1. Case Study
Music World: Redefining Indian Music Retailing

2. Music World
 Part of the Rama Prasad Goenka (RPG) Group, a
Rs.65 billion company (2000-01)
 Started in 1820‟s by Ram Dutt Goenka & British East
India Company
 Divisions:
 Power
 Tyre
 IT & Communication
 Life Sciences
 Retail
 Financial Services
 Chemicals & Specialty

3. Music World
 Old formats:
 Retailers & distributors (Company had to shell out money for high
margins)
 Problem of Piracy of cassettes & Cd‟s
 Company could not reach its full growth potential
 1990-2000
 CAGR 25%
 Partnerships with international companies
 2001
 Introduction of the organized retailing
 58,573 employees
 Rs 66 billion turnover
 Rs 68 billion asset base

4. RPG Group
 Spencer‟s was set up in 1865 as a small store
 By 1940- 50 large stores spread across the country
 1947- unable to foresee demand for imported goods &
hence , started declining
 1970- sold to an entrepreneur
 1989- RPG bought Spencer‟s
 RPG‟s retail business was run by Spencer‟s

5. Emergence of Music World
 Spencer‟s undervalued real estate, distribution
network, profitable travel agency
 Many loss making divisions shut down
 1991- Spencer‟s store was redesigned and modernized
 Three formats of the store
 “Food World”
 “Health & Glow”
 “Music World”

6. June 2001
• 61 stores of Food World, 13 Music
World outlets & 18 Health and Glow
Shops
Spencer‟s • Average earning – Rs.350 million per
month
Food
World RPG GAURDIAN PVT LTD
(Alliance between Spencer and
Health Dairy Farm International)
& Glow
JV between Spencer (57%) &
Music Saregama (43%)
World
Hyper
Mart October 2001- “MUSIC
WORLD” emerged as distinct
identity

7. Why Retail Sector?
 CII estimated that the Indian Retailing Industry will grow
at the size of $180 billion.
 By 2010, it will develop to a $300 billion industry
 Less competition
 GCIL turned into a sick unit

8. Story of Saregama
 1901- GCE started (British East India Company)
 1931- Merged with Columbia Gramophone Company to
form Electrical & Musical Industries
 GCIL marketed its labels through HMV & Columbia
 HMV lost its monopoly
 1990- RPG bought EMI stake in GCIL
 Diversified into Radio Broadcasting & Cinemas
 1999- www.saregama.com was launched
 2000- www.humaracd.com
 2001- Entered global market
 Sales increased drastically

9. Promotion & Marketing
 Celebrity visits – Hrithik Roshan & Shaan
 Discounts on products during festivities
 Promotion of local artists – “The MusicWorld unplugged”
 Tie up with Channel [V], hungama.com, Citibank etc
 Neon signage
 „Santana Contest‟
 Website launch www.musicworld4u.com
 www.humaracd.com
 Mini studio in Pune
 Tie up with e-commerce websites

10. SWOT analysis

11. SWOT analysis

12. Our Take
 Soundtracks of Hindi films were flopping
 Piracy
 Before music world, only 50 distributors had control over
the market
 Supplies not available easily
 Customer convenience & satisfaction
 Tie-ups with popular departmental stores helped in
boosting the sales of Music World

13. Present Situation
 Music industry has been
growing at 3% over last 3
years
 Assets worth Rs. 235 crores
 Present CAGR of Music World
is 30%
 Over 79 outlets across India
 More than 5 million consumers
walk through Music World
stores annually

14. Genre-wise distribution of Music Sales in India
New film music Old Film Music Regional Film Music Popular Music
Devotional International Others
8%
6%
10% 40%
8%
7%
21%
Source: Industry
estimates

15. What more can be done?
 Cater to wide geographical areas
 Try to reduce the cost of their cd‟s
 Diversifying into more products like headphones etc
 Set up a jamming area in the store to increase customer
walk-ins
 Customized selling

16. Thank You