PRESENTATION ON RETAIL INDUSTRY Presented by: Piyush Trigunayat Ashish Trivedi Mukesh Singh Ajay
INDIAN RETAIL LANDSCAPE FORMATS OF INDIAN RETAIL TYPES OF RETAIL
International Retail: At a Glance
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
Share of Organized Retail
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
Retail Landscape in India
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.
Retail consumption by categories 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.
Key players in Apparel Retail Store name Pantaloon Mega-mart Lifestyle Westside Wills Lifestyle Max Positioning Family store Value for money Value pricing Style & affordability Enjoying the change Family Shopping Destination Format Type Multibrand Ex. Arvind Mills Multibrand Ex. Tata trent gr. Ex. ITC Multibrand Floor size 28000sq.ft. 5000sq. Ft. 50000sq. Ft. 15000-30000sq. Ft. Location C.G.road, Ahmedabad Drive road Ahmedabad Satellite road,Ahmedabad C.G.road Ahmedabad C.G.road, Ahmedabad Gallops mall, Ahmedabad Categories Apparel, accessories Apparel, furnishing Apparel, accessories Styled clothing Relaxed wear, body care product Footwear, accessories
Key players in electronic retail
Future group- ezone
Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons. Woolworths Ltd, the Australian retail giant, provides technical support and strategic sourcing facilities from its global network.
Infiniti Retail Limited , is a 100% subsidiary of Tata Sons Ltd., promoted to operate in the promising consumer electronics retail market that is evolving in India.
Infiniti Retail, has entered into a technical and sourcing agreement with an Australian retail giant, Woolworths Ltd ., which currently operates more than 2000 stores across Australia in 12 different formats, including consumer electronics retailing. Infiniti Retail Ltd., will own and run the retail operations in India, while Woolworths will provide technical support and strategic sourcing facilities from its global network.
Infiniti Retail has announced its plans to operate a national chain of multi brand outlets of consumer electronics and durables, under the brand name ‘CROMA’ . These electronics mega stores, will offer the country’s widest range of consumer electronics products across categories and brands. W ith more than 6000 products, 180 brands and 8 categories – Home Entertainment, Small Appliances, White Goods, Computers, Communication, Music, Imaging and Gaming software - the stores will be spread over 15000 to 20000 sq.ft.
The first ‘Croma’ store was inaugurated on 9th October 2006, in a suburb of Mumbai, Juhu. Croma is now also at Malad in Mumbai and has opened it doors in Ahmedabad too. Infiniti Retail Limited plans to launch 30 such large format stores across the country by 2008. Infiniti Retail has ambitious plans to expand across India with at least 100 stores by 2010.
With the philosophy of ‘We help you buy’ , this high tech store promises to provide world class service through a team of highly qualified and trained staff, the best product range in India to choose from and great prices on a consistent basis.
Big players in retail
Future group- big bazaar, food bazaar, pantaloons etc.
Reliance retail- marks & spencer
RPG group- spencer
Tata tesco- star bazaar
Small players in retail
Vishal mega mart retail
Organized Retail in India The share of organized retail in total retail pie is set to increase from about 3% to 8 – 10 % by 2010.
Organized retail pie 2007 Market size Rs.78300 cr.
Types of retail market
Hyper market- more than 75000 square feet
Super market- less than 75000 square feet
Neighborhood store- 3500 to 5000 square feet
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
Current Retail Growth Projections
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% p.a.
Gaps in Current Organized Retail
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