Retail Industry Analysis Final

8/14/2019 Retail Industry Analysis Final

1/28

Retail Sector Analysis

Presented by:

SomeshBorse

Shaikh Moin

The NIS Academy, Aurangabad


2/28

12/23/09 2

INTRODUCTION

Retaillier- meaning to break the bulk

Involves direct interface with the customer

Retail industry : sales of $7.2 trillion worldwide

Every 10th billionaire in the world is a retailer

RETAILSECTOR

ORGANISEDSECTOR UNORGANISEDSECTOR


3/28

12/23/09 3

Indian Retail Scenario

Total Private Consumption Expenditure in India 450 Billion USD

Retail Sale 215 Billion USD (55%)

Organized Retail 11 Billion USD (3%)

Retailing 35% of GDP

Outlet Estimates Over 12 Million

Format Only 4% larger than 500 sq.ft.

Second Largest Employer after Agriculture(8%)


4/28

12/23/09 4

RETAIL SECTOR IN INDIA

ORGANISED

RETAILING

At present Rs 55000 croremarket

Projected growth at 25%-30%per annum

Contribution to total retailing

sales likely to rise to 9% by 2010

UNORGANISEDRETAILING

Accounts for almost 97%

of the retail sector

Dominated by traditionalforms of retailing

Commonly known asmom & pop stores


5/28

12/23/09 5

6

194

8

204

11

214

14

224

18

234

23

245

29

255

0

50

100

150

200

250300

2004 2006 2008E 2010E

Indian Retail Industry Size

Unorganised Retailing

US Dollars in

Billions

Source: The Marketing Whitebook 2006


6/28

12/23/09 6

Indian Retail

Entities established prior to 1997 -

Allowed to continue with their existing foreign

equity components.

No FDI restrictions in the retail sector pre-1997

(Foodworld )

51:49 JV between RPG and Dairy FarmInternational

Leading food retailer in India now(Mc Donalds)


7/28

12/23/09 7

RETAIL FORMATS IN INDIA

MODERN RETAIL FORMAT

Department stores (Shoppers Stop)Hyper-markets (Big Bazaar)Branded Stores (Allen Solly)

Specialty stores (Planet M)Super-markets (Foodworld)Discount stores (Subhiksha)Entertainment (Inox)

TRADITIONAL RETAIL FORMATCorner kirana storeWeekly haats

Street markets


8/28

12/23/09 8

Indian Scenario

Demographics

Population : 1105 mn

Population Growth : 1.6%

Median Age : 25 years

Urban Population : 29%

GDP Per capita (approx) : US$ 750

Souce KSA Technopak 2005


9/28

12/23/09 9

Potential of Retail in India At 271 million, one of the largest consuming base in the world, forming

27% of the total population

A high spending community below 45 years comprises 81 percent of thepopulation

Increased literacy from 44% in 1965 to 70% in 2003.

Increase in media penetration to 38-million cable-TV households and 80-million TV households in 2001.

In spite of all the above factors organized retail stands at 2-3 per cent inIndia compared to 85% in USA, 40% in Thailand, 55% in Malaysia and

20% in China


10/28

12/23/09 10

FDI ..

51% FDI allowed in single brand retailing

Opening up of certain retail sectors forforeign direct investment (FDI).

The four sectors are electronic goods,Office equipments & stationery, sportsgoods, and building equipment.


11/28

12/23/09 11

Modern retail Formats

38%

11%9%

9%

3%3% 3%4%

7%

8%

3% 2%

Clothing Textile & Fashion accessories Food & Grocery

Footwear Consumer Durables

Furniture Books & Catering Services

Watches Health & Beauty

Music & Gift Mobile Phones


12/28

12/23/09 12

MAJOR PLAYERS IN INDIA

PROMOTERS BRANDS

RPG Food World

PRIL Pantaloons,

Big Bazaar

Tata Grp Westside, Trent, CCD

K.Raheja Shoppers Stop

R.Raheja Globus

ITC Wills Life Style


13/28

12/23/09 13

Key Drivers of Retail Sector

Supply chain

Increase in income

Working women Customer analysis

Work force

Demand for global brands


14/28

12/23/09 14

Strengths

Recognition as an industry.

