The Great Indian Retail Story

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The Great Indian Retail Story - Presentation Transcript

  1.  
  2. Retailers belong to a place called… 1
  3. … a population of mastodons … always ready for cannibalism … invading green pastures worldwide … healthier than ever 2
  4. Retailers – A population of mastodons Global Nine retailers belong to Fortune 100 3 Wal-Mart Home Depot Ahold Kroger Metro Sears Target Albertson's Carref. Retailers
  5. Retailers: Always ready for cannibalism Reliance Fresh Adani Superstores Wal-Mart ASDA Carrefour Promod é s Comptoirs Modernes 4
  6. Retailers: Invading green pastures worldwide International presence of top 20 retailers 5
  7. Retailers – Always healthier than ever Source: IL & FS Investment Managers Limited 6 29% 63.7 1,727 Shopper’s Stop (Since Listing May 2005) 54% 40 991 Trent 89% 60.2 3,561 Pantaloon Retail CAGR Returns 3 Year or On listing (appox) P/E Market Cap Rs Mn Company
  8. Global Retail Scenario 7 Fortune #1 “Wal-Mart” is a Retailer #1 50 Over 50 of the Fortune 500 companies are retailers 25 25 of the Asian Top 200 companies, are retailers 8 Global Retail industry is of size USD 8 Trillion
    • India’s increasingly affluent middle class - 300 million
    • Increasing proportion - higher disposable income 83,000 millionaires, India to be the fastest wealth creator by 2010
    • The New Age Indian Youth
    • – modern, well-informed, but still entrenched in
    • Indian value system - Price sensitive
    Indian Retail Scenario 8
    • Market Growth: 8 - 10% annual growth with 30% + growth rate for modern format retail.
    • Strong Economy: Fourth largest economy on Purchasing Parity Basis.
    • Market Opportunities: Growing consumer aspirations
    • together with very low penetration of modern format
    • retailing.
    • Infrastructure: Large amount of quality retail space being added.
    9 Indian Retail Scenario … Cont’d
  9. Evolution of Indian Retail Weekly Markets Village Fairs Melas Convenience Stores Mom and Pop/ Kiranas PDS Outlets Khadi Stores Cooperatives Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Source of Entertainment Neighborhood Stores/Convenience Availability/ Low Costs / Distribution Shopping Experience/Efficiency Historic/Rural Reach Traditional/Pervasive Reach Government Supported Modern Formats/ International 10
  10. Source: A.T Kearny GRDI India: #1 Emerging Retail Growth Market 11
  11. 12 Unorganized Retail Organized Retail < 3% Over 12 Million Outlets in India Organized Retail expected to be around Rs.110,000 Cr (USD 25 b) by 2010 Set to grow to 8-10% by 2010
  12. Source: Marketing Whitebook, 2006, Businessworld Consumer Expenditure in Organized Retail 13
  13. • Hyper marts • Large supermarkets, typically (3,500 - 5,000 sq. ft) • Mini supermarkets, typically (1,000 - 2,000 sq. ft) • Convenience store, typically (7,50 - 1,000 sq. ft) • Discount/shopping list grocer • Traditional retailers trying to reinvent by introducing self-service formats as well as value-added services such as credit, free home delivery etc. Retailing Formats Source: CII Report/Retail Scenario in India ~ Unlimited Opportunity 14
    • Hypermarket
      • Big Bazaar
      • Giants
      • Shoprite
      • Star Bazaar
    • Entertainment
      • Fame Adlabs
      • Fun Republic
      • Inox
      • PVR
    • Department store
      • Lifestyle
      • Pantaloons
      • Pyramids
      • Shoppers Stop
      • Trent
    Indian Retailers 15
  14. Entrance of Private Equity 16 NA Bennett & Coleman Vishal Retail NA ICICI Ventures Crossword Rs 450 mn GW Capital Trinethra and Fabmall Rs 350mn ICICI Ventures Subiksha Rs 752 mn IIML, ICICI Ventures and Zodiac Clothing Shoppers Stop Rs 750 mn ICICI Ventures,Bennett & Coleman Pantaloon Retail Amount Investor Company
  15. FDI in Indian Retailing
    • Franchise - Nike, Pizza Hut, Tommy Hilfiger, Marks and Spencer, Mango
    • Manufacturing – Bata India
    • Distribution - Swarovski, Hugo Boss
    • Wholesale Trading – Metro Cash & Carry
    • Food Outlets – McDonald’s, KFC, Pizza Hut, Dominos
    17
  16. Benefits of FDI 18
  17. The Changing Indian Consumer
    • The urban consumer
      • Getting exposed to international lifestyles
      • Inclined to acquiring asset
      • More discerning and demanding than ever
    • No longer need-based shopping
      • Shopping is a family experience
    • Changing Mindset
      • Increasing tendency to spend
      • Post Liberalization children coming of age
        • 100 mn 17-21 year olds*. Tend to spend freely.
    • Greater levels of education
    19
  18. • Automatic approval is not allowed for foreign investment in retail. • Regulations restricting real estate purchases, and cumbersome local laws. • Taxation, which favors small retail businesses. • Absence of developed supply chain and integrated IT management. • Lack of trained work force. • Low skill level for retailing management. Challenges of Retailing in India Source: CII Report/Retail Scenario in India ~ Unlimited Opportunity 20
  19. Recommendations
    • Grant full industry status to retail
    • Permit FDI in Retail in phases
    • Invest in supply chain infrastructure
    • Ease distribution – infrastructure creation, octroi
    • Ensure single window clearance for retail chains
    • Organize market for real estate
    • Ensure proper rent laws
    • Enforce zoning laws and city development plan
      • Increase land supply
    • Ensure flexibility of labor laws
    Source: ICICI Bank 21
    • Be ready!
    • Be realistic!
    • Be resilient!
    Implications for India 22
  20. … dinosaurs sometimes disappear !! And Don’t Forget….. 23

+ Rahul GuhathakurtaRahul Guhathakurta, 3 years ago

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