Home ____ Home

Home is where the ____ is

_____ home

More than just a building

Place where you feel safe

A place that is yours

Reflects your personality

& binds a family together

Love, appreciation, happiness, hope, enthusiasm, vitality, confidence, trust, optimism = HOME

Home Retail

An emerging category

Bagful of emotions to manage

Content

• Organized Retail in India– Size and Potential– Evolution

• Home Furnishing retail– Current Status– Market Status– Growth Drivers

• Key competencies for driving growth

Organized Retail in India

Evolution and Potential

Organized Retail in India

•Total retail size becomes $570+ bn in 5 years time•Organized retail becomes $120+ bn from $35+ bn

• close to 40% CAGR

Source:- India retail Market, Changing with changing times, Deloitte

Inflection point in Indian retail

Evolution of Organized Retail: Leading the Growth…

Unorganized Market Create Awareness Increase customer expectation

Strengthen Offering Consolidation

Prior to 1980s 1980s 1990s Post 2000 2000 and beyond

US Market

•Very few national chains•Local/un-organised players

• Active housing market• New entrants

•New formats •Increase in store size M&A

Prior to 2000 2000 till now

Indian Market

•Very few national chains•Local/un-organised players

•Steady increase in housing market• Emergence of new players• Higher consumer spend• Increased customer sophistication

Source:- India Retail, BCG study

Home Furnishings Market

Overview and Structure

The Indian Home Furnishing Market

Organized6%

Unorganized94%

Organized40%

Unorganized60%

20010Market SizeINR 12,000 CR

2012E Market SizeINR 00 CR

CAGR (08-12E)Home Furnishing: 21%Organized Retail: 95%Unorganized Retail: 8%

• Share of organized retail in India at only6% of total market

• Is a relatively new phenomenon in Home Furnishing

• Currently at a stage where apparel retail was around 10 years ago

• Highly evolving segment with apparel retailers and manufacturers entering the fray

• Continues to remain a commodity in the minds of the customer

Organized Retail remains a fairly new phenomenon in home furnishing. Home furnishing, consisting of bed, bath, kitchen, dining and living accessories is expected to grow over the next few years.

Urban Market Size and Growth

Segmental Break –up of Home Furnishing Market

• Bed products remain the dominant category followed by bath – together they

account for 66% of the entire market

• The growth is expected across all segments in the market Bed53%

Bath13%

Curtains11%

Upholstery11%

Kitchen3%

Other9%

Source:- Technopak Advisers

The Retail Market Structure

The market is dominated by the unorganized sector. In the organized sector, the dominant players remain hyper markets and departmental stores.

Home Furnishing Market

Organized Sector (6%) Unorganized Sector (94%)

Specialty Home retailers

Big Box retailers

Departmental Stores

Large Format home Retailers

Multi Brand Outlets (MBOs)

Un-organized Players

Small Niche Players

Street Markets

Welspun Retail

• Store Formats: Evolving in terms of size, display and sale, location

• Entry of manufacturers and apparel retailers into the business

• Specialty Home Retailers:- @home, Homestop, Atmosphere, Welhome, Good Earth, BombayDyeing, Portico, Kurlon, Maspar, Carmichael house, Roseby etc

• Big-box (Soft + Hard Home): Home Stop, Home Centre, Home town

• Departmental Stores: Big Bazaar, Shoppers

• Large format home retailers• MBOs:- Jagdish Store,

Bharat Furnishing etc

Market Structure

Growth drivers

Demographics

Product Perception

Distribution Model

Customer

Purchasing Power

Younger v/s Ageing Population

Lower Income & Higher saving Levels V/s Higher Income & Higher Spending

Households Joint Families V/s Nuclear Families

Commodity V/s Fashion Style Statement and Brands

Mom & Pop V/s LFS, EBOs V/s Big Box

85% Women V/s Increasing Male Buyers

Buying Decision Women v/s Men V/s Kids

Household Size Families V/s Singles

Key competency areas for success in home retail

Obsessive Customer focus

• Understand and Focus on target audience

• Tailored customer marketing

• Enhanced customer experience

• Catering to life cycle value

Key competency areas for success in home retail

Brand

• From commodity to brands• continuous

innovation• Brand Value

proposition and articulation

Key competency areas for success in home retail

Process Focus

• Front end and backend• Capabilities to manage

• Farm to Consumer• Efficiency

Execution and excellence focus

• Retail is about detail

People

• Attract• Recruit• Retain

Home furnishing retail in India is a large, high growth market

•Increasing number of high income households• Disposable income increasing at 10-13% annually

•Increase in residential real estate• 40-45 Lac houses expected to be added annually

•Increasing competition, with number of retailers with different formats entering the fray

•Huge potential for growth owing to big unorganized market• 1200 Cr of Market [ only 6% organized]• CAGR of 20-30%

•Organized players are growing at a higher pace5

Source:- India Retail, BCG study

Thank You