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European businessgroup india and retail landscape 4th feb 10v1 5
- 1. Retail Evolution, Trends & Business Opportunities in India Mr. Rajan Bharti Mittal Vice Chairman and Managing Director Bharti Enterprises Limited.
- 2. India: An Emerging Economic Power Evaluating New Business Opportunities Indian Retail: Potential and trends The Bharti Story
- 7. India: An Emerging Economic Power Evaluating New Business Opportunities Indian Retail: Potential and trends The Bharti Story
- 8. Founded in 1976 with an initial capital of $ 1000. Started with small scale manufacturing units Started manufacturing telephones in technical collaboration with Siemens AG Tie-up with Takacom corp., Japan for answering machines in 1986, LG, South Korea for cordless phones & Systema for telephone terminals in 1988 1985 Import of portable power generators from Japan for distribution in India Formed a Consortium with Vivendi and others to bid for Cellular Licences 1976 Bharti Airtel – First mobile service operator in Delhi Best in class Global partners since beginning - Singapore Telecom, E M Warburg Pincus, USA, British Telecom, UK, Telia, Sweden, New York Life International, Asian Infrastructure Fund(AIF) 1995 1992 1982 Our Beginnings
- 9. Bharti Airtel India & SAARC Region Telecom Seychelles Seychelles Islands Jersey Airtel Channel Islands Comviva Technologies Telecom software Bharti AXA Life Ins Life Insurance Bharti Realty Real Estate Indus Towers Passive Infra Sharing Bharti Teletech Comm. & Media Devices Bharti Retail Retail Guernsey Airtel Channel Islands Bharti Wal-Mart Wholesale Cash & Carry Bharti AXA Gen Ins General Insurance Bharti Infratel Passive Infra Bharti AXA Investment Managers Asset Management FieldFresh Foods Agri Exports Centum Learning Ltd Training & Dev TELECOM SERVICES FINANCIAL SERVICES RETAIL / WHOLESALE EMERGING BUSINESSES Bharti Foundation CSR activities Our Businesses
- 10. TELECOM SERVICES FINANCIAL SERVICES RETAIL / WHOLESALE EMERGING BUSINESSES Our Partners
- 12. India: An Emerging Economic Power Evaluating New Business Opportunities Indian Retail: Potential and trends The Bharti Story
- 15. India: An Emerging Economic Power Evaluating New Business Opportunities Indian Retail: Potential and trends The Bharti Story
- 16. Retail Sector poised for phenomenal growth Source: India Shopping Trends, 2008 - Technopak ORGANISED RETAIL EXPECTED TO GROW 35-40% CAGR The Indian Retail Sector, currently the Fifth largest in the world, is poised for phenomenal growth in the coming years Size & Position in the current Scenario Current Size & Future growth of Organized Retail in India
- 21. Thank You
Editor's Notes
- Fiscal balance Driven by stimulus packages fiscal deficit currently at 6.8% of GDP; to be brought down to 3% over 5 years; A balancing act by the Finance Minister-budget 10-11 Tax Reforms Indirect tax: GST roll out delayed to FY11 To overcome the dual tax regime; simplified structure; creating a unified market. Direct tax: Proposed Direct Tax code aiming at substantial increase in income tax limit; sharp rise in disposable income. Disinvestment Plans to dilute 10% in all profit making PSUs A source of spending in social infrastructure Social Programs Outlay for NREGS (National Rural Employee Guarantee Scheme) which guarantees 100 days of wages and work for one member in every rural family, has gone up by 30% to Rs. 39,100 Cr (USD 8,555 million) from Rs. 30,000 Cr (USD 6,564 million) in 2008-09. With the aim of creating 12 million jobs every year, the government plans to recharge the nation’s employment exchanges to bring employers and job-seekers on a seamless online platform. The Union Governments expenditure on primary education has gone up by 12% from Rs. 26,026 Cr (USD 5,695 million) last year to Rs. 29,099 Cr (USD 6,367 million).
