Retail Industry Analysis


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Retail Industry Analysis

  1. 1. Industry Outlook - Retail
  2. 2. Organized Vs Unorganized Retail Sector <ul><li>Organized Retail Sector </li></ul><ul><li>Unorganized Retail Sector </li></ul>
  3. 3. Organized Vs Unorganized Retail Sector Factor Organized Retail Sector Unorganized Retail Sector Definition Modern form of retailing Traditional form of retailing Examples Hypermarket, Retail chain etc. Mom n Pop stores, hand cart, pavement vendors etc Market Share 3% 97% Market Growth 35% 6% Challenges Poor supply chain management, aggressive expansion etc. Use of labour intensive technology, lack of government support etc.
  4. 5. Retail Trade – India, USA, China Country Trade ($b) Employment Shops (mn) Organized sector India 180-394 7 1.2 2-3 China 360 12 2.7 20 UAS 3800 12.6-16 15.3 80
  5. 6. Key Growth Drivers <ul><li>Economic Growth </li></ul><ul><li>Demographics </li></ul><ul><li>Urbanization </li></ul><ul><li>Credit availability </li></ul>
  6. 8. Different Formats
  7. 9. Big Shots of the Industry
  8. 10. <ul><li>Pantaloon Retail </li></ul><ul><li>Raheja Group </li></ul><ul><li>Reliance Retail </li></ul><ul><li>Tata Group </li></ul><ul><li>RPG Group </li></ul><ul><li>Landmark Group </li></ul><ul><li>Piramal Group </li></ul><ul><li>Bharti - Walmart </li></ul><ul><li>A V Birla Group </li></ul>
  9. 11. Pantaloon Retail <ul><li>Headquartered in Mumbai 450 stores across the country employing more than 18,000 people. </li></ul><ul><li>All India space- 5 mn sq.ft, expecting to reach 30 mn by 2010. </li></ul><ul><li>Various segment including food & grocery, home solutions, consumer electronics, Health & Beauty product etc. </li></ul><ul><li>Recent Innovations include e-commerce ‘Hybrid Format of ‘Small shops’ </li></ul>
  10. 12. Raheja Group <ul><li>First Departmental store in India , SHOPPER’S STOP </li></ul><ul><li>Member of IGDS </li></ul><ul><li>7,52,000 sq.ft. retail space with turnover of 6.75 millions </li></ul><ul><li>Crossword, Mothercare, Home stop etc. </li></ul><ul><li>MOU with Home retail group of UK </li></ul><ul><li>Plan to establish network of 55 hypermarkets across the country with sales turnover of US$ 100 million by2010. </li></ul>
  11. 13. Reliance Retail <ul><li>More than 300 Reliance fresh store and first Reliance Mart hypermarket in Ahmedabed </li></ul><ul><li>Expansion in two tier cities like Vijaywada, Pune, Ludhiana etc </li></ul><ul><li>Investment of Rs.30,000 cr to set up new formats of retail , expecting sales of Rs.90,000 cr by 2010 </li></ul>
  12. 14. Tata Retail Group <ul><li>Established in 1998 </li></ul><ul><li>Trent- subsidies of Tata group operates Westside and Star India Bazaar, Croma </li></ul><ul><li>Plans to pen more than 27 stores across its retail formats adding 1.5 mn sq.ft. of space in the next 12 DLF malls </li></ul>
  13. 15. A V Birla Group <ul><li>Strong presence in apparel- Madura Garments </li></ul><ul><li>Owned Brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England </li></ul><ul><li>Investment plan – Rs.8000-9000 cr in the first 3 years till 2010 </li></ul><ul><li>“ MORE” range of 15 supermarkets open at Nashik, Pune & other two tier cities </li></ul>
  14. 16. Merger & Acquisition Year Acquired/ JV Company / Target Acquirer Nature of Business Stake Consideration (US$ million) 2005 Liberty shoes Future Group Retail (footwear) 51% 3 2005 Indus- league clothing Future Group Retail Clothing 68% 5 2005 Odyssey India Deccan Chronicle holdings Leisure Retail chain (books, music, toys) 100% 14 2005 Landmark Tata Trent Books, Music, Accessories 74% 24 2006 Bistro hospitality TGI Friday’s Restaurant 25% N/A 2006 Indus League clothing Etam Group, France Lingerie & women’s wear retailing 50% 8
  15. 17. Current Potential & Prospect of Indian Retail Sector
  16. 18. <ul><li>Growth prospective </li></ul><ul><li>Hurdles in growth phenomenon </li></ul><ul><li>Supportive measures by Government </li></ul><ul><li>Current market meltdown & its impact </li></ul><ul><li>Overall scenario about Indian retail industry </li></ul>
  17. 19. Changing face of Indian Consumerism
  18. 20. Important Trends <ul><li>The whole concept of shopping ……change </li></ul><ul><li>Heavy pockets … </li></ul><ul><li>The Mall Mania… </li></ul><ul><li>Mall ….. Shopping + Entertainment </li></ul>
  19. 21. Map of India’s Income class 1994 – 1995 1999 – 2000 2007 – 2008 Rich (Annual income >US$ 4700) Benefit Maximize: Owns CAR, PC 1 mn household 3 mn HH 6 mn HH Consuming (US$ 1000- 4700) Cost-benefit optimizer: have bulk of branded consumer goods, 70% of 2-wheelers, refrigerators, washing machine 29 mn HH 55 mn HH 75 mn HH Climbers (US$ 500-1000) Cash-constrained benefit seekers: have at least one major durable(mixer, sewing machine, television) 48 mn HH 66 mn HH 78 mn HH
  20. 22. Source: Ernst & Young Aspirants (US$ 350-500) New entrants into consumption: have bicycle, radio, fans 48 mn HH 32 mn HH 33 mn HH Destitute (Less than US$ 350) Hand to mouth existence: Not buying 35 mn HH 24 mn HH 17 mn HH
