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Retail sector in india
India's retail sector is projected to reach a market size of US$ 1.3 trillion by 2020, with organized retail making up only 8% of this market. The sector faces challenges such as high product return rates and workforce issues, while also experiencing opportunities through digital transformation and the entry of international brands. Competitive dynamics include low switching costs for consumers and a fragmented market requiring strong distribution channels.
Retail sector in india
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- 2. Around 10% of India’sGDP FDI Confidence Index, India ranks 8th By 2020, retail market in India is projected to reach US$ 1.3 trillion Market size estimated - US$ 672 billion Organized Retail Penetration - 8% and unorganized players - 92% Source: Ernst & Young, Price Waterhouse Cooper, Economic Times, TechSci Research Introduction
- 3. INITIATION CONCEPTUALIZATION EXPANSIONCONSOLIDATION • Pure-play retailers realized the potential of the market • Manufacturers opened their own outlets • Movement to smaller cities and rural areas • Large-scale entry of international brands • FDI in single- brand retail and multi-brand retail up to 100% and 51% respectively Pre 1990s 1990–05 2005–10 2010 onward • Entry in food and general merchandise category • Pan-India expansion to top 100 cities Source: Technopak Advisors Pvt Ltd, BCG, TechSci Research Evolution
- 4. Departmental stores Hypermarkets Supermarkets Specialty stores Cash and carry stores Source:Company websites, Press Release Competitive Landscape • Pantaloons • Westside • HyperCITY • Spencer’s stores • Reliance Fresh • Big Bazaar • Titan Industries • Crossword • Metro • Reliance
- 5. High Price sensitive Low switchingcost gives customers high bargaining power Bargaining Power of Buyers Medium Entry is quite simple Need of strong distribution channels Threat of New Entrants High Foreign players and e- retailers Retail sector is highly fragmented High customers may purchase products from a local store Threat of SubstitutesPositive Impact Neutral Impact Negative Impact Porter’s Five Force Framework Analysis Competitive Rivalry Low Larger retailers can switch to different suppliers Bargaining Power of Suppliers Source: Technopak Advisors Pvt Ltd, BCG, TechSci Research
- 7. Source: Ibef July2017and CII-BCG Study (Mint) Retailing Challenges 2015
- 8. Source: BCG CCIDigital Influence Study Digital Influence Penetration of the population Conversion from digital footprint to digital purchase Average number of online buyer
- 9. Operational Innovation Cross DockingSystem • Deployment of new ways to achieve a higher level of performance • Receiving products from multiple suppliers and sorting them for outbound shipments to retail stores and distribution centers
- 10. Source: CII-BCG Study(Mint Retailing Opportunity 2020 Category Online share by 2019 (in %) Groceries <1 Home 8 Beauty 8 Clothes and shoes 10-12 Books and media 13-15 Electronics 25-30 Travel >60
- 11. • Workforce Attrition •Lack of skilled manpower • Stress in Working Culture • Lack of Formal Education 1 2 3 4 HR Challenges
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- 13. Refurbished Goods Two yearsago 25% of products were returned ONLINE RETAILERS CONTAIN PRODUCT RETURNS AT 11-12% Average of 5% in bricks and mortar >25% for items like clothing , shoes and jewellery Premium charge of 20-25% for reverse logistics Rate Of Product Return Challenges Source: tech.economictimes.indiatimes.com
- 14. VR Retail AR Trials AR Demonstration MagicMirror Augmented & Virtual Reality
- 15. Augmented Reality Source: vr.google.com,augment.com, eonreality.com and kantarretail.com
- 16. Augmented Reality Source: vr.google.com,augment.com, eonreality.com and kantarretail.com
- 17. Shopping at bigmalls is becoming a daily activity Huge rush at malls/stores on holidays and weekends Bill is prepared using bar code reader A time consuming process and results in long queues Queuing Challenges
- 18. Enter into the store Shopyour items Scan the products RFID in one-go Receive the bill generated Direct payment Quit Queuing
- 19. Income- 70% Urbanization 9% Spend/capita 25-30% Overall Retail - 12% Organized Retail -20% E-commerce- 40-50% Demographics Annual Growth Source: CII-BCG Study (Mint) By 2020
- 20. For Further Query •Shruti Nair • https://www.linkedin.com/in/shruti-nair- 69620ab4/ • Subhadra Maurya • https://www.linkedin.com/in/subhadra- maurya-2940965a/
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