- Telecom Bharti Airtel - largest private integrated telecom company in India. Over 102 Mn customers Mobile services in Seychelles, Channel Islands, Sri Lanka Bharti Infratel – Tower company for passive infrastructure sharing Financial Services Pan India Presence Over 203 Branches and ~ 30K advisors for the LI Business Over 66 Branches for the GI Business. Average AUM of ~ Rs. 2.5 Bn. Emerging Businesses Bharti Teletech - Over 580 distributors, 25,500 dealers strong network and 29 warehouse spanning across the 3600 towns in India Comviva - Deployed products and solutions in over 70 countries for over 100 customers. FieldFresh Foods - offers fresh and processed fruits & vegetables in domestic and international markets like Europe, USA & Middle East
- Achieved 11% growth in 2008-09 over the previous year. Foreign investment up to 100% is now allowed without GOI approval in almost all sectors under the automatic approval route except those subject to sectoral caps/policy.
- Infrastructure Roads and bridges, telecom, ports, airports, storage, and gas distribution are projected at upward contribution than 30%, with over 60% in ports, airports and telecom. The budget 2009-10 stepped up allocation by 45% to Bharat Nirman, the United Progressive Alliance government’s flagship plan to build rural infrastructure. Outlays for rural housing, roads, electrification and irrigation have been raised by 63%, 57%, 27% and 75%, respectively, over the allocations made in 2008-09. The budget 2009-10 proposed to spend Rs 12,887 Cr to build urban infrastructure, an increase of 87% over the previous year. There is a 23% increase in allocation for the National Highways Development programme and a Rs. 5,000 Cr increase in the spending on railway Education 100% FDI is allowed through the automatic route, no rules or regulations for foreign universities to be recognized under the UGC (University Grants Commission). India will see a shortfall of 4 million seats in higher education by 2015 and 7 million by 2020. Higher number of graduates in Humanities and Arts, while industry needs much higher numbers of Engineering, Medical, Finance, and Service professionals. Emerging segments – Vocational Training, Online Education, and Educational Material Health Care Growth of 9.3% between 2000-2009, comparable to the sectoral growth rate of other emerging economies such as China, Brazil and Mexico. Growth mainly driven by healthcare facilities, medical diagnostic and path-labs and the medical insurance sector.
- Grown from USD 2 Bn in 2002 to USD 37 Bn today in total of USD 350 Bn Retail will be a critical driver of the economy – employment, contribution to GDP Improved tax realization for the government - Significant revenue loss happening under the present fragmented unorganised retail set up. Changes in the Retail strategy over the past years – moving beyond infancy Re-Sizing and Relocation - With a drop in rentals many retailers renegotiating rentals and relocating stores which are not economically viable. New Formats - Experiment with new formats to attract consumers. Reaching to new customers - Modern retail currently serves 7%-8% of the total population; Focus is shifting from upper income consumers to middle class, urban poor and rural markets. Spreading to new geographies - Focus shifting from metros and mini metros into smaller towns and rural areas. Restructuring of Operations - Restructuring of operations by combining the operations of various formats to reduce overheads and achieve economies of scale.
- Immense diversity – 16 official languages, 1650 dialects, Culture, food habits, dressing styles vary by community / region Absence of Infrastructure & good retail Space Inadequate infrastructure - only 0.05 km of constructed road per vehicle (Source – India – Highway Data, worldbank.org - 58.86 Mn Motor Vehicles vs. 3.3 Mn Km of Roads) Inadequate real estate in terms of availability and affordability; lack of proper city planning models; delays in project delivery & quality of development. Rentals are globally are @ 3-5 % of sales revenue, in India @ 10-15 % Workforce Management Exponential growth requires more talent than is currently available; high attrition rates in the industry IT Infrastructure Low automation levels in supply chain and point of sale systems; no real time link between suppliers-warehouses-retail stores Fragmentation of supply chain Multi – layered tax regimes 2 % CST on intra-state sales Companies have to maintain small warehouses in every state to avoid paying CST Decentralized procurement and storage high inventory costs, increased working capital, other overheads Poor ‘availability’ and ‘usage’ of warehouses Non integrated cold chain supply - Negligible facilities of multiple temperature storage chains & Shortage of refrigerated trucks Legal – more than 21 licenses to open a single store, takes 1-2 months time to obtain. Rigid building laws makes acquisition and modification of retail space difficult