R E TA I L I N G I N D U S T RY I N I N D I A

CASE STUDY:

By- Charuta Jagtap (Feb 2013)

OVERVIEW

• Retail industry, being the fifth largest in the world, is one of the sunrise sectors with huge growth potential.• It accounts for 14-15% of the country’s GDP.

Comprising of organized and unorganized sectors.• According to the Global Retail Development Index

2012, India ranks fifth among the top 30 emerging markets for retail.• The recent announcement by the Indian

government allowing 100% FDI in single brands and future scope of multi-brand FDI have created positive sentiments.

KEY MARKET SEGMENTS

• Food &Grocery• Clothing & Fashion• Beauty & Wellness• Electronics• Furniture & Furnishings• Others

RETAIL MIXTRADITIONAL & MODERN

Traditional (unorganized)

Modern (organized)

Street carts Supercenter

Pavement shops Hypermarket

Kirana dukaan Supermarket

Public distribution system Convenience store

Kiosk/Stalls Cash & carry

Weekly markets Discount store

Department store

Specialty store

Category killer

KEY INDIAN PLAYERS

BRANDS STORES

Future Groups- Formats

Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, aLL, E-Zone etc.

Fabindia Textiles, Home Furnishings, handloom apparels, jewelry

RP- Sanjiv Goenka Grp Retail- Formats

Spencer’s Hyper, Spencer’s Daily, Music World, Au Bon Pain(International Bakery Cafeteria), Beverly Hills Polo Club

Tata Group Formats

Westside, Star India Bazaar, Steeljunction, Landmark, World of Titan showrooms, Tanishq outlets, Croma

Reliance Retail Formats

Reliance Mart, Reliance Super, Reliance Fresh, Reliance Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance Autozone, iStore

BRANDS STORES

K Raheja Corp Group Formats

Shoppers Stop, Crossword, Hyper City, Inorbit Mall

Lifestyle International Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores

Aditya Birla Group More outlets

Gitanjali Nakshatra, Gili, Asmi, D’amas, Gitanjali Jewels, Giantti, Gitanjali Gifts,etc.

KEY INDIAN PLAYERS CONTD.

KEY FOREIGN PLAYERS

• Carrefour• Tata Tesco• Bharti Wal-Mart• IKEA• Starbucks etc.

IDENTIFY THE OPPORTUNITIES & THREATS THAT THE RETAILING INDUSTRY IN INDIA OFFERS TO LOCAL & FOREIGN COMPANIES.

QUESTION 1)

OPPORTUNITIES THREATS

Rising disposable income of Indian middle-class

Lack of efficient supply-chain management

Changing demographics Lack of required retail space

Changing consumer preferences and shopping habits

Shortage of trained manpower

Increase in working population Lack of proper infrastructure and distribution channels

Spurt in urbanisation A long way to meet international standards

Rise in MPCE level in urban areas No fixed consumption pattern

Retail investment Inefficient Tax structure

Low Share of Organized Retailing Competition from unorganized retailers

PREPARE AN ETOP FOR A COMPANY INTERESTED IN ENTERING THE RETAIL INDUSTRY IN INDIA.

QUESTION 2)

ENVIRONMENTAL THREAT & OPPORTUNITY PROFILE (ETOP)

Environmental Opportunities• Nominal market share of organized retail business

indicating scope for tremendous growth.• Favorable FDI policies.• The next generation Indian Consumer (younger,

higher pay, double income households, disposable income, open to western influences etc.)• Comparatively favorable political climate.• Untapped market.• Mending tax policies.

Environmental Threats• Competition from unorganized & organized

sectors.• Indian consumers are still price sensitive & rural

misconception about retail outlets being expensive.• Raising estate prices and lengthy establishing

procedures.• Need for improved infrastructure and supply

chain.• Widely heterogeneous market.• Need for better workforce management.• Threat from online shopping stores.• Inconsistent tax rates.

WAY TO INDIAN MARKETS

• Understanding consumers needs, preferences and wants• Operating stores efficiently and profitably• Serving value-aware consumers• Evolving with the market• Localising products to delight and excite Indian

consumers

BENEFITS OF ROBUST RETAIL ECOSYSTEM

• Reduce wastage• Employment• Sourcing• Benefit the farmers• Decrease in intermediaries• Increased govt. revenues• Kiranas can become franchise partners and exist

cordially with retail outlets• Better price regulation

THANK YOU