BIG BAZAR IS RETAIL MANAGEMENT.

1. BIG BAZAAR
Presentation by
-RAVI RANJAN
-BBM

2. Agenda
Retailing : An overview
Indian retail
The change factor
FDI in Indian retailing
Why FDI ?
Big Bazaar- Company Profile
- Customer Segment
- Vision and Mission
- Swot analysis
- BCG Matrix
- Porter 5 Forces Model
How FDI ?

3. Retailing: An overview
 Retailing
 World’s largest private industry
US$ 6.6 trillion sales annually
 Fortune 100
 9 Retailers
 Carrefour, Ahold, Home Depot, Kroger,
Metro, Kmart-Sears, Target, Albertsons’
 Indian Retailing
 Largest employer after agriculture - 8%* of
population
 Highest outlet density in world
Around 12 mn outlets
 Still evolving as an industry
Long way to go
An overview

4. Weekly Markets
Village Fairs
Melas
Convenience Stores
Mom and
Pop/Kiranas
Khadi Stores
Cooperatives
Exclusive Brand
Outlets
Hyper/Super Markets
Department Stores
Shopping Malls
Traditional/Pervasiv
e 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

5. Evolution of Indian retail
 Informal retailing Sector
 Typically small retailers.
 Evasion of taxes
 Difficulty in enforcing tax collection
mechanisms
 No monitoring of labor laws
 Formal Retailing Sector
 Typically large retailers
 Greater enforcement of taxation
mechanisms
 High level of labor usage monitoring
Indian retail

6. Categories of Indian retail
 Corporate Houses
 Tatas: Tata Trent
 RPG group: Food World, Health and
Glow, etc
 ITC: Wills Life Style
 Rahejas(ShoppersStop),
Hiranandani(Haiko), DLF(DT cinemas) etc.
 Dedicated brand outlets
 Nike, Reebok, Zodiac etc
 Multi-brand outlets
 Vijay Sales, Viveks etc
 Manufacturers/ Exporters
 Pantaloons, Bata, Weekender
Indian retail

7. Classifying Indian retail
 Modern Format retailers
 Supermarkets (Foodworld)
 Hypermarkets (Big Bazaar)
 Department Stores (S Stop)
 Specialty Chains (Ikea)
 Company Owned Company Operated
 Traditional Format Retailers
 Kiranas: Traditional Mom and Pop Stores
 Kiosks
 Street Markets
 Exclusive /Multiple Brand Outlets
Indian retail

8. Large Indian retailers
 Hypermarket
 Big Bazaar
 Giants
 Shoprite
 Star
 Department store
 Lifestyle
 Pantaloons
 Piramyds
 Shoppers Stop
 Trent
 Entertainment
 Fame Adlabs
 Fun Republic
 Inox
 PVR
Indian
retailers

9. The changing Indian consumer
 Greater per capita income
 Increase in disposable income of middle
class households
 20.9%* growth in real disposable income in
’99-’03.
 Growing high and middle income population
 Growing at a pace of over 10%* per annum
over last decade
 Affordability growth
 Falling interest rates
 Easier consumer credit
 Greater variety and quality at all price
points
Indian
consumer
†From Euromonitor Retail Survey

10. The changing Indian consumer
 The urban consumer
 Getting exposed to international lifestyles
 Inclined to acquiring asset
 More discerning and demanding than ever
 No longer need-based shopping
 Shopping is a family experience
 Changing Mindset
 Increasing tendency to spend
 Post Liberalization children coming of age
100 mn 17-21 year olds*. Tend to spend
freely.
 Greater levels of education
Indian
consumer
*Data from NCAER

11. Anticipated growth
 Market size
 Current market size is roughly US$ 286 bn*
 96% of the 12 Million stores are less than 500
Sq. ft.
 Forecast Growth rate for the retailing
industry is roughly 8.3% for 2003-2008
 Sales from large format stores would rise by
24-49%**
 Formal and modern format retailing would
enjoy rapid growth
Anticipated
growth

12. Industry dynamics
 Low domestic competition
 Because of fragmented nature of industry
 Lack of exposure to global best practices
 Low entry barriers for unorganized retailing
 Moderate entry barriers for organized
retailing
 Wholesale system under-invested leading to
20-40% wastage
 Non level playing field issues
 Wide differences in treatment of small and
large retailers
Industry
dynamics

13. Industry dynamics
 Real Estate Costs
 Supply Chain Inconsistency
 Poor Infrastructure
 Lack of Skilled Manpower
issues

14. Growth factors
 Growth determining factors
 Government Policy
 Infrastructure development
 GDP growth
 Employment generation and job creation
In several new sunrise industries
Implies greater purchasing power
Growth
factors

15. The Indian advantage
 India ranked 1st in the Global A.T Kearney
Retail Development Index
India
Russia
China
Advantage
India

16. THE SIZE OF THE OPPORTUNITY
Products
Total Retail Organised Organised
Rs. Billion Retail Retail as %
Rs. Billion of Total
Food & Grocery 6422 50 1
Textiles & Apparel 980 185 19
Jewelry & Watches 554 30 5
Consumer durables 415 43 10
Pharmaceuticals 364 10 3
Home Solutions 351 32 9
Books, Music & Gifts 115 15 13
Others 1159 111 10
Total 10360 476 5

17. FDI in Indian retailing
 Current Indian FDI Regime
 FDI not permitted in retail trade sector,
except in:
 Private labels
 Hi-Tech items / items requiring
specialized after sales service
 Medical and diagnostic items
 Items sourced from the Indian small
sector (manufactured with technology
provided by the foreign collaborator)
 For 2 year test marketing (simultaneous
commencement of investment in
manufacturing facility required)
FDI in Retail
not permitted

