Rural Retailing
Contents <ul><li>Rural Markets. </li></ul><ul><li>Retail – Supply chain in India.  </li></ul><ul><li>Major Players in rura...
Rural Markets. <ul><li>Overview </li></ul><ul><ul><li>70% population lives in villages </li></ul></ul><ul><ul><li>About 66...
Retail- Supply Chain in India <ul><li>India is a leading destination for retail investment </li></ul><ul><li>Expected to g...
Contd… <ul><li>Perspective of Rural Markets </li></ul><ul><ul><li>Consumer market point of view </li></ul></ul><ul><ul><li...
Importance of Rural Markets. <ul><li>Rural per capita consumption expenditure grew by 11.5%  </li></ul><ul><li>Household h...
Contd… <ul><li>22% population having income more than 10,00,000 are in rural areas </li></ul><ul><li>Rural employment has ...
Contd… <ul><li>Logistics industry contributes to 3% GDP in India as compared to 53% contribution in China. </li></ul><ul><...
Contd. <ul><li>Effective SCM is based on 4 “R’s” </li></ul><ul><ul><li>Right time. </li></ul></ul><ul><ul><li>Right place....
Contd… <ul><li>Advantages of effective SCM & Inventory Management: </li></ul><ul><ul><li>Sustained inventory reduction by ...
Contd… <ul><li>Key players in logistics have started focusing on enhanced services. </li></ul><ul><li>Cold chain: </li></u...
Major Players <ul><li>Godrej – </li></ul><ul><ul><li>Adhaar  – Initiative of Godrej Agrovet Ltd. </li></ul></ul><ul><ul><l...
Condt. <ul><li>Objective: </li></ul><ul><ul><li>Improve the productivity. </li></ul></ul><ul><ul><li>Higher returns & impr...
Contd… <ul><li>Reliance Industries Ltd.- </li></ul><ul><li>Rural Retail Hubs (RRHs). </li></ul><ul><li>Procuring fresh fru...
Contd… <ul><li>MAX New York Life- </li></ul><ul><ul><li>Triveni Khushali Bazar (TKB). </li></ul></ul><ul><ul><li>TKB has n...
Contd… <ul><li>Sold approx. 2.3 lack policies. </li></ul><ul><li>25% of policies received from rural areas. </li></ul>
Contd… <ul><li>Indian Oil- </li></ul><ul><ul><li>Kisan Seva Kendra (KSK). </li></ul></ul><ul><ul><li>IOC plans to set up 5...
Retail- A boon for Indian farmers. <ul><li>F&G items account for 74% of total retail sales for un-organized and 18% for or...
Contd… <ul><li>Bharti Telecom launched its field fresh foods with ELRO </li></ul><ul><li>Reliance is investing about Rs. 5...
Horticulture: A Revolution <ul><li>Retail boom. </li></ul><ul><li>Horticulture growth is estimated to be 4% in India as co...
Public Private Partnership <ul><li>Operations run jointly with the private sector  </li></ul><ul><li>Roads and transportat...
Challenges in Retailing. <ul><li>Changing consumer buying behavior: </li></ul><ul><ul><li>Increase in disposable income. <...
Contd… <ul><li>Retail space constraints: </li></ul><ul><ul><li>Increase in realty prices. </li></ul></ul><ul><ul><li>Conce...
Contd… <ul><li>Human resource, a major challenge: </li></ul><ul><ul><li>Lack of trained professionals. </li></ul></ul><ul>...
Contd… <ul><li>Other Issues </li></ul><ul><ul><li>Infrastructure. </li></ul></ul><ul><ul><li>Political Opposition. </li></...
Trends in retailing. <ul><li>Entry of new retail formats: </li></ul><ul><ul><li>Large supermarkets (3,500-5,000 sq.ft). </...
Contd. <ul><li>A potential goldmine: </li></ul><ul><ul><li>Estimated to be US$ 200 billion, of which organized retailing m...
Contd… <ul><li>Entry of corporate groups </li></ul><ul><li>I.T in Retail </li></ul>
Scope in retailing. <ul><li>The future of retail will be driven by the following factors: </li></ul><ul><ul><li>Higher lev...
