Industry Outlook - Retail
Organized Vs Unorganized Retail Sector

Organized Retail Sector   Unorganized Retail Sector
Organized Vs Unorganized Retail Sector
Factor                 Organized Retail Sector     Unorganized Retail Sector



Definition             Modern form of retailing    Traditional form of retailing



Examples               Hypermarket, Retail chain   Mom n Pop stores, hand
                       etc.                        cart, pavement vendors etc

Market Share           3%                          97%



Market Growth          35%                         6%



Challenges             Poor supply chain           Use of labour intensive
                       management, aggressive      technology, lack of
                       expansion etc.              government support etc.
Sources : www.ibef.org
Retail Trade – India, USA, China
Country      Trade ($b)   Employment        Shops (mn)        Organized
                                                              sector



India        180-394      7                 1.2               2-3


China        360          12                2.7               20


UAS          3800         12.6-16           15.3              80




                                Sources : Repot, AC nielson
Key Growth Drivers
• Economic Growth

• Demographics

• Urbanization

• Credit availability
Exclusive showrooms
                  Mono/ exclusive           either owned or                Complete range
                                          franchised out by a            available for a given,
                   branded retail                                       brand certifed product
                                             manufacturer
                       shops                                                    quality




                                          Focus on particular
Retail Formats                                                          Consumer get to have
                 Multi-branded retail   product categories and
                                                                        more choices as many
   in India            shops              carry most of the
                                                                        brands are on display
                                            brand available




                                                                             One stop shop for
                                                                         customer, many product
                                                                        line of different brands on
                 Convergence            Usually have on display most
                                        of the convergence as well as              display
                 retail oultels              consumer electronic
                                              products including
                                        communication and IT goods
Different Formats
Big Shots of the Industry
1)   Pantaloon Retail
2)   Raheja Group
3)   Reliance Retail
4)   Tata Group
5)   RPG Group
6)   Landmark Group
7)   Piramal Group
8)   Bharti - Walmart
9)   A V Birla Group
Pantaloon Retail
 Headquartered - Mumbai -450 stores (India) – employees-
  18,000 people.

 All India space- 5 mn sq.ft, expecting to reach 30 mn by 2010.

 Various segment -food & grocery, home solutions, consumer
  electronics, Health & Beauty product etc.

 Recent Innovations include e-commerce ‘Hybrid Format of
  ‘Small shops’
Raheja Group
 First Departmental store in India, SHOPPER’S STOP

 Member of IGDS

 7,52,000 sq.ft. retail space with turnover of 6.75 millions

 Crossword, Mother care, Home stop etc.

 MOU with Home retail group of UK

 Plan establish network of 55 hypermarkets across the country
  -sales turnover of US$ 100 million by2010.
Reliance Retail
 More than 300 Reliance fresh store and first Reliance Mart
  hypermarket in Ahmedabed

 Expansion in two tier cities like Vijaywada, Pune, Ludhiana etc

 Investment of Rs.30,000 cr to set up new formats of retail ,
  expecting sales of Rs.90,000 cr by 2010
Tata Retail Group
 Established in 1998

 Trent- subsidies of Tata group operates Westside and Star
  India Bazaar, Croma

 Plans to pen more than 27 stores across its retail formats
  adding 1.5 mn sq.ft. of space in the next 12 DLF malls
A V Birla Group
 Strong presence in apparel- Madura Garments

 Owned Brands like Louis Phillipe, Van Heusen, Allen Solly,
  Peter England

 Investment plan – Rs.8000-9000 cr in the first 3 years till 2010

 “MORE” range of 15 supermarkets open at Nashik, Pune &
  other two tier cities
Merger & Acquisition
                                                                                   Considerati
Year   Acquired/ JV Company                                                        on
       / Target
                            Acquirer          Nature of Business          Stake    (US$
                                                                                   million)
2005 Liberty shoes            Future Group     Retail (footwear)           51%     3

2005 Indus- league clothing   Future Group     Retail Clothing             68%     5

2005 Odyssey India            Deccan           Leisure Retail chain        100%    14
                              Chronicle        (books, music, toys)
                              holdings
2005 Landmark                 Tata Trent       Books, Music,               74%     24
                                               Accessories
2006 Bistro hospitality       TGI Friday’s     Restaurant                  25%     N/A

2006 Indus League clothing    Etam Group,      Lingerie & women’s          50%     8
                              France           wear retailing

                                             Sources : www.indianretailforum.com
Current Potential & Prospect of Indian Retail
                   Sector
 Growth prospective

