91-07314040008 -

Tirupathi foods Delhi Sugar 91-01127152547 -

Mrs Bector Phillaur Ketchup 91-01826222826 -

Unibic Bangalore Biscuits 91-08025201359 -

KCL Haryana Cereals 91-01294018882 -

Savorit Limited Dindigul Pasta 91-04512411052 -

Sarjena Foods Pvt Ltd Mumbai Cookies 91-095949 97460 [email protected]

Asian Lacto Industries Ludhiana Juices 91-09915715230 [email protected]

Gopaljee Dairy Noida Dairy 91-01204768000 [email protected]



Indian Private Label supplier details: Home & Personal Care…(1/2)


Daffy Cosmetics Pvt. Ltd. Bangalore Detergents 918041172929 [email protected]

Fantacy Creations Kolkata Brushes / Mops 913324256849 [email protected]

Fresno and Bakersfield India Ltd Mumbai Detergents 912228394591 [email protected]

Jilmil Enterprises Mumbai Cutlery 919967876666 [email protected]

M. K. International Jamnager Detergents 912882672056 [email protected]

MAK Trading Company Mumbai Detergents 91983315170 [email protected]

m

Netway Home Products I Pvt. Ltd. Palghar Detergents 910320238811 [email protected]

Nilgiri Herbals & Agro Ind Pvt. Ltd. Mumbai Detergents 912224442094 [email protected]

Orient Enterprises Goregaon Storage Jars 919820626203 [email protected]

Vanessa Cosmetics Kala Amb Detergents 919810162102 [email protected]

Advance Home and Personal Care New Delhi Detergent 91-01125060801/5 -

Indo Herbal Products Ltd New Delhi Sanitizers 91-01334230251/2636 -

Kaps Hygein Solution Pvt ltd Mumbai Toilet Cleaner 91-

02241225200/204459 -

Namratha Oil Refineries Bangalore Toiletries 91-8023593400/01/02 [email protected]

Sankhubaba International Mumbai Hair and Skin Care 912224710058/15565 [email protected]

Sterling Tissue Tissues and Wipes 9820090852 [email protected]



Indian Private Label supplier details: Home & Personal Care …(2/2)


Aayam Herbal & Research Industries Cosmetics/Toiletries 911412219129 [email protected]

Bdel Wellness Pvt Ltd Mumbai Sanitizers, Cleansers &

Deodorizers 2242662756 [email protected]

Bio Fresh Herbals Noida Cosmetics/Toiletries 1204216820 [email protected]

Dev Care Surat Cosmetics/Toiletries 912616454567 [email protected]

Forever Bodycare Industries New Delhi Health & Beauty Soaps 911147136162 [email protected]

Insto Cosmetics Private Limited Nashik Cosmetics/Toiletries 912532353122 [email protected]

Krauter Healthcare Noida Cosmetics/Toiletries 919818896611 [email protected]

Mikasa Cosmetics Ltd. Chennai Cosmetics/Toiletries 914422500310 [email protected]

Nobel Hygiene Mumbai Tissues and Wipes 912228201381 [email protected]

om

Origami Cellulo Pvt Ltd. Bangalore Tissues and Wipes 9143462000 [email protected]

Pramukh Paper Products Pvt. Ltd. Mumbai Tissues and Wipes 912240300200 customercare@pramukhpaper.

com

Premier Tissues India Ltd. Bangalore Tissues and Wipes 918043331511 [email protected]

Proveda Herbals New Delhi Cosmetics/Toiletries 919818403953 [email protected]

Radiohms Agencies Ltd. New Delhi Personal Care Products 911140500800/831 [email protected]

Suhan Aerosol & Associates Mumbai Cleaning & Hygiene

Soaps 912225786670 [email protected]

Tainwala Personal Care Pvt. Ltd. Mumbai Tissues and Wipes 912267166100 [email protected]



Indian Private Label supplier details: Apparels & Fashion Accessories


Anika Apparels Mumbai Women’s Dress

91-

02245540100/40383258 -

Creative Casual Mumbai Womens’ Top 91-02224984297 -

Salasar Clothing Mumbai Jeans

91-9867069966 -

Prateek Apparels - Formal Apparels - -

Vortex Apparels - Formal Apparels - -

Karteek Apparels - Sports Casual - -

Enya Jewels Mumbai Fashion Accessories 919820434704 [email protected]

Med Vision Mumbai Shoes and Bags 919821011268 [email protected]

Ra Moda Exports Pvt. Ltd. Mumbai Fashion Accessories 912265343766 [email protected]

Krishna Exports - Women’s Ethnic - -

Noya Lifestyle Ltd - Sandals - -

Remo Apparels Tirupur Casual Shirts 91-9942337755 -

Space Fashion Ludhiana

Polo and Sports

Shirts 91-01612672390 -

RJ Clothing Pvt Ltd Pune Ethnic - -

Saket Exports - Women's Ethnic - -

OJ Design - Women's Ethnic - -

Ms Solace - Jeans - -

Dristi Apparels Gurgaon Jeans 91-01242347139/2347146 [email protected]



Indian Private Label supplier details: Home Improvement


Dhana Furniture Home Chennai Furniture 9953361458 -

Decorative Mumbai Furniture (91)-(22)-25150926 -

Carve Arts Coimbatore Furniture 91-422-2333063 -

Athena Creations Kolkata Furniture (91)-(33)-22353099 -

Royal Home Décor Gurgaon Décor & Furnishings (91)-(124)-4214758 -

Home Décor Karur Décor & Furnishings (91)-(4324)-241404 -

Royal De Wajidsons Moradabad Décor & Furnishings (91)-(591)-2314925 -

Mehar Tex Madurai Décor & Furnishings (91)-(452)-2584786 -

Ginesys Limited Gurgaon Décor & Furnishings (91)-(124)-2219071 -

Skipper Furnishings Kolkata Décor & Furnishings (91)-(33)-40065353 -

Antique Art Gift, New Delhi Décor & Furnishings (91)-(11)-47501035 -

JPS Trade Links, Coimbatore Fittings & Faucets (91)-(422)-4383727 -

Bharmal Plastic Industries Mumbai Fittings & Faucets (91)-(22)-23464392 -

Maruti Bath Collection Jaipur Fittings & Faucets (91)-(141)-2290622 -


End of Document

Phone: + 91 22 6637 6789

Fax: + 91 22 6637 6600

e-mail: [email protected]

About Tata Strategic Contact Details

TATA STRATEGIC MANAGEMENT GROUP

B-1001, Marathon Futurex,

N M Joshi Marg, Lower Parel East,

Mumbai 400013

India

URL: www.tsmg.com

Tata Strategic Management Group is the largest Indian-

owned management consulting firm. With over twenty years

of management consulting experience, we operate in

SAARC and West Asian countries. As an India based

consulting firm, we help clients gain a perspective on India

entry strategy, rural markets and other India insights.

We have helped clients across multiple industry sectors

create competitive advantage and sustain superior

performance. We weave together innovative advice,

workable solutions and provide implementation support to

enable our clients reach the pinnacle and stay there.

http://www.tsmg.com/

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