Key emerging consumer markets from around the globe

Key emerging consumer markets from around the globe

Richard Kelly, Chief Catalyst, Fung GroupGovind Shridhar Shrikhande, Customer Care Associate and Managing

Director, Shoppers Stop LimitedMarie-Helen Straus, Chief Officer Consumer and Innovation Strategies,

Chalhoub Group

Richard Kelly,Chief Catalyst Fung Group

Govind Shridhar Shrikhande, Customer Care Associate &

Managing Director Shoppers Stop

Marie-Helene Straus Chief Officer

Consumer & Innovation Strategies,

Chalhoub Group

Susan Tang VP, Business Development

& Operations, Macy's China

Asia: 1.7B Asia: 3.0 BAsia: 0.5 B

Graphic: BBC

* 2018 : China becomes world’s largest retail market

Globalization of production

1978-2009

Chinese Economic Reforms

Advancement in supply chain

Globalization of consumption

2010 - 2039

Rise of emerging markets consumers

New paradigms in global trade

Global dispersed manufacturing

Billion to Billion

What happens when 2 billion consumers enter global markets in next 2 decades?

GLOBAL GROWTH MARKETS - INDIA

1. India & Indian Economy

2. Indian Consumers

3. Internet Penetration in India: Today and Tomorrow

4. Indian Retail: Evolution, Market Size, Challenges & Online Evolution

5. Shoppers Stop 26 Years Journey and Beyond

6. Success Factors For Retailers in India

Index

INDIA Thrives on

1. India & Indian Economy

FOOD 33 MILION GODS

1. India & Indian Economy

CRICKET BOLLYWOOD

INDIA Thrives on

1. India & Indian Economy

29 States

+

7 Union Territories

+

22 Languages

IN 2017

1. India & Indian Economy

DEMONETIZATION in 2016

2. Indian Consumers

*Knowledgeable

*Always On

*Multi Screen natives

*Idli with Pizza

*TV with 500 + Channels

*More presence virtually on Social Media

* Language Search

*Digital Leap through:

Aadhar, Wallets etc

Consumers

*Friday Dressing

*Denims

*Women’s Western wear

*Wedding Wear as a Festival

*Make-Up

Fashion

2. Indian Consumers

34% 52% 71% 88% 7% 34%

RetailSize in US$ Bln% ECOM

+70016

+40010

+153

3. Internet Penetration in India: Today & Tomorrow

3. Internet Penetration in India: Today & Tomorrow

4. Indian Retail: Evolution Changes over the Last 40 Years

2015 – $630 B 2020 – $1150B

Source: Google, Motilal Oswal, Technopak, India Retail Report

Brick & Mortar Retail is here to stay and Grow!!!

17

560

50

10

4. Indian Retail: Market Size

18

Unclear FDI Policy in Multi Brand Retail & No execution in Online Retail

4. Indian Retail: Challenges

CONSUMER

GOVERNMENT PROPERTY

PEOPLE• Evolving Tastes• Low Brand Loyalty• Multi-format & Multi Channel

Competition

• Availability• Attrition• Knowledge

• Licenses – 65+• FDI Rules• Infrastructure

• Lack of Quality Realty• High Rentals• Professional Mall Management

Globally Online has Evolved Differently:

• In USA – Amazon had Tax advantage & Tech Thinking: IOS, Android, Kindle, Prime were further drivers.• In China – Alibaba – developed Escrow payment to beat trust problems along with Tax/Pricing advantage and a Market Place model.

It developed a Local Digital ecosystem.• In India – Discounting & Big Budget advertising is driving growth “This of That” model supported by Global Digital ecosystem –

Google, Facebook, What’sApp, Cash on Delivery, Mobile First.

Unit Economics is still a challenge both for Online & Organized Retail – giving rise to GMV modelBrick & Mortar is getting disrupted even before it became strong.

Indian Online Vs World

4. Indian Retail: Online Evolution

• We revolutionized modern retail in India in 1991 with the launch of our First Store in Andheri (Mumbai)- Men’s Wear Only

• A first- of-its-kind store operating 4000 sq. feet

• A Movie Theatre was converted to Retail Theatre

• Today 81 Stores covering 30 cities & 615 mln US$ Sales

How It All Began 26 Years Ago…..