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Rural retailing in India

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Rural retailing in India

  1. 1. Rural Retailing
  2. 2. Contents <ul><li>Rural Markets. </li></ul><ul><li>Retail – Supply chain in India. </li></ul><ul><li>Major Players in rural retailing. </li></ul><ul><li>Retail – A boon for farmers. </li></ul><ul><li>Horticulture Revolution. </li></ul><ul><li>Public Private Partnership. </li></ul><ul><li>Challenges in retailing. </li></ul><ul><li>Trends in retialing. </li></ul><ul><li>Scope in retailing. </li></ul>
  3. 3. Rural Markets. <ul><li>Overview </li></ul><ul><ul><li>70% population lives in villages </li></ul></ul><ul><ul><li>About 66,000 villages are in India </li></ul></ul><ul><ul><li>Efforts by players to bridge the urban-rural gap </li></ul></ul>
  4. 4. Retail- Supply Chain in India <ul><li>India is a leading destination for retail investment </li></ul><ul><li>Expected to grow at a rate higher than GDP. </li></ul><ul><li>Efficient logistics and supply chain is one of the </li></ul><ul><li>key factors for success. </li></ul><ul><li>Retail sector proves to be a backbone to a host of allied sectors (eg.: agriculture, logistics etc). </li></ul><ul><li>Source: </li></ul><ul><li>-Kearney’s 2006 Global retail development index position. </li></ul><ul><li>-KPMG report </li></ul>
  5. 5. Contd… <ul><li>Perspective of Rural Markets </li></ul><ul><ul><li>Consumer market point of view </li></ul></ul><ul><ul><li>Economic market point of view </li></ul></ul><ul><ul><li>Social market point of view </li></ul></ul>
  6. 6. Importance of Rural Markets. <ul><li>Rural per capita consumption expenditure grew by 11.5% </li></ul><ul><li>Household having income between 90,000 to 2,00,000 are increasing by 5.7% </li></ul><ul><li>Projected growth rate of such household is 11% by 2009-10 </li></ul>
  7. 7. Contd… <ul><li>22% population having income more than 10,00,000 are in rural areas </li></ul><ul><li>Rural employment has gradually shifting from Agriculture </li></ul>
  8. 8. Contd… <ul><li>Logistics industry contributes to 3% GDP in India as compared to 53% contribution in China. </li></ul><ul><li>Outsourcing logistics can be one of the options. </li></ul><ul><li>Effective SCM and Inventory Management enables: </li></ul><ul><ul><li>Realistic ordering lead times. </li></ul></ul><ul><ul><li>Averting problems. </li></ul></ul><ul><ul><li>Facilitating efficient planning and allocations. </li></ul></ul>
  9. 9. Contd. <ul><li>Effective SCM is based on 4 “R’s” </li></ul><ul><ul><li>Right time. </li></ul></ul><ul><ul><li>Right place. </li></ul></ul><ul><ul><li>Right price. </li></ul></ul><ul><ul><li>Right quantity. </li></ul></ul>
  10. 10. Contd… <ul><li>Advantages of effective SCM & Inventory Management: </li></ul><ul><ul><li>Sustained inventory reduction by 60% </li></ul></ul><ul><ul><li>Improved forecast by 30% </li></ul></ul><ul><ul><li>Enhanced store shelf stock by 8% </li></ul></ul><ul><ul><li>Increased sales by 20% </li></ul></ul><ul><ul><li>Reduced logistics as much as by 4% </li></ul></ul>
  11. 11. Contd… <ul><li>Key players in logistics have started focusing on enhanced services. </li></ul><ul><li>Cold chain: </li></ul><ul><ul><li>Is one of the core requirements especially when it comes to food retailing. </li></ul></ul><ul><ul><li>Industry growing at a rate of 20-25%. </li></ul></ul>
  12. 12. Major Players <ul><li>Godrej – </li></ul><ul><ul><li>Adhaar – Initiative of Godrej Agrovet Ltd. </li></ul></ul><ul><ul><li>One stop solution for all needs of rural populace. </li></ul></ul><ul><ul><li>Positioned as `Godrej Aadhaar – ‘Khushiyon Ka, Khushhali Ka’. </li></ul></ul><ul><ul><li>Multi category retail outlet. </li></ul></ul><ul><ul><li>Tie up with Apollo Hospitals. </li></ul></ul>
  13. 13. Condt. <ul><li>Objective: </li></ul><ul><ul><li>Improve the productivity. </li></ul></ul><ul><ul><li>Higher returns & improved cost benefit ratio. </li></ul></ul><ul><ul><li>Crop advisory benefits. </li></ul></ul><ul><ul><li>Soil and water testing services. </li></ul></ul><ul><ul><li>Crop finance. </li></ul></ul><ul><ul><li>Supply of agri-inputs & Animal feeds. </li></ul></ul><ul><ul><li>Information services. </li></ul></ul>
  14. 14. Contd… <ul><li>Reliance Industries Ltd.- </li></ul><ul><li>Rural Retail Hubs (RRHs). </li></ul><ul><li>Procuring fresh fruits and vegetables, their handling, storage and processing. </li></ul><ul><li>Back-end support. </li></ul><ul><li>Tie ups with northern states of India. </li></ul>
