PRESENTATION ON RETAIL INDUSTRY

Presented by: Anshu Sweta (JU07030) Abhishek Kumar (JU07006) Ashish Kumar (JU07039) Ajeet Ranjan (JU07011)

INDIAN RETAIL LANDSCAPE

FORMATS OF INDIAN RETAIL

TYPES OF RETAIL

International Retail: At a Glance

One of the worlds largest industry exceeding US $ 9 trillion

47 Global Fortune 500 companies & 25 Asia's Top 200 companies are retailers
Dominated by developed countries. US, EU & Japan constitutes 80% of world retail sales Biggest player in India, Pantaloons total group sales is about equal to 2 Wal-Mart super centers annual revenues
3% 8% 2% 9% 38%

13% 27%

USA India

EU Russia

Japan Others

China

Share of Organized Retail

Percentage of Organized Retail
100 80 60 40 20 0 55 40 36 30 20 20 4.6 85 81

USA

Malaysia

Taiwan

Brazil

Indonesia

Thailand

Poland

China

India

Key Players

USA = US$ 2,350 Bn

UK = US$ 406 Bn

China = US$ 313 Bn

Highly evolved US market has Wal-Mart taking only 8% market share UK market has Tesco with only 13.4% market share China market still does not have a clear leader

International Learning
Total retail contribution in World GDP is 27%
Organized retail in US accounts for 22% of GDP Share of organized retail in developing markets ranges between 20% to 55%

Retail markets are organizing faster

In developed markets, dominant player (Wal-Mart in US, Tesco in UK) has a significantly higher share; enjoying up to 8-13% market share

Departmental stores growth is declining while Allunder-one-roof & neighborhood convenience is gaining strength

Retail Landscape in India

Indian Retail - dominated by unorganized sector
Approximately 2 million Mom and Pop Shops Share of organized retail sector is only 4.6% FDI in the retail sector not permitted to protect local retailers (excepting for single brand & cash and carry formats. In this FDI is 51%.) Indian retail sector is concentrated in the world. one of the least

The top five companies hold a combined market share of less than 2% India is third largest market in Asia and Oceania, behind Japan and China.

Retail consumption by categories

In Rs 00 crores

Indian retail is dominated by food & grocery which contributes > 65% of Rs 9.3t retail market, almost 99% of this is dominated by kirana stores.

APPAREL SECTOR
In India, clothing retail accounts for 36% of organised retail business. According to a report global apparel, accessories & luxuries market is likely to grow by 4.5% annually and Asia Pacific region is anticipated to acquire leadership position by 2011. Apparel sector in India poses a lot of challenges to a marketer. So far Indias share in world apparel trade has been insignificant (less than 3%). World garment trade is estimated at around 195 Billion US$ annually. The Biggest manufacturer & supplier is China producing over 50 billion $, followed by Mexico which produces over 8 billion and followed by many countries like India, Sri Lanka and Bangladesh, being the third place countries making and exporting garments worth 5 - 6 billion $ annually.

Key players in Apparel Retail

Store name Positioning Format Type Floor size Location
Pantaloon Megamart Value for money Ex. Arvind Mills 5000sq. Ft. Lifestyle Westside Wills Lifestyle Enjoying the change Ex. ITC Max Family store Multibrand Value pricing Style & affordability Ex. Tata trent gr. 1500030000sq. Ft. C.G.road, Gallops Ahmedabad mall, Ahmedabad Relaxed wear, body care product Footwear, accessories Family Shopping Destination Multibrand

Multibrand

28000sq.ft.

50000sq. Ft.

C.G.road, Ahmedaba d Apparel, accessorie s

Satellite Drive C.G.road road,Ahmedab road Ahmedabad ad Ahmedab ad

Categories

Apparel, furnishin g

Apparel, accessories

Styled clothing

Key players in electronic retail

Future group- ezone Tata- croma

TATA CROMA
Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons. Woolworths Ltd, the Australian retail giant, provides technical support and strategic sourcing facilities from its global network.

