RETAIL BASICS

Retailing in India & Strategic Retail Models Retail Excellence Series

Some Statistics ,[object Object],[object Object],[object Object],[object Object],[object Object]

Some Retail Statistics ,[object Object],[object Object],[object Object],[object Object],[object Object]

A Nation of Small Retailers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

To illustrate : Outlets in Chennai Source : KSA Database So many channels – in the city with the highest share of organized retail Shop Type Number Grocers 13691 General Stores 1911 Chemists / Druggists 2170 Pan/Beedi/Cigarette shops 7395 Hardware Stores 935 Co-op Departmental Stores 86 Private Departmental Stores 174 Others 5762 Total 32125

Total retail market Rs. 9,30,000 crore

Organized retail market Rs. 28,000 crore (3%)

Features of Indian Retailing till date ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Features of Indian Retailing till date ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Change in the last decade ,[object Object],[object Object],[object Object],[object Object],[object Object]

The Change of Guard Post-Liberalization ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Emergence of largely retailers from manufacturer-retailers

Experience in relevant markets justify the sentiment 10-12 years for organized retailing to achieve 20% share

Change Drivers : The Consumer ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Rich (Above $ 4,500) Benefit Maximisers : Own Cars, PCs Consuming ( $900 - $4,500) Cost -benefit optimisers : Have bulk of branded consumer goods, 70% of two- wheelers, refrigerators, washing machine Climbers ( $500 - $900) Cash - constrained benefit seekers :Have at least one major durable (mixer, sewing machine / television) Aspirants ($350 - $500 ) New entrants into consumption : Have bicycles, radios, fans Destitutes ( Less than $400) Hand - to - mouth existence : Not buying Consumer Class Map

The very rich The consuming class The Climbers The aspirants The destitute 1995 -96 2001 - 02 2006 - 07 Income classes across India by size 1.2 (7) 32.5 (186) 44.0 (253.9) 54.1 (312.2) 33.0 (190.4) 2.6 (15) 46.4 (265) 74.4 (429) 33.1 (192) 24.1 (140) 5.2 (30) 75.5 (432) 81.7 (472) 20.2 (117) 16.5 (95) URBAN Million Households (Pop) 4.0 (23) 40.8 (230) 13.7 (77) 0.7 (4) 0.9 (5) 1.9 (11) 26.5 (150) 17.4 (98) 3.9 (22) 2.6 (16) 7.1 (40) 5.3 (30) 0.8 (5) 16.6 (93) 16.8 (94)

Change Drivers : Macro Environment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Change Drivers - Entry of serious players ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Other Change Drivers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Change Drivers - In support ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Growth of Organized Retail 5.0 10.0 15.0 20.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year $ bn 4.2 6.0 7.5 21 Organized – The Next Sunrise Industry ,[object Object],[object Object],[object Object],25.0

[object Object],[object Object],[object Object],[object Object],Great growth ahead Industry driven Distributor controls Consumer driven Retailer controls Consumer dictates US UK Germany Japan HK Singapore Taiwan Indonesia Philippines China India Retail Power

Strategy versus Operational Effectiveness Retail Strategy

Operational Effectiveness Performing similar activities better than rivals. Strategic Positioning Performing different activities from rivals or performing activities in different ways . Operational Effectiveness is Not Strategy

Competitive Strategy is about being different . It means deliberately choosing a different set of activities to deliver a unique mix of value. The essence of strategy is in the activities – Choosing to perform activities differently or to perform different activities from rivals. Strategy Rests on Unique Activities

Evolution of Retail Stores in the Developed Countries ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Key Success Factors - Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Key Success Factors - Operations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Great future but several challenges to overcome ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Benefits of organized retailing ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Consumers, Suppliers, Government and Retailers….all benefit from the revolution

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