This document discusses the evolution and growth of organized retail and e-commerce in India. It notes that organized retail penetration is currently at 8% but has strong growth potential. E-commerce is also growing rapidly, expected to reach $70 billion by 2020, driven by factors like increasing internet access. However, brick-and-mortar retailers are facing challenges from e-commerce sites offering deep discounts. The document outlines strategies retailers are taking to compete, like offering their own discounts, and calls for government oversight of foreign investment and pricing in e-commerce.

1. organised retail
in India

2. Evolution of Retail in India

3. The Indian advantage

4. A glimpse into the future

5. A glimpse into the future

6. Competitive landscape

7. Organized retail
• Organized Retail Penetration at 8% (nascent stage)
• Strong potential for growth
• Supply drivers
• New entrants
• Expansion plans of existing players
• Emergence of new categories
• Infrastructure improvement
• Demand drivers
• Rising income levels
• Increased urbanisation
• Experimentation and growing aspiration levels
• Credit availability
India is the fifth largest preferred retail destination globally

9. Growth potential
FMCG players are focusing on rural market as it constitutes over 33 per cent of FMCG consumer base in India

10. E-commerce
• Online retail is estimated to reach USD70
billion by 2020 from USD2.24 billion in
2013
• Key drivers –
• Young population
• Easier access to credit and payment options
• Increasing internet penetration and speed
• 24-hour accessibility
• Convenient and secured transactions
• Payment options
Cash-on-delivery is the most preferred payment option with over 30 per cent of buyers opting for it in India

11. E-commerce
• Of the total 200.0 million credit and
debit card holders, just about 10.0
million people transact online.
• Of the total 900.0 million mobile
users, a meagre 27.0 million are
active on the Internet.
• Moreover, only 4.0 per cent of the
active mobile internet users buy
products through mobile phones.

12. Organised retail vs e-commerce
• Retail chains have been seeing reduced
footfalls and e-commerce has been
growing at a rate higher than 30 per cent
(compounded annually) since 2009.
• In a recent report, Edelweiss analysts said
that aggressive discounting by online
retailers was likely to continue due to
strong private-equity funding.
• As per the report, online retailers have
caused more disruption in the menswear
and accessories segments.
"E-commerce can grow but not at the expense of brick-and-mortar stores. People cannot walk into stores, try products, check sizes
and prices and buy online at cheaper rates.“
-Delhi based mall owner

13. Saving modern retail
• Uniform discounting policy
 Non-conflicting policies for online and offline channels
 Malls talking to apparel and shoe brands for uniform pricing
• Better deals
Kishore Biyani's Future Group has come out with 'The 12 months of Free Shopping
Festival' as an answer to online retail, where customers can get up to Rs 3 lakh worth
of free shopping in a year or Rs 25,000 of shopping every month.
Essar-owned The Mobile Store has come out with an advertisement, which said: "We
beat online like no one else can." Besides 10 per cent buyback and "lowest price
guaranteed', it offers buyback with great value, setting up new phone for free, and
data transfer to new phone, which it claims is better than online player
"We have to make sure brands don't undercut prices online, the brick-and-mortar outlets need to protect themselves. We expect
brands to have a clear non-conflicting policy for online and offline channels.“
-Rajiv Malla, Centre Director, Phoenix market city, Pune

14. Organised retail vs. e-commerce
• Exclusivity
Nike, Adidas, and Tommy Hilfiger would not sell their latest collections online.
Tata-owned Trent sells brands which are not made available online.
• “Muscle-flexing”
Electronics brands like Lenovo and Canon advising buyers not to deal with e-commerce
players
Consumer electronics companies like LG, Samsung, Videocon, Sony and Panasonic instructing
their trade partners that products sold through online marketplaces without their knowledge
during flash sales would not get the benefit of after-sale service and warranties.
• Consolidation
 The brick and mortar (B&M) retailers have to achieve scale through M&A.
 Aditya Birla group announced the consolidation of all its branded apparel businesses under one
company Aditya Birla Fashion and Retail, which will be India’s largest pure play fashion and lifestyle
company with a network of more than 1,800 stores spanning five million sq. ft. The company also plans
to add another 200 stores this year.
 Bharti Retail announcing plans to merge with the retail operations of Future Retail.

15. Organised retail vs. e-commerce
• Retailers should take advantage of digital retail channels (e-
commerce), which would enable them to spend less money on real
estate while reaching more customers in tier-2 and tier-3 cities
• Excessive discounting by E-commerce websites is not viable in the
long term
• Long term prospects remain positive for retail with –
• Rising incomes
• Favourable demographics
• Entry of foreign players
• Increasing urbanization
“I have absolutely no doubt that in India, e-commerce will do (to modern trade) what mobile phones have done to the telecom
industry. We are going to leapfrog modern trade and hyper markets and go from mom-and-pop stores to e-commerce,”
- Harish Manwani, non-executive chairman, Hindustan Unilever Ltd (HUL)

16. Organised retail vs. e-commerce
"Nobody has taken our share or anybody else's share. The pie is getting
large. Those who can give better customer experience can take a large
share of the pie."
-Rakesh Biyani, Joint Managing Director, Future Retail

17. Omni-channel
• Omni channel retailing is the way to go, to
offer a seamless and unified customer
experience in order to stay relevant.
• To address the total customer experience
and drive customer satisfaction
• Integration of store network with other
channels, in order to leverage buyers’
online shopping interest to bolster store
sales
• Measuring the influence of all touch points
on a customer's journey to purchase—
online, offline, and across devices for a
holistic view of how a valuable customer
makes a purchase

18. Recommendations: Corporate Strategy
• Rural India
 70% of Indian market but only 40% of total consumption
 Concentrating on rural India could be a boom in upcoming years
• Online retail
 With high internet penetration, online retail is expected to touch $1.7 billion @10% CAGR in next
three years
 Switching to this format could boost the growth of an organization
• Private labels
 Huge potential in this strategy
 Share of private labels in India is 6%, whereas in US and UK its 19% and 39%
• Luxury market
 High growth markets such as jewellery, watches, apparels etc.
 CAGR in this sector is predicted to be 20% in the period 2012-15, and hence a huge potential

19. E-commerce and Government Policy
• The Confederation of All India Traders (CAIT) has demanded the commerce
and industry ministry take steps to monitor and regulate online businesses.
• It has also sought a probe into the business model and trade practices of e-
commerce companies to find out how they are offering huge discounts.
• Even though FDI is not permitted in e-commerce, all prominent companies
operating in this space have foreign funds, as they either have a
marketplace model (which is not barred from foreign investment) or they
have a complex corporate structure to beat the norms.

20. Recommendations: Government Policy
• The inflow of foreign funds must be monitored to check whether
these e-commerce companies are getting any additional unfair
advantage.
• The government must look at strengthening the Competition
Commission's role for enforcing rules against predatory pricing.

21. Thank you