Indian Retailing Scene

Presented by: Ridhdhi Viral

CONTENTS..
     

Meaning and definition of Retailing Overview of the Indian retail industry. Various formats of Retailing. Categories of Indian Retailing. History and evolution of organized retailing in the context of pre and post 90s era. Recent trends in retailing.

Definition of Retailing
Retailing can be defined as  set of activities involved in  selling goods and services to  ultimate consumers for  personal consumption.

Overview of Indian Retail industry

       

Retail is the 2nd largest sector in India. It contributes 10 to 11% in GDP. India is the 9th largest retail market in the world. Estimated that retail markets in India will grow from USD 394 bn in 2005 to USD 608.9 bn in 2009. Total retail market in India is growing at CAGR (compound Annual Growth Rate) of 5.5% to USD 374 bn in 2015 The organized retail pie is dominated by clothing, textiles and fashion accessories (40%) followed by food and grocery (19%). The overall retail market is dominated by food & Groceries which accounts for 3/4th of the same. Current Size of Organized Retail is only US $9 billion, Above 3% of the total size. Expected to grow by 30-35% growth rate per annum

Conti
 

Retailing in India is witnessing a huge revamping exercise India is rated the fifth most attractive emerging retail market: a potential goldmine. Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion As per a report by KPMG the annual growth of department stores is estimated at 24% Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney.

Various formats of Retailing

Malls: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd, Pantaloon.
 

Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.

Conti..
Discount Stores: Discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.


Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.


Conti
Hypermarts/Supermarkets: Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.


Conti
Convenience Stores: These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.
 

MBOs : Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.

Indian Retailing falls into 3 categories

Retailing in India was witnessed before a long back..

The face of Pre-1990

   

neighborhood Kirana stores Era of government support for rural retail 1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches

Conti


The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers. For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

POST 1995..


Post 1995 onwards saw an emergence of shopping centers, mainly in urban areas, with facilities like car parking targeted to provide a complete destination experience for all segments of society (departmental store) Emergence of hyper and super markets trying to provide customer with 3 Vs - Value, Variety and Volume Expanding target consumer segment: The Sachet revolution At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000 crore

 

Recent trends in retailing

Retailer Trends
Before. Fragmented Individual / Local Traditional Grocers etc Merchants Unsophisticated Owner Operated Vulnerable Now Getting Stronger / Consolidated Organised / Global Innovative Formats Retail Brand Managers Technology Intensive System Driven Powerful

Merchants to Brand Managers



Private labels Eg Food World, Nilgiris, Shoppers Stop. Not Just Cheap Up market . Price close to premium brands Greater profits and leverage Differentiate stores from competitors  Ambience & Shopping Experience Better recruitment of professional Increase in salaries to employees Retailers are Moving from Market Driven to Market Driving

Consumer Trends
  

Urbanization

Higher disposable income Emergence of new young Indian



Awareness of alternatives

Demand for Convenience / Service

Free Door Delivery. Ready to eat / Cook, Entertainment for Kids. Touch Feel & Buy Ever Green ,Frozen Fresh, Real Good

 

Demand for Fresh We need that



Value oriented Respond well to consumer offers

New formats, consolidation



Mega projects (> 1 Million sq. ft.) being planned in major metros Future Group (Pantaloon) planning to develop a 2 Million sq. ft. flagship mall in Mumbai

Unitechs Great India Place in Noida: 1.4 Million sq. ft. project Phase II of Inorbit Mall, Mumbai to add 0.5 Million sq. ft. making total area of development 1 Million sq. ft.

Conti


Specialty malls already in place & many more in the offing

Factory Outlet malls - Brand Factory (Bangalore) Luxury malls DLF Emporio (New Delhi) Womens malls Eva (Bangalore) Interiors & exteriors Ishanya (Pune) Jewellery Gold Souk (Gurgaon), Fort Knox (Kolkata) Wedding malls Shagun Wedding Mall (Kolkata)

Growth is the only evidence of Life!!!!!!