INDIAN RETAIL LANDSCAPEINDIAN RETAIL LANDSCAPE

FORMATS OF INDIAN RETAILFORMATS OF INDIAN RETAIL

TYPES OF RETAILTYPES OF RETAIL

One of the world’s largest industry exceeding US $ 9 trillion

47 Global Fortune 500 companies & 25 Asia's Top 200 companies are retailers

Dominated by developed countries.

US, EU & Japan constitutes 80% of world retail sales

Biggest player in India, Pantaloon’s total group sales is about equal to 2 Wal-Mart super centers annual revenues

38%

27%

13%

8%3% 2% 9%

USA EU Japan China

India Russia Others

Highly evolved US market has Wal-Mart taking only 8% market share

UK market has Tesco with only 13.4% market share China market still does not have a clear leader

USA = US$ 2,350 Bn UK = US$ 406 Bn China = US$ 313 Bn

Total retail contribution in World GDP is 27% Organized retail in US accounts for 22% of

GDP Share of organized retail in developing

markets ranges between 20% to 55% Retail markets are organizing faster In developed markets, dominant player (Wal-

Mart in US, Tesco in UK) has a significantly higher share; enjoying up to 8-13% market share

Departmental stores growth is declining while ‘All-under-one-roof’ & ‘neighborhood’ convenience is gaining strength

Indian Retail - dominated by unorganized sector

Approximately 2 million Mom and Pop Shops Share of organized retail sector is only 4.6% FDI in the retail sector not permitted to protect

local retailers (excepting for single brand & cash and carry formats. In this FDI is 51%.)

Indian retail sector is one of the least concentrated in the world.

The top five companies hold a combined market share of less than 2%

India is third largest market in Asia and Oceania, behind Japan and China.

Indian retail is dominated by food & grocery which contributes > 65% of Rs 9.3t retail market, almost 99% of this is dominated by kirana stores.

In Rs 00 crores

In India, clothing retail accounts for 36% of organised retail business. According to a report global apparel, accessories & luxuries market is likely to grow by 4.5% annually and Asia Pacific region is anticipated to acquire leadership position by 2011. Apparel sector in India poses a lot of challenges to a marketer. So far India’s share in world apparel trade has been insignificant (less than 3%). World garment trade is estimated at around 195 Billion US$ annually. The Biggest manufacturer & supplier is China producing over 50 billion $, followed by Mexico which produces over 8 billion and followed by many countries like India, Sri Lanka and Bangladesh, being the third place countries making and exporting garments worth 5 - 6 billion $ annually.

Store nameStore name PantaloonPantaloon Mega-Mega-martmart

LifestyleLifestyle WestsideWestside Wills Wills LifestyleLifestyle

MaxMax

PositioningPositioning Family Family storestore

Value for Value for moneymoney

Value pricingValue pricing Style & Style & affordabilityaffordability

Enjoying Enjoying the change the change

Family Family Shopping Shopping DestinationDestination

Format Format TypeType

MultibrandMultibrand Ex. Ex. Arvind Arvind MillsMills

MultibrandMultibrand Ex. Tata Ex. Tata trent gr.trent gr.

Ex. ITCEx. ITC MultibrandMultibrand

Floor sizeFloor size 28000sq.ft.28000sq.ft. 5000sq. 5000sq. Ft.Ft.

50000sq. Ft.50000sq. Ft. 15000-15000-30000sq. 30000sq. Ft.Ft.

LocationLocation C.G.road,C.G.road,

AhmedabaAhmedabadd

Drive Drive road road AhmedabAhmedabadad

Satellite Satellite road,Ahmedabroad,Ahmedabadad

C.G.roadC.G.road

AhmedabadAhmedabadC.G.road,C.G.road,

AhmedabadAhmedabadGallops Gallops mall, mall, AhmedabadAhmedabad

CategoriesCategories Apparel, Apparel, accessorieaccessoriess

Apparel, Apparel, furnishinfurnishingg

Apparel, Apparel, accessoriesaccessories

Styled Styled clothingclothing

Relaxed Relaxed wear, body wear, body care care productproduct

Footwear, Footwear, accessoriesaccessories

Future group- big bazaar, food bazaar, pantaloons etc.

Reliance retail- marks & spencer RPG group- spencer Bharti-walmart Tata tesco- star bazaar

Parsvnath retail Subhiksha retail Vishal mega mart retail Shoppers’ stop

The share of organized retail in total retail pie is set to increase from about 3% to 8 – 10 % by 2010.

Hyper market- more than 75000 square feet

Super market- less than 75000 square feet

Neighborhood store- 3500 to 5000 square feet

Kirana store

Malls:The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd, and Pantaloon. Specialty Stores:

Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non-perishable goods.

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1. Food Category: Supermarkets,discount stores, fresh product outlets, speciality stores, convenience stores and off-price retailers.

2. Restaurants: Apna Ghar, old formats coexist (Ghanteewala Halwai, Natraj Café, Giani ka falooda)

3. Health and Beauty Products: LIFESPRING HEALTH & BEAUTY PLACE (Health Foods at Beauty Products, Eye Care at Life Spring )

4. Clothing and Footwear Retailers: Kala Niketan, THE LOFT, Shoppers’ Stop, Pantaloon, Trent, Home Furniture and Household Goods Retailers

5. Durable Goods Retailers :Vivek’s6. Petro-Retailing in India: Bharat Petroleum 7. Retail Banking: Multi-Channel Distribution,Call

Centres (support services), Technology, Rural exposure

8. Leisure industry

In fact, the Indian rupee has a very high purchase power parity compared to its international exchange value

The domestic purchasing power of a US dollar in the US is closer to the purchasing power of six rupees in India, for equivalent goods and services

As a result, India ranks fourth richest nation in the world, on purchase power parity terms, despite being having low per capita national income

Existing players expanding to smaller towns› Number of existing players like Big Bazaar,

Shopper’s Stop, Piramyd are planning expansion in smaller cities

Indian business houses in retail› Many business houses are planning retail entry /

expansion either on their own or through partnerships

Global Players planning entry in India› Some of world’s largest retailers - evaluating entry in

India including Wal-Mart, Carrefour,Tesco, IKEA, Best Buy, Lowe's, Kingfisher Group, Auchan, Woolworth, NTUC etc.

› Shop Rite, Metro, Marks & Spencers, & Spar are already here

› Some have setup Sourcing / Back-office centers e.g. Tesco, Wal-Mart, etc.

Rural opportunity - becoming interesting for organized retailers

943990

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2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

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Total Retailing Market ( Rs '000 Cr) Organized Retailing (Rs '000 Cr)

Indian retail industry ~ Rs 990,037 Cr (USD 300 bn), growing at 5-6% p.a.Indian retail industry ~ Rs 990,037 Cr (USD 300 bn), growing at 5-6% p.a. Organised retail industry ~ Rs 35,000 Cr (USD 7.7 bn), growing at 25-30% Organised retail industry ~ Rs 35,000 Cr (USD 7.7 bn), growing at 25-30%

p.a.p.a.

Lack of right formats catering to needs especially “All Under One Roof” formats

Absence of single trusted player with pan-India presence

No investment in supply-chain infrastructure. Sole focus on front-end with minimal back-

end linkages (DC, logistics, cold chain, vendor & farmer development, etc.)

Inconsistent availability, quality & pricing Transactional approach, minimal focus on

customer service over the life-cycle

THANK YOU

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