5. Shoppers Stop 26 Years Journey and Beyond

Luxury

Bridge to Luxury

Contemporary

Popular

Mass

Premium

2009

SSL

2005

Our Transition

Bridge to Luxury Positioning

5. Shoppers Stop 26 Years Journey and Beyond

72% 69%72% 72% 72% 75% 76%

0%

20%

40%

60%

80%

100%

First Citizen Contribution to Total Sales (%)

Strong Loyalty Programme:5 million members

How will Retail Survive the Battle of the Platforms ?

• Become A Platform ?

• O2O ?

I believe that we have to go back to basics of Retail along with

• Agility

• Digitality

• Aggression &

• Add a Fifth P to the Classical Four P’s – Product |Price |Place |Promotion

• The New P is "Personal Emotion" ….

• We have adopted “Bring Back Romance To Retail”

5. Shoppers Stop 26 Years Journey and Beyond22

Blockbuster Launches

5. Shoppers Stop 26 Years Journey and Beyond

The Largest Cricket Bat @ 131 Ft!

23

High Touch Service: Personal Shopper

5. Shoppers Stop 26 Years Journey and Beyond24

Customer Value Proposition – Customer Journeys

1. Direct To Consumer Home (e Commerce)

2. Buy Online & Return / Exchange At The Store

3. Endless Aisles At The Store via Tablets

4. Express Delivery via Ship From Store

5. Dropship

6. Marketplaces & Affiliate Programs

7. Assisted Shopping At The Store via Kiosks

8. Buy Online & Try At The Store

9. Pickup @ Store OR Click N Collect

10. Pickup @ Third Party

11. International Delivery Programs

Single View of: Customer I Inventory I Orders

5. Shoppers Stop 26 Years Journey and Beyond

1. Marketplace|2. Fashion Experience Center|3. Joint Marketing Programs

Shoppers Stop & Amazon – O2O Partnership

5. Shoppers Stop 26 Years Journey and Beyond

1. Treat India like Europe due to multiple states, languages and habits

2. Indian Consumer are Global in Fashion Consumption but value it in Rupees

3. Mobile First is the Mantra for India as Mobile is:- Genie- Girlfriend- Mailman- Store- Wallet- Search Guide- Voice Assistant

4. Localize without losing identity and add experience plus Value

6. Success Factors for Retailers in India

Emerging Opportunities:How to Capture the World’s Fastest

Growing Retail Markets

Susan Tang VP of Business Development and Operations Macy’s China

Journey to China

ChinaU.S.A.

Shopping is Cultural Crossing Borders = Crossing Cultures Localization > Translation

China Market Characteristics

Source: iResearch

Mobile First

Mobile Share of Web Traffic by Country

Source: We Are SocialHootsuite

Time Spent On Internet by Country

Source: We Are SocialHootsuite

China Market Characteristics

Importance of Social Brand/Product Research &

Discovery

Product Validation

Promo Offer

Product Purchase

Post-Purchase Reviews

KOL’s (Key Opinion Leaders) New Sales Channel

Source: Kantar China CIC

Social Media Growth by Country

Source: We Are SocialHootsuite

China Market Characteristics

E-Commerce

Platform Dominance

Search Begins on

E-Commerce Platforms

Source: iResearch

57%

25%

4%

4%

1%

1% 1% 7%

Others

2016

B2C

China Market Characteristics

Search &

Ad Driven

Social

Driven

Source: Boston Consulting Group

China Market Characteristics

Shopping as Entertainment Content, Content, Content

Product Content – More Info, More Photos, Videos, Sales History,

Customer Reviews

Social Content – Short Videos, KOL Posts/Product Reviews/Weibo

or WeChat Campaigns/Social Selling/Live Streams

Seamless Experience Online to Offline, and Along the Entire

Customer Journey

“For the things we have to learn before we can do them, we learn by doing them”

Aristotle