Market Research Report : Convenience Store Market in India 2012

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The market will be boosted by the rising income levels coupled with changing lifestyle, resulting in increased demand for convenience shopping.
The report begins with an introduction section, comprising of the description of convenience stores along with the significant focus areas for the development of the domestic convenience store market. The next section provides the global outlook of the convenience store market, mentioning the growth of convenience stores in Japan and the United States. The market overview section begins with the retail industry overview in India, including the market size and growth of the retail sector with distinct share of organized and traditional retail. It also provides a brief idea about the retail supply chain and mentions the ways in which modern retail supply chain is leading to cost reduction. This section also includes the various organized retail formats, providing a brief description and few examples of each format. This is followed by the Convenience store market in India, providing details on the domestic organized convenience store market size in terms of market value and its growth. It also mentions the necessary factors for the success of the convenience stores. Another detailed illustration about the changing shopping trend has been included. Further, the report provides a description of the major segments which attracts consumer spending and their share in the overall retail sector. Food and groceries has always been the most frequently purchased and largest selling segment in the Indian retail sector.





The Convenience Store Market in India is part of Netscribes’ Consumer Goods Industry Series reports. The market will be boosted by the rising income levels coupled with changing lifestyle, resulting in increased demand for convenience shopping.

The report begins with an introduction section, comprising of the description of convenience stores along with the significant focus areas for the development of the domestic convenience store market. The next section provides the global outlook of the convenience store market, mentioning the growth of convenience stores in Japan and the United States. The market overview section begins with the retail industry overview in India, including the market size and growth of the retail sector with distinct share of organized and traditional retail. It also provides a brief idea about the retail supply chain and mentions the ways in which modern retail supply chain is leading to cost reduction. This section also includes the various organized retail formats, providing a brief description and few examples of each format. This is followed by the Convenience store market in India, providing details on the domestic organized convenience store market size in terms of market value and its growth. It also mentions the necessary factors for the success of the convenience stores. Another

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Market Research Report : Convenience Store Market in India 2012