Infiniti Retail Limited , is a 100% subsidiary of Tata Sons Ltd., promoted to operate in the promising consumer electronics retail market that is evolving in India. Infiniti Retail, has entered into a technical and sourcing agreement with an Australian retail giant, Woolworths Ltd., which currently operates more than 2000 stores across Australia in 12 different formats, including consumer electronics retailing. Infiniti Retail Ltd., will own and run the retail operations in India, while Woolworths will provide technical support and strategic sourcing facilities from its global network. Infiniti Retail has announced its plans to operate a national chain of multi brand outlets of consumer electronics and durables, under the brand name CROMA. These electronics mega stores, will offer the countrys widest range of consumer electronics products across categories and brands. W ith more than 6000 products, 180 brands and 8 categories Home Entertainment, Small Appliances, White Goods, Computers, Communication, Music, Imaging and Gaming software - the stores will be spread over 15000 to 20000 sq.ft.

 The first Croma store was inaugurated on 9th October 2006, in a suburb of Mumbai, Juhu. Croma is now also at Malad in Mumbai and has opened it doors in Ahmedabad too. Infiniti Retail Limited plans to launch 30 such large format stores across the country by 2008. Infiniti Retail has ambitious plans to expand across India with at least 100 stores by 2010. With the philosophy of We help you buy, this high tech store promises to provide world class service through a team of highly qualified and trained staff, the best product range in India to choose from and great prices on a consistent basis.

Big players in retail

Future group- big bazaar, food bazaar, pantaloons etc. Reliance retail- marks & spencer RPG group- spencer Bharti-walmart Tata tesco- star bazaar

Small players in retail

Parsvnath retail Subhiksha retail Vishal mega mart retail Shoppers stop

Organized Retail in India

The share of organized retail in total retail pie is set to increase from about 3% to 8 10 % by 2010.

Organized retail pie 2007 Market size Rs.78300 cr.

wat ec hes, 2.70% j ewel l er y , 2.90% f oot wear , 9.90%

c l ot hi ng & f ashi on ac c essor i es, 38.1 0% c onsumer dur abl es, 9.1 0%

mobi l es & ac c essor i es, 3.40% phar mac eut i c al s, 2% f ur ni shi ngs, ut ensi l s& f er ni t ur e, 6.40% ent er t ai nment , 3.1 0% l ei sur e, 2.80% out of home f ood, 7.30% heal t h &beaut y c ar e, 0.80% f ood & gr oc er y , 1 .50% 1

Types of retail market

Hyper market- more than 75000 square feet Super market- less than 75000 square feet Neighborhood store- 3500 to 5000 square feet Kirana store

Key Trends
Existing players expanding to smaller towns
Number of existing players like Big Bazaar, Shoppers Stop, Piramyd are planning expansion in smaller cities

Indian business houses in retail

Many business houses are planning retail entry / expansion either on their own or through partnerships

Global Players planning entry in India

Some of worlds largest retailers - evaluating entry in India including Wal-Mart, Carrefour,Tesco, IKEA, Best Buy, Lowe's, Kingfisher Group, Auchan, Woolworth, NTUC etc.
Shop Rite, Metro, Marks & Spencers, & Spar are already here Some have setup Sourcing / Back-office centers e.g. Tesco, Wal-Mart, etc.

Rural opportunity - becoming interesting for organized retailers

1400

1200

Current Retail Growth Projections

1203 1146 1092 943 990 1040 85 68 55 44

120

1264 107 100

1000

80

Rs '000 Cr

800

60 600

40

400 28 200

35 20

0 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Total Retailing Market ( Rs '000 Cr)

Organized Retailing (Rs '000 Cr)

Indian retail industry ~ Rs 990,037 Cr (USD 300 bn), growing at 5-6% p.a. Organised retail industry ~ Rs 35,000 Cr (USD 7.7 bn), growing at 25-30% p.a.

Rs '000 Cr

Gaps in Current Organized Retail

Lack of right formats catering to needs especially All Under One Roof formats Absence of single trusted player with pan-India presence No investment in supply-chain infrastructure. Sole focus on front-end with minimal back-end linkages (DC, logistics, cold chain, vendor & farmer development, etc.) Inconsistent availability, quality & pricing Transactional approach, minimal customer service over the life-cycle focus on

Time for Q & A