  15. 15. Contd… <ul><li>MAX New York Life- </li></ul><ul><ul><li>Triveni Khushali Bazar (TKB). </li></ul></ul><ul><ul><li>TKB has now 45 rural malls. </li></ul></ul><ul><ul><li>Expansion of sugar production capacity. </li></ul></ul><ul><ul><ul><li>Children’s education. </li></ul></ul></ul><ul><ul><ul><li>Daughter’s marriage. </li></ul></ul></ul><ul><ul><ul><li>Other customised policies. </li></ul></ul></ul><ul><ul><ul><li>Flexible premium payment options. </li></ul></ul></ul>
  16. 16. Contd… <ul><li>Sold approx. 2.3 lack policies. </li></ul><ul><li>25% of policies received from rural areas. </li></ul>
  17. 17. Contd… <ul><li>Indian Oil- </li></ul><ul><ul><li>Kisan Seva Kendra (KSK). </li></ul></ul><ul><ul><li>IOC plans to set up 5,000 KSKs across India by 2012. Currently, 738 KSKs have been established. </li></ul></ul><ul><ul><li>Selling agro-inputs. </li></ul></ul><ul><ul><li>Banking, communication and Internet facilities, also offer financial services. </li></ul></ul>
  18. 18. Retail- A boon for Indian farmers. <ul><li>F&G items account for 74% of total retail sales for un-organized and 18% for organized retailers. </li></ul><ul><li>Companies aiding farmers. </li></ul><ul><li>Modernized farming practices. </li></ul><ul><li>Retail chains are sourcing produce through three routes </li></ul><ul><ul><li>Village markets or mandis </li></ul></ul><ul><ul><li>APMC yards. </li></ul></ul><ul><ul><li>Directly linking with farmers. </li></ul></ul>
  19. 19. Contd… <ul><li>Bharti Telecom launched its field fresh foods with ELRO </li></ul><ul><li>Reliance is investing about Rs. 50,000 crores in farm-to-farm linkage </li></ul><ul><li>Major players investing to introduce modernized practices in agriculture </li></ul><ul><li>Introduction of “Aadhar” by Godrej </li></ul>
  20. 20. Horticulture: A Revolution <ul><li>Retail boom. </li></ul><ul><li>Horticulture growth is estimated to be 4% in India as compared to 56% globally. </li></ul><ul><li>Huge investment – World Bank. </li></ul><ul><li>2% growth in production </li></ul>
  21. 21. Public Private Partnership <ul><li>Operations run jointly with the private sector </li></ul><ul><li>Roads and transportation has been improved through PPP </li></ul><ul><li>Warehousing and supply chain has been improved through PPP </li></ul>
  22. 22. Challenges in Retailing. <ul><li>Changing consumer buying behavior: </li></ul><ul><ul><li>Increase in disposable income. </li></ul></ul><ul><ul><li>Western Influences. </li></ul></ul><ul><ul><li>Increase in women work force. </li></ul></ul><ul><ul><li>Desire for luxury items. </li></ul></ul><ul><ul><li>Demand for better Quality. </li></ul></ul>
  23. 23. Contd… <ul><li>Retail space constraints: </li></ul><ul><ul><li>Increase in realty prices. </li></ul></ul><ul><ul><li>Concentration of other retailers in the same locality. </li></ul></ul><ul><ul><li>Non-availability of required space. </li></ul></ul>
  24. 24. Contd… <ul><li>Human resource, a major challenge: </li></ul><ul><ul><li>Lack of trained professionals. </li></ul></ul><ul><ul><li>High attrition rate. </li></ul></ul><ul><ul><li>Low-salary/ wages. </li></ul></ul>
  25. 25. Contd… <ul><li>Other Issues </li></ul><ul><ul><li>Infrastructure. </li></ul></ul><ul><ul><li>Political Opposition. </li></ul></ul><ul><ul><li>Entry of global giants. </li></ul></ul>
  26. 26. Trends in retailing. <ul><li>Entry of new retail formats: </li></ul><ul><ul><li>Large supermarkets (3,500-5,000 sq.ft). </li></ul></ul><ul><ul><li>Mini supermarkets (1,000-2,000 sq.ft). </li></ul></ul><ul><ul><li>Convenience stores (750-1000 sq.ft). </li></ul></ul>
  27. 27. Contd. <ul><li>A potential goldmine: </li></ul><ul><ul><li>Estimated to be US$ 200 billion, of which organized retailing makes up 3 percent or US$ 6.4 billion. </li></ul></ul><ul><ul><li>Growth of department stores is estimated at 24%. </li></ul></ul><ul><ul><li>Ranked second in a Global Retail. </li></ul></ul>
  28. 28. Contd… <ul><li>Entry of corporate groups </li></ul><ul><li>I.T in Retail </li></ul>
  29. 29. Scope in retailing. <ul><li>The future of retail will be driven by the following factors: </li></ul><ul><ul><li>Higher level of working women </li></ul></ul><ul><ul><li>Increase in nuclear families </li></ul></ul><ul><ul><li>Expected to grow to 25-30% by the year 2010 . </li></ul></ul><ul><ul><li>Expected growth to USD 280 billion by 2010-11 . </li></ul></ul>

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