 Hurdles in growth phenomenon

 Supportive measures by Government

 Current market meltdown & its impact

 Overall scenario about Indian retail industry
Changing face
of Indian
Consumerism
Important Trends
• The whole concept of shopping ……change

• Heavy pockets …

• The Mall Mania…

• Mall ….. Shopping + Entertainment
Map of India’s Income class
                                         1994 – 1995      1999 – 2000   2007 – 2008

Rich (Annual income >US$ 4700)           1 mn household   3 mn HH       6 mn HH
Benefit Maximize: Owns CAR, PC


Consuming (US$ 1000- 4700)               29 mn HH         55 mn HH      75 mn HH
Cost-benefit optimizer:
have bulk of branded consumer goods,
70% of 2-wheelers,
refrigerators,
washing machine




Climbers (US$ 500-1000)                  48 mn HH         66 mn HH      78 mn HH
Cash-constrained benefit seekers:
have at least one major durable(mixer,
sewing machine, television)
Map of India’s Income class
                                  1994 – 1995    1999 – 2000   2007 – 2008

Aspirants (US$ 350-500)          48 mn HH       32 mn HH       33 mn HH
New entrants into consumption:
have bicycle, radio, fans




Destitute (Less than US$ 350)    35 mn HH       24 mn HH       17 mn HH
Hand to mouth existence: Not
buying




Source: Ernst & Young
Consumer Dynamics
• Youngest population on the globe
• Growth pace of the Indian economy
• 97% retail market is untouched by organized
  retailers
• Food & Grocery …………………. 55%
• Consumption is moving out of the home
• Indian consumers has grown richer…
The process of recruitment followed in India in
           organized retail industry

                                     For Junior level
Search for retail positions
                              • Junior level, required in a
                                mass number.

                              →go ahead with paper ads for
                                walk-ins

                              •    Requirement is less for junior
                                  level

                              → go ahead with consultants and
                                reference recruitments
For Junior level

• The recruitment process starts with an interview
  taken by

      → department managers

      → followed by store manager

      → HR

      → team leaders.
What is the process of recruitment followed in India in
              organized retail industry?

                                  For Middle level

                            •   Middle level, then

                            → consultants

                            → Job - portals

                            → news paper ads of walk-ins.
For Middle level
• The recruitment process starts with first short
  listing by HR then interview is conducted with

       → department head

       → Store Manager

      → Zonal Manager

      → HR
Recession- hit- recruitment strategies
• Optimizing staff potential
• Adopt a scientific method in their recruitment
  policies,
• Laying more emphasis on quality than quantity.
• Aim to hire people in large numbers to shortlist
  the ones that are 'best available' geographically.
• The PAC test to decide from “where to hire” and
  “where to locate the firm”
Why does Company hire Placement
          Consultants

    • To help them to find the right
    candidate to join their organization.

    • Job Seekers contact Recruitment firms
    to help them identify and then apply for
    the right job.
The role of recruitment agents and consultants vis-à-vis
      employment with organized retail in India.

      COMPANY             CONSULATNATS

                         •   Who are Placement Consultants in the Job
                             & Recruitment Industry

                         → an entity that works towards reducing
                           clutter

                         → streamlining the manpower
                           requirements of Companies, big and
                           small.

                         → These firms serve as middlemen and
                           help organizations and job seekers to
     APPLICANTS
                           find each other!
How It Works:
• Consultants work for a number of different Companies, small and large.

• These head hunter groups receive details about the job vacancy such as
  job responsibilities, desired experience, remuneration etc.

• Next, Consultants go through their present database of job seekers
  registered with them. This database of aspiring candidates is a Placement
  Consultant's resource built over a period of time.

• Job seekers contact recruitment firms either through phone, email or walk
  ins and register their Resumes with them.

• Next, the wait begins - candidates hope to be informed of good openings
  and prepare themselves for interviews.
How to apply for a job through Placement Consultants:



        • Identifying a Placement Firm

        • Contacting them

        • Following Up

        • Jobs and Career Websites
Positions & Remunerations
Serial no.   Particulars                    Salary


1            Technical Engineer             20000
2            Accounts Manager               15000
3            Accounts Assistance (Back      10000
             Office, HR, Recovery, Bills)

4            Sales & Marketing Manager      25000
5            Sales & Marketing Executive    20000
6            Front Desk Customer Care       8000
             Executive

7            Technical Supervisors (MST)    15000
8            Bouncers / Supervisors         12000
9            Store Manager                  35000
10           Merchandise Manager            25000
Strengths                                 weakness