  1. 1. Insert Cover Image using Slide Master View Do not distortConvenience Store Market – IndiaJune 2012
  2. 2. Executive Summary  Global convenience store market has been growing rapidly along with the rising income and improving lifestyle Market across the globe  Retail Industry is experiencing aggressive growth and expansion, accounting for ~x% of the country’s GDP    Convenience stores are still an emerging concept in India, accounting for only ~y% of the countrys total  LE organized retail sector P  Changing Shopping Trend in IndiaShopping Trends  Consumer Spending – Major Segments Drivers: S AM  Consumer Demands in Today’s Shopping Trend ‐ Rising Income Levels and Consumerism Challenges: ‐ Large Geographic Spread and Lack of Logistics  ‐ Ease of Payment via Cards SupportDrivers & Challenges ‐ Changing Demographics and Lifestyle ‐ Regulatory Challenges ‐ Growing Acceptance towards FDI in Retail ‐ Human Resource Constraints ‐ Customer Migration Major PlayersCompetition Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 CONVENIENCE STORE MARKET IN INDIA 2012.PPT 2
  3. 3. •Introduction•Global Outlook•Market Overview LE   MP • Indian Retail Industry S A • Convenience Store Market•Shopping Trends•Drivers & Challenges•Real Estate Challenges•Competition•Strategic Recommendations CONVENIENCE STORE MARKET IN INDIA 2012.PPT 3
  4. 4. …of the major players and rising no. of convenience stores in  SAMPLE various countries across the globeConvenience Store – Global Outlook (2/2) Growth of Convenience Stores in Japan* no. x% 60,000 a3 a1 a2 40,000 20,000 0 20‐‐ 20‐‐ 20‐‐e Growth of Convenience Stores in US y% no. b1 b2 b3 150,000 100,000 50,000 0 20‐‐ 20‐‐ 20‐‐ CONVENIENCE STORE MARKET IN INDIA 2012.PPT 4
  5. 5. Retail market in India is poised for strong growth in the coming years owing to favorable government supportRetail Market – Overview Market Size and Growth• Indian retail market has experienced high growth over  Organized retail Traditional retail the last decade with a gradual shift towards modern  retailing formats 60 x% a2  Retail market value is expected to be worth INR a2 tr in 20‐‐,  growing at a CAGR of x% during 20‐‐ ‐20‐‐ E    It accounts for y% of the countrys GDP and is the second  L largest employer with z mn people, contributing w% of the  40 20 a1 x1 y1 y2 P x2 total employment 0 M• Due to the government now allowing more FDI  20‐‐ 20‐‐e A relaxations, the retail sector in India is poised for strong  Retail Supply Chain S growth in the near future• Low organized retail penetration at r% indicates huge  growth potential for this market Company/ Manufacturer  More than f mn shoppers are expected to shop at organized  retail chains by 20‐‐• Traditional retail sector comprises ~g mn mom‐and‐pop  stores/ Kiranas which may gradually turn into  a b c convenience stores and mini supermarkets  Modern retail supply chain eliminates intermediaries, such as  a, b and c, resulting in increased profitability for the producers  and cost reduction for the consumers d Consumers CONVENIENCE STORE MARKET IN INDIA 2012.PPT 5
  6. 6. Traditional retail formats such as kirana stores are fast getting replaced...Retail Market – Organised Formats (1/2) SAMPLE  Retail Formats Description Companies Company 1, Company 2,  Supermarkets • Description 1 Company 3, Company 4 Company 1, Company 2,  Department Stores • Description 2 Company 3, Company 4 Company 1, Company 2, Cash and Carry Stores  • Description 3 Company 3 Company 1, Company 2,  Hypermarkets • Description 4 Company 3 CONVENIENCE STORE MARKET IN INDIA 2012.PPT 6
  7. 7. Convenience store market in India to witness strong growth owing to the rising demand for convenience shoppingConvenience Stores Market – Overview Organized Convenience Store Market• Convenient stores in India is still at a nascent stage,  INR bn providing huge untapped market potential for future  250 a5 x% growth 200 a4 a3    Currently, convenient stores market in India is approximately  150 a2 E equal to INR a1 bn and is expected to  grow at a CAGR of x%  a1 100 to reach INR a5 bn in 20‐‐ P L• Convenient store market represents y% share of the  50 0 M total organized retail market in India 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e consumer S A• Convenient stores cater to the basic needs of an Indian • They are located in both residential as well as  commercial markets and often operated in conjunction  Convenience Store Success Factors Factor 1 Factor 5 with a service station• Convenience stores have become the preferred  Factor 2 Factor 6 Success Factors shopping destinations for the Indian urban consumers,  Factor 3 Factor 7 demanding for convenience, quality and service• Convenience stores in India are z% as efficient as stores  Factor 4 Factor 8 in the US in terms of display, accessibility of products  and service CONVENIENCE STORE MARKET IN INDIA 2012.PPT 7
  8. 8. Consumer Spending – Major Segments Indian consumer spends on various items, broadly classified under the following segments: Furniture and Furnishings Food and Grocery Consumer Durables • Pointers • Pointers • Pointers India Spends on Apparel Electronics Beauty, Wellness and Pharmacy • Pointers • Pointers • Pointers SAMPLE  CONVENIENCE STORE MARKET IN INDIA 2012.PPT 8
  9. 9. Needs, desires and wants of the Indian consumers contributing to the country’s growing retail sector Consumer Demands in Today’s Shopping Trend x2% x3% x4% Segment 1 Segment 4 Segment 7 x5% Segment 2 Segment 5 Segment 8 x1% x9% x7% x6% Segment 3 Segment 6 Segment 9 x8% LE   MP A• Findings S CONVENIENCE STORE MARKET IN INDIA 2012.PPT 9
