2.Retail in India

8/8/2019 2.Retail in India

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Retailing in IndiaRetailing in India


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Industry Evolution

Traditionally retailing in India can be traced to The emergence of the neighborhood Kirana stores catering to the convenience ofthe consumers

Era of government support for rural retail: Store chains run by Khadi &Village Industries Commission along with government owned PDS and CSD.

In the 1980s,Textile sector with companies like Bombay Dyeing, Raymond's, SKumar's and Grasim first saw the emergence of retail chains

During the same period, Titan successfully created a modern retailing conceptand established a series of showrooms for its premium watches

Post 2000 onwards saw an emergence of organized retail formats, mainly in urban areas, with facilities like car parking targeted to provide a complete destination experience for all segments of

society

Emergence of hyper and super markets trying to provide customer with 3 Vs -Value, Variety and Volume

FDI limited to 51 % in single brand retail only.


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Weekly Markets

Village Fairs

Mom and

Pop/Kiranas

PDS Outlets

CSD

Exclusive BrandOutlets

Hyper/Super Markets

Department Stores

Traditional Government

Supported

Historic/Rural

Reach

Modern Formats/

International

Evolution of Indian retail formats

Source of

EntertainmentNeighborhood

Stores/Convenience

Availability/ Low

Costs /Shopping

Experience/Efficiency


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Retail Market PredictionRetail Market Prediction

300

427

637

0

100

200300

400

500

600

700

US $ Billion2006 2010 2015

Source :KSA Technopak


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What are the factors driving Retail growth in

urban India ?


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Increase in working population

Increase in number of double income households

Convenience

Change in consumer lifestyle

Incentives offered by organizations to its

employees for shopping

Shopping + entertainment


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Challenges in urban retail

1. Availability of space.

2. Competition among modern retail players.

3. Competition between traditional and modern

retailers.

4. High logistics costs.

5. Changing economic environment.


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Characteristics of rural market

1. 44 % of total villages have population of less than 500, 33% of total villages are connected by pucca roads.

(McKinsey survey 2007)

2. Heterogenous market

3. Lower literacy rate

4. Majority of consumers in lower income group.

5. Brand conscious consumers.

6. Influencers include NGOs, panchayat members, teachers,

doctors, primary health workers.


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Major players include

ITCs Choupal Sagar

Triveni groups Triveni Khushali Bazaar

Shriram groups Hariyali Kisaan Bazaar

IOCs Kisan Seva Kendras

Godrej Agroverts Aadhaar

HULs Project Shakti

Mahindra & Mahindras Shubh labh stores


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Challenges faced by retailers

1. Inadequate infrastructure (roads, railways)

2. Highly dispersed and thinly populated villages.

3. Inability to make large profits on products sold.

4. Supply chain problems


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Future Outlook

1. Organized retailers to focus on Tier II and Tier IIIcities.

2. Rural retail will continue to remain a challenge unless

developed.

3. Future retail growth dependent on economicsituation and government policy.

4. Technology to play an important role in modern

retailing.

5. Customer retention strategies to play an important

role in highly competitive markets .

6. Consolidation, mergers and acquisitions to play an

important role.


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Documents

2.Retail in India