  21. 23. Consumer Dynamics <ul><li>Youngest population on the globe </li></ul><ul><li>Growth pace of the Indian economy </li></ul><ul><li>97% retail market is untouched by organized retailers </li></ul><ul><li>Food & Grocery …………………. 55% </li></ul><ul><li>Consumption is moving out of the home </li></ul><ul><li>Indian consumers has grown richer… </li></ul>
  22. 24. The process of recruitment followed in India in organized retail industry <ul><li>For Junior level </li></ul><ul><li>Junior level , required in a mass number. </li></ul><ul><li>-> go ahead with paper ads for walk-ins </li></ul><ul><li>Requirement is less for junior level </li></ul><ul><li>-> go ahead with consultants and reference recruitments </li></ul><ul><li>Search for retail positions </li></ul>
  23. 25. For Junior level <ul><li>The recruitment process starts with an interview taken by </li></ul><ul><li>-> department managers </li></ul><ul><li>-> followed by store manager </li></ul><ul><li>-> HR </li></ul><ul><li>-> team leaders. </li></ul>
  24. 26. What is the process of recruitment followed in India in organized retail industry? <ul><li>For Middle level </li></ul><ul><li>Middle level, then </li></ul><ul><li>-> consultants </li></ul><ul><li>-> Job - portals </li></ul><ul><li>-> news paper ads of walk-ins. </li></ul>
  25. 27. For Middle level <ul><li>The recruitment process starts with first short listing by HR then interview is conducted with </li></ul><ul><li>-> department head </li></ul><ul><li>-> Store Manager </li></ul><ul><li>-> Zonal Manager </li></ul><ul><li>-> HR </li></ul>
  26. 28. Recession- hit- recruitment strategies <ul><li>Optimizing staff potential </li></ul><ul><li>Adopt a scientific method in their recruitment policies, </li></ul><ul><li>Laying more emphasis on quality than quantity. </li></ul><ul><li>Aim to hire people in large numbers to shortlist the ones that are 'best available' geographically. </li></ul><ul><li>The PAC test to decide from “where to hire” and “where to locate the firm </li></ul>
  27. 29. Why does Company hire Placement Consultants <ul><li>To help them to find the right candidate to join their organization. </li></ul><ul><li>Job Seekers contact Recruitment firms to help them identify and then apply for the right job. </li></ul>
  28. 30. The role of recruitment agents and consultants vis-à-vis employment with organized retail in India. <ul><li>Who are Placement Consultants in the Job & Recruitment Industry </li></ul><ul><li>-> an entity that works towards reducing clutter </li></ul><ul><li>-> streamlining the manpower requirements of Companies, big and small. </li></ul><ul><li>-> These firms serve as middlemen and help organizations and job seekers to find each other! </li></ul>COMPANY APPLICANTS CONSULATNATS
  29. 31. How It Works: <ul><li>Consultants work for a number of different Companies, small and large. </li></ul><ul><li>These head hunter groups receive details about the job vacancy such as job responsibilities, desired experience, remuneration etc. </li></ul><ul><li>Next, Consultants go through their present database of job seekers registered with them. This database of aspiring candidates is a Placement Consultant's resource built over a period of time. </li></ul><ul><li>Job seekers contact recruitment firms either through phone, email or walk ins and register their Resumes with them. </li></ul><ul><li>Next, the wait begins - candidates hope to be informed of good openings and prepare themselves for interviews. </li></ul>
  30. 32. How to apply for a job through Placement Consultants: <ul><li>Identifying a Placement Firm </li></ul><ul><li>Contacting them </li></ul><ul><li>Following Up </li></ul><ul><li>Jobs and Career Websites </li></ul><ul><li>  </li></ul>
  31. 33. Positions & Remunerations Serial no. Particulars Salary 1 Technical Engineer 20000 2 Accounts Manager 15000 3 Accounts Assistance (Back Office, HR, Recovery, Bills) 10000 4 Sales & Marketing Manager 25000 5 Sales & Marketing Executive 20000 6 Front Desk Customer Care Executive 8000 7 Technical Supervisors (MST) 15000 8 Bouncers / Supervisors 12000 9 Store Manager 35000 10 Merchandise Manager 25000
  32. 35. Strengths weakness <ul><li>Technology Incentive </li></ul><ul><li>Super Market Stocks </li></ul><ul><li>Rising Disposable Income </li></ul><ul><li>Increase in number of people in earner category </li></ul><ul><li>Low conversion level </li></ul><ul><li>Customer Loyalty </li></ul><ul><li>Underdeveloped supply chain </li></ul><ul><li>Lack of adequate utilities </li></ul>opportunity threat <ul><li>Large consumer market </li></ul><ul><li>Growth of Organized sector </li></ul><ul><li>Rural Retailing </li></ul><ul><li>Potential for Investment </li></ul><ul><li>High market share of unorganized market </li></ul><ul><li>Shopping Culture </li></ul><ul><li>Poor inventory turns & stock availability measures </li></ul><ul><li>Inflation </li></ul>