India tops the annual list of most attractivecountries for international retail expansion

Growing disposable income of the urban Indian

consumer.

Availability of manpower.

Technology-intensive industry.

Least saturated of all global markets studied.


15/28

12/23/09 15

Weakness

Fast changing needs of consumer FDI norms LAND & PROPERTY

Gap between supply and demand

Only Indians can own property in IndiaHigh stamp duty on propertyLease alone costs 6%-10% of sales

LABOUR LAWS

Restricted working hoursHiring part-time workers difficult

TAXESHigh corporation tax


16/28

12/23/09 16

Opportunities India is amongst the least saturated of all major global markets in

terms of penetration of modern retailing formats

Players emerging across formats and product categories

Rapid Expansion for all players

The Shopping Mall formats are fast evolving

Partnering among Brands, retailers, franchisees, investors and malls


17/28

12/23/09 17

Threats

Barriers to FDI which limits entry of globalplayers and limits exposure to bestinternational practices

Poor Infrastructure which restricts retailgrowth, creates supply chain bottlenecks

and increases wastage of farm produce 2008s economic crisis create some bad

effect on sector.


18/28

12/23/09 18

Pantaloons

Indias LARGESTRetailer 99 Outlets

25 Cities 3 mn Sq. ft. Retail Space

12,000 Employes

8,000 Customers a day Targeted sales of Rs. 9000 Crore and

30mn sq ft space by 2010.


19/28

12/23/09 19

Shoppers Stop

20 Large Departmental Stores

About 1 mn sq. ft. Retail Space

2,400 Employes.


20/28

12/23/09 20

Reliance

Rs. 30,000 cr ($ 6.67 bn) investment

expected sales of Rs. 90,000+ cr ($ 20 bn)by 2009-10


21/28

12/23/09 21

RPG

Planning IPO,

450+ MusicWorld,

50+ Spencer's Hyper covering 4 mn sq ftby 2010

Lifestyle : Rs. 450+ cr ($ 90 mn)investment in next 5 years to expand onMax Hypermarkets & value retail stores,Home & Lifestyle Centres.


22/28

12/23/09 22

Subhiksha

750 stores

Rs. 650+ cr ($ 145 mn) sales by March2007


23/28

12/23/09 23

Vishal Group

Plans include an IPO

investment close to Rs. 1250 cr ($ 278mn) by 2010,

targeting 220 outlets, taking its cumulativeretail space to 5 mn sq ft and salesturnover of Rs. 5000 cr ($ 1 bn+).


24/28

12/23/09 24

Bharati Group

Plans Rs. 31,500 cr (US$ 7 bn)investment in creating retail network in thecountry including 100 hypermalls


25/28

12/23/09 25

Foreign Players

Metro AG and Shoprite already operating

Tesco and Carrefour expected to operate soon

Wal-Mart has already sined a JV with the Bharti Group

Woolworths (Dick Smith Electronics - durable retail arm)recently started their operations through a JV with Tatas

with plans to open 60 Croma stores by 2009.

French retailer Geant is also expected to beginoperations in India soon.


26/28

12/23/09 26

Conclusion

The new culture of superstores & malls has changed the waybusiness is done.

Royal treatment for the customers.

Retail transformation has already started bringing in largerinterest from International Brands / formats.

2008s Economic crisis find out new ideas in the sector.


27/28

Hierarchy in Retail

Higher Positions

Corporate, Zonal and Regional Positions

Mid Level PositionsStore Manager, Asst. Stores Manager, FloorSupervisors, Team Leaders, VisualMerchandisers, In-store Marketing

Present Opportunities

Frontline Sales, Customer ServiceAssociates, Backhand operations

12/23/09 27


28/28

12/23/09 28

Thank You

?

Documents

Retail Industry Analysis Final