Retail Industry Recruitments


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Retail Industry Recruitments

  1. 1. The Indian Retail Sector
  2. 2. Presentation Flow <ul><li>1 )      Definition & Introduction </li></ul><ul><li>2)      Evolution in India </li></ul><ul><li>3)      Size of Industry </li></ul><ul><li>4)      Growth Rate (Past Vs. Present) </li></ul><ul><li>5)      Expected Future Growth </li></ul><ul><li>6)      Potential of Recruitment For The Industry </li></ul><ul><li>7)      Name 8 Major Players & their Turnovers </li></ul><ul><li>8)      Organization Structure (Different Division & Hierarchy) </li></ul><ul><li>9)      Salary & Qualification for each Position </li></ul><ul><li>10)       From a Recruitment Perspective what kind of Candidate will fit this Industry </li></ul>
  3. 3. Definition & Introduction <ul><li>Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store or kiosk , or by post, in small or individual lots for direct consumption by the purchaser. The retail companies are found to be rising in India at a remarkable speed with the years and this have brought a revolutionary change in the shopping attitude of the Indian customers </li></ul><ul><li>There are three major types of retailing:- Market. Selfservice and online shops. </li></ul>
  4. 4. Industry Evolution <ul><li>Traditionally retailing in India can be traced to </li></ul><ul><ul><li>The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers </li></ul></ul><ul><ul><li>Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission </li></ul></ul><ul><li>1980s 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>Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches </li></ul><ul><li>The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers. </li></ul><ul><li>For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. </li></ul><ul><li>Post 1995 onwards saw an emergence of shopping centers, </li></ul><ul><ul><li>mainly in urban areas, with facilities like car parking </li></ul></ul><ul><ul><li>targeted to provide a complete destination experience for all segments of society </li></ul></ul><ul><li>Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume </li></ul><ul><li>Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid. </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>
  5. 5. Industry Classification Unorganized Organized
  6. 6. Size of Indian Retail Industry <ul><li>The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country’s GDP . </li></ul><ul><li>Around 8 per cent of the employment. </li></ul>
  7. 7. Growth Rate: Past VS Present <ul><li>Indian retail is expected to grow 25% annually. </li></ul><ul><li>Annual Retail Business 2006 – Rs. 12000 Billion </li></ul><ul><li>Expected in 2010 – Rs. 17080 Billion </li></ul>
  8. 8. 8 Major Retailers <ul><li>India’s top retailers are largely lifestyle, clothing and apparel stores </li></ul><ul><li>This is followed by grocery stores </li></ul><ul><li>Following the past trends and business models in the west retail giants such as Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores </li></ul><ul><li>These Walmart wannabes have the economy of scale to be low –medium cost retailers pocketing narrow margin </li></ul>Leading Retailers Retailers Turnover Cr. Rs (Approx.) RPG Retail 2500 Pantaloon Retail 2300 Reliance Retail 1400 Shoppers Stop 670 Life Style 650 Aditya Birla Retail 400 Pyramid Retail 190 Ebony 150                                               
  9. 9. Retailing formats in India <ul><li>Malls: </li></ul><ul><li>Specialty Stores: </li></ul><ul><li>Discount Stores: </li></ul><ul><li>Department Stores: </li></ul><ul><li>Department Stores: </li></ul><ul><li>Hypermarts/Supermarkets: </li></ul><ul><li>Convenience Stores: </li></ul><ul><li>MBO’s : </li></ul>
  10. 10. Retailing formats in India India’s number of Domestic grocery chains and Early Foreign Entrants
  11. 11. Organization Structure MD/ CEO President VP/ GM (Different Verticals) DGM / Senior Managers Managers / Assistant Managers Officers/ Executive Others
  12. 12. Salary and Qualification Level Qualification Salary Junior Post Graduate, Technical Skills Upto 4L Communication Skills Middle MBA , Experience, Team Player 5L to 20L Good Performer, Relevant Skills Senior MBA , Experience, Consistent 20L and above Performance, Skills , Self motivated Enthusiastic and Strategic
  13. 13. Recent Trends <ul><li>Retailing in India is witnessing a huge revamping exercise as can be seen in the graph </li></ul><ul><li>India is rated the fifth most attractive emerging retail market: a potential goldmine. </li></ul><ul><li>Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion </li></ul><ul><li>As per a report by KPMG the annual growth of department stores is estimated at 24% </li></ul><ul><li>Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. </li></ul>Retail Sales in India
  14. 14. Recent Trends contd. <ul><li>Multiple drivers leading to a consumption boom: </li></ul><ul><ul><li>Favorable demographics </li></ul></ul><ul><ul><li>Growth in income </li></ul></ul><ul><ul><li>Increasing population of women </li></ul></ul><ul><ul><li>Raising aspirations : Value added goods sales </li></ul></ul><ul><li>Food and apparel retailing key drivers of growth </li></ul><ul><li>Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. </li></ul><ul><li>More successful in cities in the south and west of India. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws. </li></ul><ul><li>Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption </li></ul><ul><ul><li>ITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets. </li></ul></ul><ul><ul><li>HLL is using its Project Shakti initiative – leveraging women self-help groups – to explore the rural market. </li></ul></ul><ul><ul><li>Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets. </li></ul></ul><ul><li>IT is a tool that has been used by retailers ranging from to eBay to radically change buying behavior across the globe. </li></ul><ul><li>‘ e-tailing’ slowly making its presence felt. </li></ul><ul><li>Companies using their own web portal or tie-sups with horizontal players like and to offer products on the web. </li></ul>