18. FDI in Indian retailing
 Metro Group of Germany
 Cash-and-carry wholesale trading
 Proposal faced strong opposition
 Entities established prior to 1997
 Allowed to continue with their existing
foreign equity components.
 No FDI restrictions in the retail sector pre-
1997
 Foodworld
 51:49 JV between RPG and Dairy Farm
International,
 Leading food retailer in India now
 Mc Donalds
Current FDI

19. QuickTime™ an d a
decompressor
are needed to see this picture.
Hypermarket
The chain of retail
stores of the
Pantaloon Retail
(India) Ltd.
89 outlets in India
Headquarter in
Mumbai
Focusing on Value
of Money

20. COMPANY PROFILE
 Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of
India’s leading business houses with multiple businesses spanning across the
consumption space. While retail forms the core business activity of Future Group,
group subsidiaries are present in consumer finance, capital, insurance, leisure
and entertainment, brand development, retail real estate development, retail
media and logistics.
 Led by its flagship enterprise, Pantaloon Retail, the group operates over 12
million square feet of retail space in 71 cities and towns and 65 rural locations
across India. Headquartered in Mumbai (Bombay), Pantaloon Retail employs
around 30,000 people and is listed on the Indian stock exchanges. The company
follows a multi-format retail strategy that captures almost the entire
consumption basket of Indian customers. In the lifestyle segment, the group
operates Pantaloons, a fashion retail chain and Central, a chain of seamless
malls. In the value segment, its marquee brand, Big Bazaar is a hypermarket
format that combines the look, touch and feel of Indian bazaars with the choice
and convenience of modern retail.

21.  In 2008, Big Bazaar opened its 100th store, marking the fastest ever organic
expansion of a hypermarket. The first set of Big Bazaar stores opened in
2001 in Kolkata, Hyderabad and Bangalore.
 The group’s speciality retail formats include, books and music chain, Depot,
sportswear retailer, Planet Sports, electronics retailer, eZone, home
improvement chain, Home Town and rural retail chain, Aadhaar, among
others. It also operates popular shopping portal.
 Future Capital Holdings, the group’s financial arm provides investment
advisory to assets worth over $1 billion that are being invested in consumer
brands and companies, real estate, hotels and logistics. It also operates a
consumer finance arm with branches in 150 locations.

22. Customer Segment
 Big Bazaar target to upper middle class and
higher customers.
 The large and growing young working
population is a preferred customer segment.
 Big Bazaar specially target working women
and home maker who are the primary
decision maker.

23. Mission & Vision
 Future Group shall deliver Everything,
everywhere, every time for every Indian
Consumer in the most profitable manner.
 We share the vision and belief that our
customers and stakeholders shall be served only
by creating and executing future scenarios in the
consumption space leading to economic
development

24. SWOT ANALYSIS
 STRENGTHS
 EVERY DAY LOW PRICING
 GOOD INFRASTRUCTURE
 CONSUMER PREFERENCES
 DIVERSE MARKET COVERAGE
 AWRENESS ABOUT THE BRAND HIGH AMONG MASSES
 OPPORTUNITIES
 SUB URBAN UNTAPPED MARKET
 “ONE STOP” CONCEPT UNKNOWN YET
 EVOLVING CONSUMER ORIENTATION
 CO BRANDING AND FRANCHISING FOR FASTER
GROWTH

25. SWOT ANALYSIS
 WEAKNESS
 LOW PERCEPTION AMONG CONSUMERS
 LESS AVAILABILITY OF STORES
 SUPPLY CHAIN BOTTLENECKS-(FRAGMENTED
MARKETS)
 THREATS
 NEW ENTRANTS AND FOREIGN PLAYERS
 UNORGANISED RETAIL MARKET

26. 5 FORCES PORTER MODEL
 RIVALRY AMONG COMPETITORS
 RELIANCE,MORE,VISHAL,NEXT,SPENCERS
 NEW ENTRANTS
 WALMART,CARREFOUR,METRO,IKEA
 FOREIGN PLAYERS ALLOWED TO SOME EXTENT
 BARGAINING POWER OF SUPPLIERS
 SUPPLIERS HAVE A HUGE UNORGANISED SECTOR
TO CATER TO

27. Contd…
 BARGAINING POWER OF CONSUMERS
 PRICE SENSITIVE CONSUMERS
 MORE AVAILABLE CHOICES
 THREAT OF SUBSITUTES
 UNORGANIZED RETAIL

28. BCG MATRIX
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29. MARKETING
‘7 P’s ANALYSIS

30. PRICING
§Value Pricing (EDLP)
§ Promotional Pricing
• Low Interest Pricing
• Psychological Pricing
• Special Event Pricing (Republic Day)
§ Differentiated Pricing
• Time Pricing
§ Bundling

31. PROMOTION
•“SAAL KE SABSE SASTE 3 DIN”
• FUTURE CARD (Discount Upto 3%)
• SHAKTI CARD
• JUNK SWAP OFFER
• BRAND AMBASSADOR: M.S. DHONI
• ADVERTISMENT (Print Ads, T.V., Radio)
• POINT OF PURCHASE PROMOTION
• GIFT TO EVEY 100th CUSTOMER (Seasonal)
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32. PEOPLE
• People Are The Customers Which Are The
Biggest Asset Of A Company.
• Well Trained Staff.
• Appearance.
• Presently Around 10000 Workers Are Working
And Around 500 Workers Are Recruited Every
Month.
• High Security For Safety Of Customers.

33. Problems ahead
Reduction in consumer spending
Slow construction of malls
Difficulty in raising working
capital
High rentals
Lowering margins
New emerging competitors

34. THANK YOU