This document provides an analysis of the retail sector in India by CRISIL. It discusses the organized and unorganized retail market in India, key retail formats and channels, statistics on market share by product category, value and lifestyle retail formats, major retail players, and prospects for growth in various retail sub-sectors such as food and grocery, apparel, consumer durables, jewelry, and online retail. It highlights that food and grocery accounts for the largest share of overall retail but has the lowest penetration of organized retail.

1. Presenting on:
RETAIL SECTOR – CRISIL ANALYSIS
Under the mentorship of:
Prof. iftiquar Mistry
Submitted by:
Shweta kittur
Sneha Shrivastava
Nikhil Revdekar
Shrund kalse
Pranay Ragabhagt

2. • Retailing:
The activities involved in the selling of goods to ultimate consumers for
personal or household consumption.
• Unorganized Retailing:
Unorganized retailing refers to small retailers selling goods under
the traditional formats like counter stores, kirana shops, street
markets, kiosks and vendors, where the ownership and
management rest with one person only.
• Organized Retailing:
Organized retail is typically chain stores, all owned or franchised by
a central entity.

3. • Retail Distribution Channel:

4. • Levels of retailing:

5. • Statistics on overall retail market share:
Sales
1%
3%
Food and grocery
Apparel
4%
4%
Consumer Durables
Mobile and I.T
Home Décor and
furnishing
Beauty, personal and
health care
Pharmacy
5%
6%
12%
70%
jewellery, watches,
eyecare and others
footwear
Books and Music

6. • Value retailing and types of value Retailing:
Value retailing is a concept targeted mainly towards the masses comprising
largely of middle-income households.
• Types of value Retailing:
- Convince Stores
- Supermarket stores
- Hypermarkets
• Life style retailing:
- Department Stores
- Specialty Stores

7. • Other Formats:
- Cash and carry
- Luxury Retailing
- airport retailing
- Online retailing
- Television home shopping
- vending machine retailing
- Kiosks

8. • Rising Income – Reason for retail growth:
- Rising income levels to drive consumption
-Desire for better standard of living to drive non-food consumption growth
• Demographic changes:
-Increasing role of working women in consumer spends
- Employed youth to influence consumer spending
-Nuclearisation of families to drive consumption
-Growing urban population - Key to future spending
-Shift in the preference for branded products

9. Players profile:
• Footwear Retailing:
-Bata
- Liberty
- Khadim
- Cotton County
• Home Decor and furniture retailing:
- Bombay Dyeing
- Style Spa
- Welspun Welhome
• Pharmacies:
- apollo
- Medplus
- Religare wellness

10. • Consumer Durables:
- Croma
- e-Zone
- NEXT
• Retail Stores:
- Pantaloon retails
- Shopper Stop
- Reliance retail

11. • FDI in multi brand retail: Positive only in the long
term:
CRISIL Research believes that these amendments to the FDI policy are
positive for the organized retail sector in the long term. However,
uncertainty in both, the global and domestic economies, will delay the
entry of foreign players into the Indian retail sector in the short term.
• Amendments to the policy are:
-Mandatory investment in back-end infrastructure only for first tranche of
investment
-Definition of MSMEs amended to include companies with investment up to
$2 million
-Foreign retailers can now operate in cities with population of less than 1
million

12. • Bulletins:
 Clothing and textiles, consumer durables constitute large share of
organized retail market
 Private labels in FCTVs can help improve net margins
 Private labels to help boost margins in bed sheets and shirts
• Hypermarkets - A better opportunity as compared to
department stores
- Significant growth in organized retail sector in last few years
- Hypermarkets and department stores constitute significant share of total
organized retail market in India
- Hypermarket format v/s department store format
- Department stores popular until entry of hypermarkets

13. - ‘Value for money' proposition works well for growth of
hypermarkets
- Department stores score over hypermarkets in terms of profitability
- Higher share of apparels in department stores ensures higher gross
margins
- Hypermarket format more lucrative, despite low returns
- Offering lifestyle proposition can prove to be costly for department stores

14. Hypermarket retailer format generate high returns
than C&C format
• A hypermarket caters to retail buyers while a C&C
caters to wholesale mode
• C & C- High-volume, low-margin business
• Higher pressure on C & C store to generate higher
revenue
• Hypermarket retailers generate higher ROCE

15. Gross margins across
business models
Capital cost in base year:
Rs per sq ft

16. Jewellery Retailing
• Dominated by family jewellers
• Tanishq, Gitanjali and Reliance ventured into
the organised jewellery retail space
• As of 2009-10, market size is estimated at Rs
973 billion
• Organised retailing penetration (ORP) in
jewellery is estimated at 10 per cent
• Gold jewellery constitutes the largest
component of retailer revenues
• Product mix and lease rentals key determinants
of returns

18. Footwear
• Overall market is valued at Rs 500 billion,
with organized retail penetration (ORP)
estimated at 15 per cent
• Entry of footwear exporters in the domestic
market has supported the organized footwear
retail growth
• Suppliers to the leather footwear industry are
highly fragmented
• Most organized footwear retailers are
backward integrated till the manufacturing
stage

19. Key success factors in footwear
retailing
&
Value chain - Leather footwear

20. Food & Beverage Joint
• Returns generated by Quick Service
Restaurants (QSRs) are higher than that
generated by coffee chains
• Higher transactions by QSRs help them earn
better returns vis-a-vis coffee chains
• Comparison of QSRs and coffee chains below

21. Beauty & Wellness (B&W) Services
• Growing awareness about health
and beauty, supported by rising
income levels, has propelled the
growth of gym, salon and spa chains
over the last few years in India

22. Share of chains to corresponding industry revenues &
Growth in gym, salon and spa chains

23. Online Retail
• The online retail market in India will triple in
size by 2014-15, from Rs 32 billion at present.
• Online retail in India will be dominated by
product categories that are brand driven, have
a low-ticket size and are easily transportable
such as electronics, followed by lifestyle and
books

24. Non store retailing formats

25. Food &Grocery
• While food and grocery (F&G) accounts for twothirds of overall retail, the share of organised
retail is the lowest among all retail verticals,
signifying underlying opportunity.
• The food and grocery (F&G) vertical, a Rs 16
trillion industry, comprises more than twothirds of the overall Indian retail sector.
• the organised retail market in F&G is only Rs
390 billion, and the organised retail penetration
(ORP) of this vertical is the lowest among all
retail sector verticals at 2.4 per cent