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Situation Analysis Of Retail Industry In India


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Situation Analysis Of Retail Industry In India

  1. 1. Agenda: Situation AnalysisRetailing: IntroductionEvolution of Retail IndustryIndian Retail Market Analysis & SummarySWOT AnalysisChallengesCompetitionKey To Success 2
  2. 2. Retailing: Introduction • Retail has played a major role world over in increasing productivity across a wide range of consumer goods and services • Retailing is one of the important sectors of an economy, both in terms of contribution to GDP and share in the total employment.INTRODUCTION • India is the fifth largest retail market in the world • The Indian retailing sector is at an inflection point. It is set to enter a new growth trajectory owing to rising household consumption and the entry of corporate entities and global retailers.* 3
  3. 3. Evolution of Retail Industry Traditionally retailing in India can be traced to - • Weekly Markets Village Fairs & Melas. • The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumersAn overview • Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission • The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers. • Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume 4
  4. 4. Evolution of Indian retail Modern Formats/ Historic/Rural Traditional/Pervasiv Government International Reach e Reach Supported Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Khadi & Village Stores Cooperatives Convenience Stores /Kiranas Weekly Markets Village Fairs Melas Availability/ Low Source of Neighborhood Costs / Shopping Entertainment Stores/Convenience Distribution Experience/Efficiency* 5
  5. 5. Top Player Of Retail- Worldwide Rank Retailer Home Country 1 Wal-Mart Stores, Inc. U.S.A.Top retailer 2 Home Depot, Inc. U.S.A 3 The Kroger Co. U.S.A. 4.Costco U.S.A. 5 Target U.S.A. 6
  6. 6. Major player of Indian Retail • Shoppers Stop •Westside (Trent) •Pantaloon (Big Bazaar) •Lifestyle •RPG Retail (Food world, Music world) •Crossword Retailers Of •Wills Lifestyle India •Globus •Piramals ( Pyramid & Crosswords) •Ebony Retail Holdings Ltd.* 7
  8. 8. Indian Retail Market Analysis & Summary  Retailing in India can be classified under two broad headings: Organized and Unorganized.  Currently, the size of Indian retail sector is US$ 410billion with unorganized retail.  Organised retail trade accounts for merely 4% Indian retail of the total retail trade and is expected to grow at the rate of 30% to 40%.  The sector can be broadly divided into two segments: Value retailing, which is typically a low margin-high volume business (primarily food and groceries) and Lifestyle retailing, a high margin-low volume business (primarily apparel, footwear, etc). 9
  9. 9. Organised Retail Market Organised retail pie Segment % contribution Textile and apparel 38.9 Food and beverages 10.5 Consumer durables 9.0Segmentation Home solutions 6.7 Jwellery and watches 6.3 Books, music and gifts 3.2 Pharma 2.1 Others 23.3 10
  10. 10. TARGET MARKET A segment of consumers that is most likely to purchase the products and services offered by a particular retailer When defining the target market, retail organizations generally identifyMARKET demographic, socioeconomic, andTARGET psychographic characteristics, and then use that data to focus and guide their marketing, advertising, promotion, and merchandising efforts. 11
  11. 11. MARKET TRENDS The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shoppingMARKET centers, multi-storied malls and hugeTRENDS complexes offer shopping, entertainment and food all under one roof. 12
  12. 12. MARKET DEMOGRAPHICSCONTEXT TYPE OF INFORMATIONSocio-demographic Population composition and distribution Households and family formation Health and health services Learning and educational services Housing conditions Peace and order statusEconomic activity National accounts Labor force participation Wages Household income and expenditure patterns PovertySocio-cultural and political Political structure Political participation Relevant laws, statutes, policies Predominant social structure Gender roles in the household Time use *Data from NCAER Decision- making patterns in the household 13
  13. 13. MARKET GROWTH •It is estimated that the retailing industry is likely to grow up to $427 billion by 2010 and US$637 billion by 2015 and that organized retail could account up to a share as high as 20%-22% of this market. •Organized retail will grow at a significant CAGR ofMARKET around 50% till 2011 mainly due to the investments ofGROWTH more than $30 billion budgeted by big and small players in the organized retail sector over coming five to seven years. Organized retail sector has witnessed a CAGR of around 35% over the past five years and currently accounts for about 1.5% of the country’s GDP. 14
  15. 15. SWOT Analysis • Products are cheaper than the market price. • Technology intensive industry • Variety in products • Demographic favorStrength • Rising disposable income • Urbanization • Shopping convenience • Low labor cost of skilled ones • Plastic card revolution 16
  16. 16. SWOT Analysis • Has not yet trapped the whole market. • Facing problems due to political environment • Less conversion level • Customer loyaltyWeakness • Policy related issues • Limited consumer insight • Inadequate human resources • Taxation hurdle • Underdeveloped supply chain • Lack of adequate facilities 17
  17. 17. SWOT Analysis • Kids and teens retailing segment • Percolating down • Rural retailing • Sectors for high growth potentialOPPORUNITY • Locational advantage • Falling real estate cost • E-retailing • Franchising 18
  18. 18. SWOT Analysis • Shopping culture • Political issues • Social issues • Lack of differentiation among the malls THREATS that are coming • Poor inventory turns and stock availability measures* 19
  19. 19. CHALLENGES IN RETAIL SECTOR •The organized retail industry in India is facing… competition from the unorganized sector. •Intensifying competition is exerting downward pressure on prices. • • The industry is facing a severe shortage of CHALLENGES talented professionals, especially at the middle- management level. •Supply chain management. •Lack of adequate infrastructure. •Differential tax rates.* 20
  20. 20. KEY TO SUCCESS  Price  Customer Delight  Schemes Success Points  Availability of all types/ brands  Quality of products* 21
  21. 21. THANK YOUPresented By KUMAR RAMA SHANKAR HRD-09-6134 22