Market Research Report : Retail Market in India 2012


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Retail market in India was valued at INR 16.94 tr in 2010 and is expected to grow at a CAGR of 11%. It accounts for 22% of the country's GDP and is the second largest employer with 35.06 mn people. Traditional retail formats are fast getting replaced by modern organised retail formats. Due to growing retail space and changing consumer behaviour, retail market in India is poised for strong growth in the near future.

The report begins with the market overview section that gives an insight into the retail market in India, its market size and growth, along with the share of major retail segments. Low organised retail penetration indicates huge growth potential of this market. This is followed by the major segments in the retail market, where food and grocery occupies the largest share. The various market entry strategies available for foreign retailers, franchising, cash and carry wholesale trading, strategic license agreements, joint ventures, manufacturing, distribution, have also been highlighted. A comparison of the traditional retail supply chain with the modern retail supply chain has also been given. The section also includes an overview of the various organised retail formats, hypermarkets, cash-and-carry, department stores, supermarkets, shop-in-shop, specialty stores, category killers, discount stores and convenience stores. Additionally, an analysis of Porter’s Five Forces provides an insight into the competitive intensity and attractiveness of the market.

An analysis of the drivers and challenges explains the factors leading to the growth of the market including low organised retail penetration, rising income levels and consumerism, growing retail space and mall boom, increasing availability of credit and changing demographics and consumer behaviour. Strong opportunity exists in the market due to low organised retail penetration in India. This coupled with the fact that income level and consumerism are rising, will drive the retail market. The key challenges identified are insufficiencies in supply chain, shortage of skilled manpower and real estate issues.

Key trends in the market have also been analysed which includes emergence of innovative retail formats, online and rural retailing and integration of various business strategies. This is followed by a section on the FDI scenario of the retail market in India which includes evolution of retail FDI policy, current FDI scenario in retail, single brand retailing and multi brand retailing in India. A section on the investment scenario of this market is also highlighted, including investment and expansion plans, mergers and acquisitions, and partnership agreements in the retail sector.

The competition section provides an overview of the competitive landscape in the market and includes a detailed profile of the major players. It begins with a matrix showing the various retail formats under which the playe

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Market Research Report : Retail Market in India 2012