  10. 10. Drivers & Challenges – Summary LE   MP S A Challenges Large Geographic Spread and Lack of  Logistics Support Drivers Regulatory Challenges Rising Income Levels and  Consumerism Human Resource Constraints Ease of Payment via Cards Customer Migration Changing Demographics and Lifestyle Growing Acceptance towards FDI in  Retail CONVENIENCE STORE MARKET IN INDIA 2012.PPT 10
  11. 11. Rising income and consumption levels will boost the growth of the convenience stores in IndiaRising Income Levels and Consumerism Impact• Finding 1  Sub‐finding 1 LE   P• Finding 2  Sub‐finding 2 • Finding 3 SAM Aggregate Consumption (INR tr) Aggregate Disposable Income (INR tr) x1 x2 x3 Household Income Brackets y1 y2 y3100% 7% (INR ‘000)  100% 9% 6% 12% 20% 14% 8% 7% 24%80% 12% 80% 13% 9% Segment 1 35% 24% 23%60% Segment 2 60% 35% 50% 49%40% 35% Segment 3 40% 34% 36% Segment 4 33%20% 20% 24% 17% Segment 5 23% 15% 3% 0% 10% 3% 9% 0% 20‐‐ 20‐‐e 20‐‐e 20‐‐ 20‐‐e 20‐‐e CONVENIENCE STORE MARKET IN INDIA 2012.PPT 11
  12. 12. Major Private Companies ‐ Summary Net Profit Size of the Bubble represents Total Assets    0 m3 in USD mn ‐500 P LE ‐1,000 SAM m2 ‐1,500 ‐2,000 ‐2,500 m1 ‐3,000 Revenue 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 Company 1 Company 2 Company 3Source: CONVENIENCE STORE MARKET IN INDIA 2012.PPT 12
  13. 13. Private: Domestic – Company 1 (1/3)Company Information Offices and Centres – India  xxx 1, z  Road, k , Phase‐ g, New Delhi, Corporate Address 1100ff India New DelhiTel No. xxxx‐ yyyyFax No. ‐Website www.xxx.inYear of Incorporation 20‐‐ Head OfficeProducts and Servicesw stores – Products Product 1, Product 2 and Product 3; Product 4, Product 4,  Key PeopleProduct 5 Name Designation Person 1 Director SAMPLE  Person 2 Director Person 3 Manager Person 4 Secretary CONVENIENCE STORE MARKET IN INDIA 2012.PPT 13
  14. 14. Private: Domestic – Company 2(2/3)Financial Snapshot LE   Key Ratios INR mn MP Total Income Net Profit/Loss INR mn Particulars  Profitability Ratios y‐o‐y change  (2010‐09) 2010 2009 2008 2007 A a1 a4 Operating Margin ‐ ‐ ‐ ‐ ‐5000 0 S Net Margin ‐ ‐ ‐ ‐ ‐4000 Profit Before Tax Margin ‐ ‐ ‐ ‐ ‐ a2 ‐1,000 Return on Equity ‐ ‐ ‐ ‐ ‐3000 a3 b4 Return on Capital Employed ‐ ‐ ‐ ‐ ‐2000 Return on Working Capital ‐ ‐ ‐ ‐ ‐ ‐2,0001000 Return on Assets ‐ ‐ ‐ ‐ ‐ b3 Return on Fixed Assets ‐ ‐ ‐ ‐ ‐ 0 b2 ‐3,000 Cost Ratios 20‐‐ 20‐‐ 20‐‐ 20‐‐ Operating costs (% of Sales) ‐ ‐ ‐ ‐ ‐ Administration costs (% of  ‐ ‐ ‐ ‐ ‐ Sales)Financial Summary  Interest costs (% of Sales) ‐ ‐ ‐ ‐ ‐• The company incurred a net loss of INR a4 mn in FY 20‐‐, as  Liquidity Ratios Current Ratio ‐ ‐ ‐ ‐ ‐ compared to net loss of INR a3 mn in FY 20‐‐ Cash Ratio ‐ ‐ ‐ ‐ ‐• The company reported total income of INR b4 mn in FY 20‐‐,  Leverage Ratios registering an increase of x% over FY 20‐‐ Debt to Equity Ratio ‐ ‐ ‐ ‐ ‐ Debt to Capital Ratio ‐ ‐ ‐ ‐ ‐• The company earned an operating margin of d% in FY 20‐‐, an  Interest Coverage Ratio ‐ ‐ ‐ ‐ ‐ increase of f percentage points over FY 20‐‐ Efficiency Ratios• The company reported debt to equity ratio of g in FY 20‐‐, a  Fixed Asset Turnover ‐ ‐ ‐ ‐ ‐ Asset Turnover ‐ ‐ ‐ ‐ ‐ decrease of c% over FY 20‐‐ Current Asset Turnover ‐ ‐ ‐ ‐ ‐ Working Capital Turnover ‐ ‐ ‐ ‐ ‐ Capital Employed Turnover ‐ ‐ ‐ ‐ ‐ Improved Decline CONVENIENCE STORE MARKET IN INDIA 2012.PPT 14
  15. 15. Private: Domestic – Company 1 (3/3)Business Highlights SAMPLE Description  News • Company 1 is one of the recently established retailers with chain of retail stores under the brand name  ‘brand 1’ across India  It operates convenience stores called brand 1, compact hypermarket stores called brand 1 Market and hyper market  called brand 1 Hyper • Brand 1stores are one‐stop  shopping destination that supplies the daily necessities at a discounted priceOverview  They provide wide range of high quality products along with great in‐store experience and service • brand 1 market offers ~x products across y categories, including segment 1, segment 2, segment 3,  segment 4, segment 5 and segment 6 • brand 1 hyper is spread across z sq ft, offering  x new items across categories such as food and groceries  and consumer electronics • Comapny has plans of investing INR x1‐x2 bn for securing  g mn sq ft of total retail space in country 1 and  employing ~d people by 20‐‐ • On rst Mar 20‐‐, company had launched an brand 1 store in city 1 located at u Market in state 1Expansion Plans  It offers low price shopping experience covering an area of more than h sq ft and stocks more than j quality products,  including a special segment 5 section • Brand 1 market stores will house Company 2 with first segment 8 being established in city 2 in state 2,  state 3 and state 4 • Currently there are t1 brand 1 stores across state 1, state 2, state 3, state 4, state 5, state 6, state 7, Network state 8, state 9, state 10 and state 11 • There are more than t2 customers visiting the brand 1stores daily CONVENIENCE STORE MARKET IN INDIA 2012.PPT 15
  16. 16. Strategic Recommendations LE   MP • Strategy 1 S A • Strategy 2 Strategic  • Strategy 3Recommendations • Strategy 4 • Strategy 5 CONVENIENCE STORE MARKET IN INDIA 2012.PPT 16
  17. 17. Thank you for the attentionConvenience Store Market – India report is part of Netscribes’ Consumer Goods Industry Series. For more detailed information or customized research requirements please contact:Phone: +91 33 4064 6214E‐Mail: sales@netscribes.comFollow us on:About NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. CONVENIENCE STORE MARKET IN INDIA 2012.PPT 17

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