Overview Of The


Published on


Published in: Business
  • wonderful presentation
    Are you sure you want to  Yes  No
    Your message goes here
  • do give feedback . u r feedback is valuable for my further improvement in presentations
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Overview Of The

  1. 1. OVERVIEW OF THE RETAIL INDUSTRY R.Veena bhargavi 0911-057 Institute of public enterprise[IPE]
  2. 2. INTRODUCTION <ul><li>The indian retail industry is the largest among all other industries , accounting for over 10 percent of GDP and around 8 percent of the employment. </li></ul><ul><li>Most dynamic and fast paced industries </li></ul><ul><li>Several players entering the market. </li></ul><ul><li>Gradually inching its way towards becoming the next boom industry. </li></ul><ul><li>Total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behaviour, ushering ina revolution in shopping in india. </li></ul>
  3. 3. Contd… <ul><li>Modern retailing in india observed in the form of </li></ul><ul><li>Bustling shopping centres </li></ul><ul><li>Multi stored malls </li></ul><ul><li>Huge complexes </li></ul><ul><li>The growth pattern in organized retailing and in the consumption made by the indian population and follow a rising graph helping the newer business men to enter the indian retail industry. </li></ul><ul><li>Key attractive forces for global retail giants are: </li></ul><ul><li>Huge population </li></ul><ul><li>Rising incomes </li></ul><ul><li>Increase in purchasing power </li></ul>
  4. 4. Indian retail scene <ul><li>Industry to grow faster, indian retail is expected to grow 25 percent annually. Modern retail in india could be worth US$ 175-200 billion by 2016. </li></ul><ul><li>Mobile phone retail industry in india is already a US$ 16.7 billion business , growing at over 20 percent per year. </li></ul><ul><li>More than 99% retailler’s function in less than 500 square feet of shopping space. </li></ul><ul><li>According to global retail consultants KSA tachnopak- organized retailing is expected to touch 35,000 crore. </li></ul>
  5. 5. Estimations : <ul><li>At around Rs.900,000 crore </li></ul><ul><li>organized sector accounts for 2 percent indicating a huge potential market opportunity that is lying in the waiting for the consumer –savvy organized retailer. </li></ul><ul><li>McKinsey report ‘ The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025. </li></ul><ul><li>Expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. </li></ul><ul><li>India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent </li></ul><ul><li>organized retail, which accounts for almost 5 per cent of the market, is expected to grow at a CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013. </li></ul>
  6. 6. Strategies, trends and opportunities : <ul><li>The whole shopping concept has altered in terms of format and consumer buying behaviour, ushering in a revolution in shopping in India. </li></ul><ul><li>Entry of modern retail in india as seen in: </li></ul><ul><li>Sprawling shopping centres </li></ul><ul><li>Multi stored malls </li></ul><ul><li>Huge complexes offers shopping, entertainment and food under one roof </li></ul>
  7. 7. Industry revolution <ul><li>The emergence of the neighbourhood ‘ kirana ‘ stores catering to the convenience of the consumers. </li></ul><ul><li>Era of govt. support for rural retail: indigenious franchise model of store chainsrun by khadi & village industries commission. </li></ul><ul><li>1980’s experienced slow change as india began to open up economy. </li></ul><ul><li>Textiles sector with companies like bombay dyeing, raymond’s, s kumar’s and grasim first saw the emergence of retail chains. </li></ul><ul><li>The latter half of the 1990’s saw a fresh wave of entrants with a shift from manufacturers to pure retailers. </li></ul><ul><li>Ex:Food world, subhiksha and nilgiris in food and FMCG ; </li></ul><ul><li>Planet M and Music world in music </li></ul><ul><li>Crossword and Fountainhead in books. </li></ul>
  8. 8. Contd… <ul><li>Post 1995 onwards saw an emergence of shopping centres, mainly in urban areas, with facilities like car parking, targeted to provide a complete destination experience for all segments of society. </li></ul><ul><li>Emergence of hyper and super markets trying to provide customer with 3V’S ( VALUE , VARIETY , VOLUME ) </li></ul><ul><li>At year end of 2000 the size of the indian organized retail industry is estimated at Rs. 13,000 crore. </li></ul>
  9. 9. Key growth drivers <ul><li>1)Consumer Pull </li></ul><ul><li>a) high income segment </li></ul><ul><li>b) Middle and lower income group </li></ul><ul><li>2) Rising Incomes </li></ul><ul><li>3) Explosion of Media </li></ul><ul><li>4) Change in Consumer Behavior </li></ul><ul><li>5) Consumerism Cycle </li></ul><ul><li>6) The rural Market waking up </li></ul><ul><li>7)Establishment of the Supply Chain </li></ul>
  10. 10. Contd… <ul><li>8) Emergence of Hubs of Retail Activity </li></ul><ul><li>9) Change in Scale of Operations </li></ul><ul><li>10) Entry to the Corporate Sector </li></ul><ul><li>11) Expansion of family owned businesses </li></ul><ul><li>12) New Entrepreneurs </li></ul><ul><li>13) Foreign retailers looking for entry options </li></ul>
  11. 11. Retailing format in India: <ul><li>Malls( largest form of organized retailing) </li></ul><ul><li>Discount stores ( or factory outlets ) </li></ul><ul><li>Department stores(large stores) </li></ul><ul><li>Hyper marts/ supermarkets – large self service outlets </li></ul><ul><li>Convenience stores(relatively small stores) </li></ul><ul><li>MBO’S – category killers </li></ul>
  12. 12. Recent trends(INDIA) <ul><li>Rated as 5 th most attractive retail market: a potential goldmine. </li></ul><ul><li>Ranked 2 nd in global ratil development index of 30 developing countries drawn up by AT kearney. </li></ul><ul><li>More successful in the south and west of India, reasons:range from difference in consumer buying behaviour to cost ofreal estate and taxation laws. </li></ul><ul><li>E-tailing slowly its presence felt. </li></ul>