Technology Incentive                     Low conversion level
Super Market Stocks                      Customer Loyalty
Rising Disposable Income                 Underdeveloped supply chain
Increase in number of people in earner   Lack of adequate utilities
 category.




opportunity                               threat

Large consumer market                    High market share of unorganized market
Growth of Organized sector               Shopping Culture
Rural Retailing                          Poor inventory turns & stock availability
Potential for Investment                  measures.
                                          Inflation
Retail Industry

Retail Industry

  • 1.
  • 2.
    Organized Vs UnorganizedRetail Sector Organized Retail Sector Unorganized Retail Sector
  • 3.
    Organized Vs UnorganizedRetail Sector Factor Organized Retail Sector Unorganized Retail Sector Definition Modern form of retailing Traditional form of retailing Examples Hypermarket, Retail chain Mom n Pop stores, hand etc. cart, pavement vendors etc Market Share 3% 97% Market Growth 35% 6% Challenges Poor supply chain Use of labour intensive management, aggressive technology, lack of expansion etc. government support etc.
  • 4.
  • 5.
    Retail Trade –India, USA, China Country Trade ($b) Employment Shops (mn) Organized sector India 180-394 7 1.2 2-3 China 360 12 2.7 20 UAS 3800 12.6-16 15.3 80 Sources : Repot, AC nielson
  • 6.
    Key Growth Drivers •Economic Growth • Demographics • Urbanization • Credit availability
  • 7.
    Exclusive showrooms Mono/ exclusive either owned or Complete range franchised out by a available for a given, branded retail brand certifed product manufacturer shops quality Focus on particular Retail Formats Consumer get to have Multi-branded retail product categories and more choices as many in India shops carry most of the brands are on display brand available One stop shop for customer, many product line of different brands on Convergence Usually have on display most of the convergence as well as display retail oultels consumer electronic products including communication and IT goods
  • 8.
  • 9.
    Big Shots ofthe Industry
  • 10.
    1) Pantaloon Retail 2) Raheja Group 3) Reliance Retail 4) Tata Group 5) RPG Group 6) Landmark Group 7) Piramal Group 8) Bharti - Walmart 9) A V Birla Group
  • 11.
    Pantaloon Retail  Headquartered- Mumbai -450 stores (India) – employees- 18,000 people.  All India space- 5 mn sq.ft, expecting to reach 30 mn by 2010.  Various segment -food & grocery, home solutions, consumer electronics, Health & Beauty product etc.  Recent Innovations include e-commerce ‘Hybrid Format of ‘Small shops’
  • 12.
    Raheja Group  FirstDepartmental store in India, SHOPPER’S STOP  Member of IGDS  7,52,000 sq.ft. retail space with turnover of 6.75 millions  Crossword, Mother care, Home stop etc.  MOU with Home retail group of UK  Plan establish network of 55 hypermarkets across the country -sales turnover of US$ 100 million by2010.
  • 13.
    Reliance Retail  Morethan 300 Reliance fresh store and first Reliance Mart hypermarket in Ahmedabed  Expansion in two tier cities like Vijaywada, Pune, Ludhiana etc  Investment of Rs.30,000 cr to set up new formats of retail , expecting sales of Rs.90,000 cr by 2010
  • 14.
    Tata Retail Group Established in 1998  Trent- subsidies of Tata group operates Westside and Star India Bazaar, Croma  Plans to pen more than 27 stores across its retail formats adding 1.5 mn sq.ft. of space in the next 12 DLF malls
  • 15.
    A V BirlaGroup  Strong presence in apparel- Madura Garments  Owned Brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England  Investment plan – Rs.8000-9000 cr in the first 3 years till 2010  “MORE” range of 15 supermarkets open at Nashik, Pune & other two tier cities
  • 16.
    Merger & Acquisition Considerati Year Acquired/ JV Company on / Target Acquirer Nature of Business Stake (US$ million) 2005 Liberty shoes Future Group Retail (footwear) 51% 3 2005 Indus- league clothing Future Group Retail Clothing 68% 5 2005 Odyssey India Deccan Leisure Retail chain 100% 14 Chronicle (books, music, toys) holdings 2005 Landmark Tata Trent Books, Music, 74% 24 Accessories 2006 Bistro hospitality TGI Friday’s Restaurant 25% N/A 2006 Indus League clothing Etam Group, Lingerie & women’s 50% 8 France wear retailing Sources : www.indianretailforum.com
  • 17.
    Current Potential &Prospect of Indian Retail Sector
  • 18.
     Growth prospective Hurdles in growth phenomenon  Supportive measures by Government  Current market meltdown & its impact  Overall scenario about Indian retail industry
  • 19.
  • 20.