  15. 15. India vs. World <ul><li>Indian retail is fragmented with over 12 million outlets operating in the country. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market size as compared to India </li></ul><ul><li>India has the highest number of outlets per capita in the world - widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person) </li></ul><ul><li>Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry. Almost 100 times more than the turnover of HLL (India's largest FMCG company). </li></ul><ul><li>Wal-Mart - over 4,800 stores (over 47 million square meters) where as none of India's large format store (Shoppers' Stop, Westside, Lifestyle) can compare. </li></ul><ul><li>The sales per hour of $22 million are incomparable to any retailer in the world. Number of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry employs about three million people. </li></ul><ul><li>One-day sales record at Wal-Mart (11/23/01) $1.25 billion - roughly two third of HLL's annual turnover. </li></ul><ul><li>Developed economies like the U.S. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today). </li></ul><ul><li>60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format </li></ul><ul><li>Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has an average inventory turns ratio of about 18. Many Indian retailers KPMG surveyed have inventory turns levels between 4 and 10. </li></ul><ul><li>Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent. </li></ul>
  16. 16. Future direction: Positives <ul><li>AT Kearney has estimated India’s total retail market at US$ 202.6 billion which is expected to grow at a compounded 30 per cent over the next five years. </li></ul><ul><li>With the organised retail segment growing at the rate of 25-30 per cent per annum, revenues from the sector are expected to triple from the current US$ 7.7 billion to US$ 24 billion by 2010. </li></ul><ul><li>The share of modern retail is likely to grow from its current 8 per cent to 15-20 percent over the next decade </li></ul><ul><li>Over next two years India will see several Indian retail businesses attaining a critical mass as growth in the industry picks up momentum driven by two key factors: </li></ul><ul><ul><li>Availability of quality real estate and mall management practices </li></ul></ul><ul><ul><li>Consumer preference for shopping in new environments </li></ul></ul><ul><li>Wal-Mart : huge plans for India. Moved a senior official from its headquarters in Bentonville, Arkansas, to head its market research and business development functions pertaining to its retail plans in India. </li></ul><ul><li>New York-based high-end fashion retailer Saks Fifth Avenue has tied up with realty major DLF Properties to set up shop in a mall in New Delhi. </li></ul><ul><li>Tommy Hilfiger, retailer of apparels, expects to open one store each in Delhi, Ahmedabad, Lucknow and Bangalore in the next four months. </li></ul>
  17. 17. Future direction: Concerns <ul><li>over-capacity of malls </li></ul><ul><li>Lack of differentiation among the malls that are coming up. One option may be to look at specialization. </li></ul><ul><li>Poor inventory turns and stock availability management techniques. </li></ul><ul><li>Supplier maturity, in terms of adherence to delivery schedules and delivering the quantity ordered, is an issue </li></ul><ul><li>Sales tax laws. VAT has helped alleviate this a bit. </li></ul><ul><li>Increased adoption of IT and shrinkage management will be a critical area. </li></ul><ul><li>Supply chain and customer relations followed by merchandising, facilities management and vendor development are areas which have significant gaps and proactive training is a key imperative for overcoming these. </li></ul>
  18. 18. Recruitment Potential <ul><li>Recruits 1 million Individuals a year . </li></ul><ul><li>20 million of manpower already exists. </li></ul>
  19. 19. Recruitment Research <ul><li>Hiring across Functions </li></ul>Functions Recruitment (%) Sales 46 Marketing 34 Supply Chain 27 IT Support 5 Finance 20 Administration 13 Human Resource 11
  20. 20. Reasons For Changing Job <ul><li>Salary hike 64% </li></ul><ul><li>Better Profile 21% </li></ul><ul><li>Brand name 7% </li></ul><ul><li>Dissatisfaction with Profile 1% </li></ul><ul><li>Dispute with the Seniors 0.5% </li></ul><ul><li>Job location 2.5% </li></ul><ul><li>Cant Say 4% </li></ul>
  21. 21. Attrition Rate 3 Months - 11% 1 Year - 9%
  22. 22. Expected future growth <ul><li>Modern retail in India could be worth Rs.17080 billion by 2010 </li></ul><ul><li>Reasons for the fast Growth of Retail Companies in India: </li></ul><ul><li>. The Growth of Retail Companies in India is facilitated by certain factors like -   </li></ul><ul><li>· existing Indian middle classes with an increased purchasing power </li></ul><ul><li>· rise of upcoming business sectors like the IT and engineering firms </li></ul><ul><li>· change in the taste and attitude of the Indians </li></ul><ul><li>· effect of globalization </li></ul><ul><li>· heavy influx of FDI in the retail sectors in India </li></ul>
  23. 23. Sources <ul><li>AT Kearny </li></ul><ul><li>Business Research </li></ul><ul><li>Forrester Research 2008 </li></ul><ul><li>KPMG-FICCI Report </li></ul><ul><li> </li></ul>