2. Retail – the largest private industry in world economy
Sales (USD Trillion) 1999
Retail 6.6
Financial services 5.1
Construction / Engineering 3.2
Packaged goods 2
Chenmicals 1.4
Energy 1.2
Electronics 1.1
Automotive 1
telecom 0.8
Pharmaceuticals; diagnostice 0.3
Source : Euromonitor, European Chemical Industry Council: Automotive News; Wall Street Journal; Chemical market
Reporter; IDATE; Global Vantage
3. Retailing – the largest private industry in the world
• Over 50 of the Fortune 500 companies are retail
companies.
• 25 of the Asian top 200 companies are retail
companies.
• The world’s largest company is a retail company.
(Wal-Mart – last valued at Rs 1,091,250 crore)
4. Current Retail scenario in India
• Retail industry accounts for 35% of our GDP
• Estimated industry size - USD 205 bn (INR 230,000
cr) in 2004.
• Highest number of outlets per capita - 12 million
outlets
• Lowest per capita retail space - 2 sft per person as
compared to 16 sft per person in USA
• Only 4% of the country’s outlets are larger than 500
sft
India’s retail setup is therefore crowded with small outlets, largely
disorganized and primarily owner managed
Source: KSA Technopak
5. Organized Retail
Organized Retail arrived in India in the 90’s
• 1999 Rs 550 Crore
• 2002 Rs 4,000 Crore
• 2004 Rs 28,000 Crore
• 2005 Rs 35,000 Crore
7. Examples of Growth in Emerging Markets
Years taken for organized retail to grow from <5% to over 20%
INDIA IS STILL AT 2.5%
Source : MG1, team analysis
8. Forecast 2010
• Organized retail is expected to grow at 30% - 35% p.a. to
become USD 24 bn (INR 100,000 cr) by 2010
• Organized Retail Penetration (ORP) will increase from less than
3% in 2005 to 8% by 2010
• FDI in real estate will accelerate pace of development of retail
infrastructure
• Investments in organized retailing are estimated to touch USD
4,000 Mn (INR 20,000 cr) by end of 2010
Source: KSA Technopak, HSBC Report
10. Growth Drivers - Young & rapidly evolving
consumers
India is one of the most
youthful countries in the
world with 53% of the
population less than 25
yrs of age
Within a decade the number of people in age group of 20 – 49 would
increase 30% from 395mn in 2000 to 510 mn in 2010
11. Growth Drivers – Middle Class Population
Currently estimated at 92 Mn the middle class (family income
between INR 200,000 – 10,00,000 p.a.) is expected to be around
153 Mn by 2010
12. Growth Drivers – Retail Infrastructure
• India will have 225 malls by 2007 spread over 50 cities
• Relaxation in FDI in Real Estate to give further impetus
• Real Estate Mutual Funds ( REMFs) & Real Estate Investment
Trusts ( REITs) comes to India
14. Retail – Largest Employer in the World
Increased employment opportunities
- The annual employee turnover of
Wal-Mart is more than the entire
workforce of General Motors
- 18% of the US workforce is
employed in retail
15. Socioeconomic Impact of McDonalds on the
US Job Market
McDonalds captures 1 out of every 6 restaurant visits in the US market
• Employs more than 5,00,000 people
• Largest employer of High School Students
• 12.5 % of the US workforce has worked for McDonalds
• 1 out of 15 American got his/her 1st Job at McDonalds
• Nations largest Job Training Organisation -Bigger than
the US Army – teaching the future US workforce “ work
routines,job discipline and organisational teamwork
16. Retail – Opportunities for Entrepreneurs
- World of Franchising
- Specialized retail formats
Bangles, Candy, Kite, - opportunities are
immense !!
