178021 633758384389

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178021 633758384389

  1. 1. 1 <ul><li>Retailing </li></ul><ul><ul><li>World’s largest private industry </li></ul></ul><ul><ul><ul><li>US$ 6.6 trillion sales annually </li></ul></ul></ul><ul><li>Indian retailing </li></ul><ul><ul><li>Largest employer after agriculture - 8%* of population </li></ul></ul><ul><ul><li>Highest outlet density in world </li></ul></ul><ul><ul><ul><li>Around 12 mn outlets </li></ul></ul></ul><ul><ul><li>Still evolving as an industry </li></ul></ul><ul><ul><ul><li>Long way to go </li></ul></ul></ul>An overview Retailing: An overview
  2. 2. <ul><li>Wal-Mart </li></ul><ul><ul><li>Topmost global Fortune 500 company(3 Consecutive Years) </li></ul></ul><ul><ul><li>Annual Sales of over US$ 250 bn </li></ul></ul><ul><ul><li>India’s two largest retail player turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop) </li></ul></ul><ul><li>Fortune 100 </li></ul><ul><ul><li>9 Retailers </li></ul></ul><ul><ul><li>Carrefour, Ahold, Home Depot, Kroger, Metro, Kmart-Sears, Target, Albertsons’ </li></ul></ul>An overview Retailing: An overview
  3. 3. 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 Traditional/Pervasive Reach Government Supported Historic/Rural Reach Modern Formats/ International Evolution of Indian retail Source of Entertainment Neighborhood Stores/Convenience Availability/ Low Costs / Distribution Shopping Experience/Efficiency
  4. 4. <ul><li>Informal retailing Sector </li></ul><ul><ul><li>Typically small retailers. </li></ul></ul><ul><ul><li>Evasion of taxes </li></ul></ul><ul><ul><ul><li>Difficulty in enforcing tax collection mechanisms </li></ul></ul></ul><ul><ul><li>No monitoring of labor laws </li></ul></ul><ul><li>Formal Retailing Sector </li></ul><ul><ul><li>Typically large retailers </li></ul></ul><ul><ul><li>Greater enforcement of taxation mechanisms </li></ul></ul><ul><ul><li>High level of labor usage monitoring </li></ul></ul>Indian retail Evolution of Indian retail
  5. 5. <ul><li>Corporate Houses </li></ul><ul><ul><ul><li>Tatas: Tata Trent </li></ul></ul></ul><ul><ul><ul><li>RPG group: Food World, Health and Glow, etc </li></ul></ul></ul><ul><ul><ul><li>ITC: Wills Life Style </li></ul></ul></ul><ul><ul><ul><li>Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc. </li></ul></ul></ul><ul><li>Dedicated brand outlets </li></ul><ul><ul><li>Nike, Reebok, Zodiac etc </li></ul></ul><ul><li>Multi-brand outlets </li></ul><ul><ul><li>Vijay Sales, Viveks etc </li></ul></ul><ul><li>Manufacturers/ Exporters </li></ul><ul><ul><ul><li>Pantaloons, Bata, Weekender </li></ul></ul></ul>Indian retail Categories of Indian retail
  6. 6. <ul><li>Modern Format retailers </li></ul><ul><ul><li>Supermarkets (Foodworld) </li></ul></ul><ul><ul><li>Hypermarkets (Big Bazaar) </li></ul></ul><ul><ul><li>Department Stores (S Stop) </li></ul></ul><ul><ul><li>Specialty Chains (Ikea) </li></ul></ul><ul><ul><li>Company Owned Company Operated </li></ul></ul><ul><li>Traditional Format Retailers </li></ul><ul><ul><li>Kiranas: Traditional Mom and Pop Stores </li></ul></ul><ul><ul><li>Kiosks </li></ul></ul><ul><ul><li>Street Markets </li></ul></ul><ul><ul><li>Exclusive /Multiple Brand Outlets </li></ul></ul>Indian retail Classifying Indian retail