    Important Trends • Thewhole concept of shopping ……change • Heavy pockets … • The Mall Mania… • Mall ….. Shopping + Entertainment
  • 21.
    Map of India’sIncome class 1994 – 1995 1999 – 2000 2007 – 2008 Rich (Annual income >US$ 4700) 1 mn household 3 mn HH 6 mn HH Benefit Maximize: Owns CAR, PC Consuming (US$ 1000- 4700) 29 mn HH 55 mn HH 75 mn HH Cost-benefit optimizer: have bulk of branded consumer goods, 70% of 2-wheelers, refrigerators, washing machine Climbers (US$ 500-1000) 48 mn HH 66 mn HH 78 mn HH Cash-constrained benefit seekers: have at least one major durable(mixer, sewing machine, television)
  • 22.
    Map of India’sIncome class 1994 – 1995 1999 – 2000 2007 – 2008 Aspirants (US$ 350-500) 48 mn HH 32 mn HH 33 mn HH New entrants into consumption: have bicycle, radio, fans Destitute (Less than US$ 350) 35 mn HH 24 mn HH 17 mn HH Hand to mouth existence: Not buying Source: Ernst & Young
  • 23.
    Consumer Dynamics • Youngestpopulation on the globe • Growth pace of the Indian economy • 97% retail market is untouched by organized retailers • Food & Grocery …………………. 55% • Consumption is moving out of the home • Indian consumers has grown richer…
  • 24.
    The process ofrecruitment followed in India in organized retail industry For Junior level Search for retail positions • Junior level, required in a mass number. →go ahead with paper ads for walk-ins • Requirement is less for junior level → go ahead with consultants and reference recruitments
  • 25.
    For Junior level •The recruitment process starts with an interview taken by → department managers → followed by store manager → HR → team leaders.
  • 26.
    What is theprocess of recruitment followed in India in organized retail industry? For Middle level • Middle level, then → consultants → Job - portals → news paper ads of walk-ins.
  • 27.
    For Middle level •The recruitment process starts with first short listing by HR then interview is conducted with → department head → Store Manager → Zonal Manager → HR
  • 28.
    Recession- hit- recruitmentstrategies • Optimizing staff potential • Adopt a scientific method in their recruitment policies, • Laying more emphasis on quality than quantity. • Aim to hire people in large numbers to shortlist the ones that are 'best available' geographically. • The PAC test to decide from “where to hire” and “where to locate the firm”
  • 29.
    Why does Companyhire Placement Consultants • To help them to find the right candidate to join their organization. • Job Seekers contact Recruitment firms to help them identify and then apply for the right job.
  • 30.
    The role ofrecruitment agents and consultants vis-à-vis employment with organized retail in India. COMPANY CONSULATNATS • Who are Placement Consultants in the Job & Recruitment Industry → an entity that works towards reducing clutter → streamlining the manpower requirements of Companies, big and small. → These firms serve as middlemen and help organizations and job seekers to APPLICANTS find each other!
  • 31.
    How It Works: •Consultants work for a number of different Companies, small and large. • These head hunter groups receive details about the job vacancy such as job responsibilities, desired experience, remuneration etc. • Next, Consultants go through their present database of job seekers registered with them. This database of aspiring candidates is a Placement Consultant's resource built over a period of time. • Job seekers contact recruitment firms either through phone, email or walk ins and register their Resumes with them. • Next, the wait begins - candidates hope to be informed of good openings and prepare themselves for interviews.
  • 32.
    How to applyfor a job through Placement Consultants: • Identifying a Placement Firm • Contacting them • Following Up • Jobs and Career Websites
  • 33.
    Positions & Remunerations Serialno. Particulars Salary 1 Technical Engineer 20000 2 Accounts Manager 15000 3 Accounts Assistance (Back 10000 Office, HR, Recovery, Bills) 4 Sales & Marketing Manager 25000 5 Sales & Marketing Executive 20000 6 Front Desk Customer Care 8000 Executive 7 Technical Supervisors (MST) 15000 8 Bouncers / Supervisors 12000 9 Store Manager 35000 10 Merchandise Manager 25000
  • 35.
    Strengths weakness Technology Incentive Low conversion level Super Market Stocks Customer Loyalty Rising Disposable Income Underdeveloped supply chain Increase in number of people in earner Lack of adequate utilities category. opportunity threat Large consumer market High market share of unorganized market Growth of Organized sector Shopping Culture Rural Retailing Poor inventory turns & stock availability Potential for Investment measures. Inflation