  13. 13. RURAL MARKET <ul><li>Huge opportunity for retailers reflecting in the share of the rural hypermarkets. </li></ul><ul><li>ITC is experimenting with retailing through its e-choupal and choupal sagar as rural hypermarkets. </li></ul><ul><li>HLL is using its project shakti initiative- leveraging womenself help groups- explore the rural market. </li></ul><ul><li>Mahamaza –leveraging technology and network marketing concepts -act as an aggregator – to serve rural markets. </li></ul>
  14. 14. SCENARIO OF RETAILING IN INDIA <ul><li>Retailing is the most active and attractive sector of last decade. While the retailing industry itself has been present since ages in our country, it is only the recent past that it has witnessed so much dynamism. </li></ul><ul><li>The emergence of retailing in India has more to do with </li></ul><ul><li>increased purchasing power of buyers, especially post-liberalization, </li></ul><ul><li>increase in product variety </li></ul><ul><li>increase in economies of scale, </li></ul><ul><li>aid of modern supply </li></ul><ul><li>distributions solution. Indian retailing today is at an interesting crossroads. </li></ul><ul><li>The retail sales are at the highest point in history and new technologies are improving retail productivity. though there are many opportunities to start a  new retail business, retailers are facing numerous challenges. </li></ul>
  15. 15. PRESENT INDIAN RETAIL SCENARIO <ul><li>* Unorganized market: Rs. 583,000 crores * Organized market: Rs.5, 000 crores * 5X growth in organized retailing between 2000-2005 * Over 4,000 new modern Outlets in the last 3 years * Over 5,000,000 sq. ft. of mall space under development * The top 3 modern retailers control over 750,000 sq. ft. of retail space * Over 400,000 shoppers walk through their doors every week * Growth in organized retailing on par with expectations and projections of the last 5 Years: on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2005-06 </li></ul>
  16. 16. MAJOR PLAYERS <ul><li>Food and grocery - Fashion - Others - Food world - Shoppers' Stop - Vivek's - Subhiksha - Westside - Planet M - Nilgris </li></ul><ul><li>Lifestyle - Music World - Adani- Rajiv's - Pyramid - Crossword - Nirma-Radhey - Globus - Life spring </li></ul>
  17. 18. TRADITIONAL RETAIL SCENE IN INDIA <ul><li>India is the country having the most unorganized retail market. Traditionally the retail business is run by Mom & Pop having Shop in the front & house at the back. More than 99% retailers function in less than 500Sq.Ft of area. </li></ul><ul><li>Branding was not an issue for majority of customers. </li></ul><ul><li>More than 99% customers are price sensitive & not quality or Brand Sensitive at the same time they are Brand conscious also. Ex: Weekly Bazaar in many small towns. </li></ul><ul><li>Bargaining - unwritten law of market. </li></ul><ul><li>Educational qualification level - retailers - always low. </li></ul><ul><li>Hence market was controlled by handful of distributors &/or Wholesalers. </li></ul><ul><li>Virtually there was only one format of retailing & that was mass retail. </li></ul>
  18. 19. <ul><li>Retailer to consumer ratio was very low, for all the categories without exception. </li></ul><ul><li>Varity in terms of quality, Styles were on regional basis, community based & truly very low range was available at any given single place. </li></ul><ul><li>Impulsive buying or consumption is restricted to food or vegetables etc. </li></ul><ul><li>Luxury for majority population except for those living in Metros. </li></ul><ul><li>ex:Having extra pair of trousers or Shirts or Casuals & Formals & leisure wear. </li></ul>
  19. 20. <ul><li>Brand name does matter in these white goods categories. </li></ul><ul><li>In the coming times also majority of organized retailers will find it difficult to keep balance with rest of the unbranded retail market which is very huge. </li></ul>
  20. 21. INDIAN RETAIL -MOVING INTO SECOND GEAR <ul><li>1) FIRST GEAR: (Create awareness) * New retailers driving awareness * High degree of fragmentation * Real estate groups starting retail chains * Consumer expecting 'value for money' as core value </li></ul>
  21. 22. Contd… <ul><li>2) SECOND GEAR: (Meet customer expectations) * Consumer-driven * Emergence of pure retailers * Retailers getting multi-locational and multi-format * Global retailers evincing interest in India </li></ul>
  22. 23. Contd… <ul><li>3) THIRD GEAR: (Back end management) * Category management * Vendor partnership * Stock turns * Channel synchronization * Consumer acquisition * Customer relation's management </li></ul>
  23. 24. Contd… <ul><li>4) FOURTH GEAR: (Consolidation) * Aggressive rollout * Organized retail acquitting significant share * Beginning of cross-border movement * Mergers and acquisitions </li></ul>
  24. 25. conclusion: <ul><li>As the retail marketplace changes shape and competition increases, the potential for improving retail productivity and cutting costs is likely to decrease. </li></ul><ul><li>Therefore, it will become important for retailers to secure a distinctive position in the marketplace based on value, relationships or experience. </li></ul><ul><li>These strategies are not strictly independent of each other; value is function of not just price, quality and service but can also be enhanced by Personalization and offering a memorable experience. </li></ul><ul><li>In fact, building relationships with customers can by itself increase the quality of overall customer experience and thus the perceived value. </li></ul><ul><li>But most importantly for winning in this intensely competitive marketplace, it is critical to understand the target customer's definition of value and make an offer, which not only delights the customers but also is also difficult for competitors to replicate.   </li></ul>
  25. 26. <ul><li>Thank you!!!!!!!! </li></ul>