  1. 1. Retail Market – India Retail Market IndiaJanuary 2012
  2. 2. Executive Summary  Retail market in India was valued at INR a tr in 20‐‐ and is expected to grow to INR b tr in 20‐‐  It accounts for c% of the countrys GDP and is the second largest employer with d mn people Market  Traditional retail formats are fast getting replaced by modern organised retail formats  Low organised retail penetration in India translates into huge growth potential for this market g p g g p Drivers Challenges – Low organised retail penetration – Insufficiencies in supply chain Drivers &  – Rising income levels and consumerism – Shortage of skilled manpower Challenges – Growing retail space and mall boom Growing retail space and mall boom – Real estate issues Real estate issues – Increasing availability of credit – Changing demographics and consumer behaviour  Emergence of innovative retail formats  Trends  Online and rural retailing Online and rural retailing  Integration of various business strategies  Evolution of Retail FDI Policy  Current FDI Scenario in RetailFDI Scenario  Single Brand Retailing in India Single Brand Retailing in India  Multi Brand Retailing in India Major PlayersCo pet t oCompetition Player 1 Player 2 Player 3 Player 4 Player 5 Player 6 RETAIL MARKET IN INDIA 2012.PPT 2
  3. 3. •Market Overview•Market Overview•Drivers & Challenges•Trends•FDI Scenario•Investment Scenario p•Competition•Strategic Recommendations RETAIL MARKET IN INDIA 2012.PPT 3
  4. 4. Retail market in India is poised for strong growth in the  coming years owing to favourable government support Retail Market – Overview Market Size and Growth • Indian retail market has experienced high growth  over the last decade with a gradual shift towards  INR tr modern retailing formats modern retailing formats z% % y • It accounts for k% of the countrys GDP and is the  second largest employer with l mn people,  x contributing j% of the total employment • Due to the government now allowing more FDI  g g relaxations, the retail sector in India is poised for  strong growth in the near future 0 2010 2014e Share of Major Retail Segments (20‐‐) Category 1 h% Segment 1 Category 2 Category 3 e% f% g% v% d% i% Category 4 Category 4 Low organised retail  Category 5 c% penetration indicates  Category 6 huge growth potential  a% Category 6 b% for this market Category 7 u% Category 8 Segment 2Source: RETAIL MARKET IN INDIA 2012.PPT 4
  5. 5. Drivers & Challenges – Summary  Drivers Challenges Low organised retail penetration Insufficiencies in supply chain Rising income levels and consumerism Shortage of skilled manpower Growing retail space and mall boom Real estate issues Increasing availability of credit Changing demographics and consumer  behaviour RETAIL MARKET IN INDIA 2012.PPT 5
  6. 6. Trends – Summary Online Retailing Rural Retailing Key  Trends Integration of various business  Emergence of innovative retail  strategies formats RETAIL MARKET IN INDIA 2012.PPT 6
  7. 7. Public: Domestic Company – Player (1/3) Company Information Offices and Centres – India  Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Head Office Products and Services Products and Services Category Products/Services Key People Category 1 Product 1, Product 2, Product 3 Name N Designation D i ti Category 2 Product 1, Product 2, Product 3 A Category 3 Product 1, Product 2, Product 3 B C DSource: RETAIL MARKET IN INDIA 2012.PPT 7
  8. 8. Public: Domestic Company – Player (2/3) Financial Snapshot i i lS h Key Ratios K i Total Income Net Profit/Loss y‐o‐y change  Particulars  2011 2010 2009 2008 (2011‐10) INR mn INR mn Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed 0 Return on Working Capital 2008 2009 2010 2011 Return on Assets Financial Summary  Return on Fixed Assets Cost Ratios • The company incurred a net profit of INR a mn in FY 20‐‐, as  Operating costs (% of Sales) compared to net profit of INR b mn in FY 20‐‐ Administration costs (% of  • The company reported total income of INR c mn in FY 20‐‐,  Sales) registering an increase of d% over FY 20‐‐ registering an increase of d% over FY 20 Interest costs (% of Sales) Interest costs (% of Sales) Liquidity Ratios • The company earned an operating margin of e% in FY 20‐‐, a  Current Ratio decrease of f percentage points over FY 20‐‐ Cash Ratio • The company reported debt to equity ratio of g in FY 20‐‐, an  Leverage Ratios increase of h% over FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio b i l i Key Financial Performance Indicators Interest Coverage Ratio Indicators Value (05/01/2012) Efficiency Ratios Market Capitalization (INR mn) Fixed Asset Turnover Total Enterprise Value (INR mn) Asset Turnover Current Asset Turnover EPS (INR) EPS (INR) Working Capital Turnover PE Ratio (Absolute) Capital Employed TurnoverSource: Improved Decline RETAIL MARKET IN INDIA 2012.PPT 8
  9. 9. Public: Domestic Company – Player (3/3) Key Business Segments Key Geographic Segments Segment 1 Segment 3 Segment 1 Segment 3 Segment 5 Segment 2 Segment 4 Segment 2 Segment 4 Segment 6 0% 0% 2008 2009 2010 2011 2008 2009 2010 2011 Key Recent Developments Description  News • Player is India’s market leader in the social expression industry with over a% market share in the  organized sector and presently has b owned outlets along with c franchised outlets Overview • It exports its products to Country 1, Country 2, Country 3, Country 4, Country 5, Country 6, Country 7,  Country 8, Country 9 Country 8 Country 9 • Player has entered into a license agreement in Jan 20‐‐ with company the global market leader in O, to  open up exclusive retail outlets across India Collaborations • It also has exclusive tie‐ups with many other global majors such as Company 1 of USA, Company 2,  Company 3, Company 4 and Company 5 of UK Expansion Plans • It plans to open up f stores within 20‐‐ and around h in three to five years in City 1 and City 2Source: RETAIL MARKET IN INDIA 2012.PPT 9
  10. 10. Private: Domestic Company – Player (1/3) Company Information Offices and Centres – India  Corporate Address Tel No. Fax No. Website Year of Incorporation Head Office Products and Services Products and Services Brands Products/Services Category 1 Product 1, Product 2, Product 3 Key People Category 2 g y Product 1, Product 2, Product 3 , , Name N Designation D i ti A B C DSource: RETAIL MARKET IN INDIA 2012.PPT 10
  11. 11. Private: Domestic Company – Player (2/3) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Total Income Net Profit/Loss Particulars  2011 2010 2009 2008 (2011‐10) INR mn Profitability Ratios INR mn Operating Margin 0 Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets 0 Cost Ratios 2008 2009 2010 2011 Operating costs (% of Sales) Administration costs (% of  Sales) Financial Summary  Interest costs (% of Sales) Interest costs (% of Sales) • The company incurred a net loss of INR a mn in FY 20‐‐, as  Liquidity Ratios Current Ratio compared to net loss of INR b mn in FY 20‐‐ Cash Ratio • The company reported total income of INR c mn in FY 20‐‐,  Leverage Ratios registering an increase of d% over FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio b i l i • The company earned an operating margin of e% 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‐‐, an  Fixed Asset Turnover increase of h% over FY 20‐‐ Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed TurnoverSource: Improved Decline RETAIL MARKET IN INDIA 2012.PPT 11
  12. 12. Private: Domestic Company – Player (3/3) Key Recent Developments Description  News • Player is the retail arm of ABC operating through two formats supermarket and hypermarket under the Player is the retail arm of ABC, operating through two formats, supermarket and hypermarket, under the  Overview brand names, x and y • It plans to open d supermarkets and e hypermarkets by 20‐‐ with an investment of INR f bn  Expansion Plans • It is focusing on expansion of retail store network in semi‐urban and rural areas on the back of its  experience in smaller towns ll • At present, Player has over g supermarkets across the country Retail Network • The company also operates M hypermarkets under the brand h in City 1, City 2, City 3, City 4, City 5 City 6  and City 7  Awards and Recognitions • Player was conferred two awards for Private Labels by T in the categories of ‘N’ and ‘U’Source: RETAIL MARKET IN INDIA 2012.PPT 12
  13. 13. Thank you for the attentionThe Retail Market ‐ India report is part of Research on India’s Consumer Goods Industry Series. For more detailed information or customized research requirements please contact:Gaurav KumarPhone: +91 33 4064 6214E‐Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick Research on India is a product of Netscribes (India) Pvt Ltd Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment &  g g f g p y p p fbusiness 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 the preparation, Research on India, Disclaimer: This report is published for general information only Although high standards have been used the preparation Research on IndiaNetscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. RETAIL MARKET IN INDIA 2012.PPT 13