  7. 7. <ul><li>Hypermarket </li></ul><ul><ul><li>Big Bazaar </li></ul></ul><ul><ul><li>Giants </li></ul></ul><ul><ul><li>Shoprite </li></ul></ul><ul><ul><li>Star </li></ul></ul><ul><li>Department store </li></ul><ul><ul><li>Lifestyle </li></ul></ul><ul><ul><li>Pantaloons </li></ul></ul><ul><ul><li>Piramyds </li></ul></ul><ul><ul><li>Shoppers Stop </li></ul></ul><ul><ul><li>Trent </li></ul></ul><ul><li>Entertainment </li></ul><ul><ul><li>Fame Adlabs </li></ul></ul><ul><ul><li>Fun Republic </li></ul></ul><ul><ul><li>Inox </li></ul></ul><ul><ul><li>PVR </li></ul></ul>Indian retailers Large Indian retailers
  8. 8. <ul><li>Greater per capita income </li></ul><ul><ul><li>Increase in disposable income of middle class households </li></ul></ul><ul><ul><li>20.9%* growth in real disposable income in ’99-’03. </li></ul></ul><ul><li>Growing high and middle income population </li></ul><ul><ul><li>Growing at a pace of over 10%* per annum over last decade </li></ul></ul><ul><li>Affordability growth </li></ul><ul><ul><li>Falling interest rates </li></ul></ul><ul><ul><li>Easier consumer credit </li></ul></ul><ul><ul><li>Greater variety and quality at all price points </li></ul></ul>Indian consumer The changing Indian consumer
  9. 9. <ul><li>The urban consumer </li></ul><ul><ul><li>Getting exposed to international lifestyles </li></ul></ul><ul><ul><li>Inclined to acquiring asset </li></ul></ul><ul><ul><li>More discerning and demanding than ever </li></ul></ul><ul><li>No longer need-based shopping </li></ul><ul><ul><li>Shopping is a family experience </li></ul></ul><ul><li>Changing Mindset </li></ul><ul><ul><li>Increasing tendency to spend </li></ul></ul><ul><ul><li>Post Liberalization children coming of age </li></ul></ul><ul><ul><ul><li>100 mn 17-21 year olds*. Tend to spend freely. </li></ul></ul></ul><ul><li>Greater levels of education </li></ul>Indian consumer The changing Indian consumer
  10. 10. <ul><li>Market size </li></ul><ul><ul><li>Current market size is roughly US$ 286 bn* </li></ul></ul><ul><ul><li>96% of the 12 Million stores are less than 500 Sq. ft. </li></ul></ul><ul><ul><li>Forecast Growth rate for the retailing industry is roughly 8.3% for 2003-2008 </li></ul></ul><ul><ul><li>Sales from large format stores would rise by 24-49%** </li></ul></ul><ul><ul><li>Formal and modern format retailing would enjoy rapid growth </li></ul></ul>Anticipated growth Anticipated growth
  11. 11. <ul><li>Growth determining factors </li></ul><ul><ul><li>Government Policy </li></ul></ul><ul><ul><li>Infrastructure development </li></ul></ul><ul><ul><li>GDP growth </li></ul></ul><ul><ul><li>Employment generation and job creation </li></ul></ul><ul><ul><ul><li>In several new sunrise industries </li></ul></ul></ul><ul><ul><ul><li>Implies greater purchasing power </li></ul></ul></ul>Growth factors Growth factors
  12. 12. <ul><li>India ranked 5th in the Global A.T Kearney Retail Development Index </li></ul><ul><ul><li>Second only to China in Asia </li></ul></ul><ul><ul><li>Least saturated of all global markets studied </li></ul></ul><ul><ul><li>The least competitive of all global markets studied </li></ul></ul><ul><ul><ul><li>Implies lower barriers of entry for global players </li></ul></ul></ul><ul><ul><ul><li>Considering tremendous market size, excellent potential for foreign players </li></ul></ul></ul><ul><li>India ranked 3 rd in the Global A T Kearney FDI Confidence Index in 2004 </li></ul><ul><ul><li>Improved from Rank 6 in Year 2003 </li></ul></ul>Advantage India The Indian advantage
  13. 13. Employment in retailing is increasing

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