PRESENTATION ON FOOD & GROCERY SECTOR IN INDIA
By Arijit Ghosh, Saikat Biswas, Bidyut Mondal & Rounak Basu
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OVERVIEW - SECTOR ANALYSIS
• MARKET SIZE - The food and grocery (F&G) market is the biggest retail segment in India.
• GROWTH - The total food and grocery retail market has been growing at a CAGR of 14 percent and is estimated to grow at 17 per cent per annum by 2015.
• The food and grocery segment is the highest contributor to the retail sector (60%) with minimum penetration of organized Retailing.
• Hypermarkets and supermarkets are the best suited retail structure for this segment.
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RETAIL MARKET IN INDIA
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Till 1990• HAATS, MANDIS, BANIA SHOPS
THE EVOLUTION
1990’s• APNA BAZAAR, KENDRIYA BHANDAAR
2000-2011• SUBHIKSHA , MORE , SPENCER’S
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CHANGES IN MODERN TIMES
NOT STACKED
200 Sq.Ft. LOCATION
ONLY DRY ITEMS
DAILY ITEMS ONLY
DIS.ON TOTAL COST
NO PARKING
NO LOYALTY PROGRAMS
NO USE OF TECHNOLOGY
WELL STACKED ITEMS
CLEAN ENVIROINMENT
FRESH STOCK
MORE VARIETY
LESS PRICE
PARKING FACILITY
LOYALTYPROGRAMS
BARCODE SYSTEM
TRANSFORMATION
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CURRENT SCENARIOCUSTOMER PROFILE:
Husband & wife both working
Lives in metro city or tier 1
city
Owns a Car
High disposable
income
Likes Mall Culture
Brand Conscious
Age group 20-40
Reads newspaper & Uses internet
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COMPETITOR ANALYSIS:
KIOSKS SABZI MANDI KIRANA SHOP STREET VENDORS
CURRENT SCENARIO
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INDUSTRY GROWTH RATE: Food and grocery retail industry is expected to have a grow at a rate of 30 %
2011• US $ 70 billion
2025• US $ 150 billion
CURRENT SCENARIO
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STRATEGIES EMPLOYED
STRATEGIES FOR PROMOTION: ADVERTISEMENTS
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STRATEGIES EMPLOYED STRATEGIES FOR RETENTION: LOYALTY PROGRAMS
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TECHNOLOGY USED
MODERN & NEW TECHONOLOGY: In the organized food & grocery retail COMPUTERIZED BILLING COUNTERS can be seen.
Moreover some of the big retail stores like big bazaar use modern technology AND techniques for managing their supply chain.
ENTERPRISE RESOURCE PLANNING(ERP)
VENDOR RELATIONSHIP MANAGEMENT(VRM)
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ORGANIZED & UN-ORGANIZED RETAILING
The food and grocery segment is the highest contributor to the retail sector with maximum contribution coming from traditional
retailing.
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Unorganized92%
Organized8%
Distribution
Food & Grocery
60%
Other40%
Market Segmentation
FY12 FY1602468
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1.6
8.8
Expected Sales Growth (USD Bn) •Globally, e-grocery market is growing nearly 7 times faster than on-ground format
•India is the sixth largest grocery market in the world
•Indian e-grocery market growing at a rate of 19% YoY
•30-40% of the business will be in the online retail space in the next 5 years
Source: Technopak, Deloitte report, D’Essence analysis
E- GROCERY MARKET IN INDIA
E-COMMERCE
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Indian Retail Market, $500
Bn
INTEGRATED SUPPLY CHAIN MODEL
Customer Order gets processed at WarehouseOnline Portal
Call CenterCustomer care
Online
Whole Seller Manufacturer
Procurement
Deliver it to Customer
Source: D’Essence analysis
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MARKET OPPORTUNITIES IN FOOD AND GROCERY RETAIL
• Indian household spending on food is one of the highest in the world.
• Acceptance to modern retail this sector exhibit huge untapped potential.
• Which gives a wider scope for the upcoming Retailers to tap the untapped segment.
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ETOP: Environmental Threat and Opportunity Profile
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Environmental Sectors Nature of Impact
Impact of each sector
EconomicGrowing affluence among urban consumers, rising disposable incomes & living standards
MarketOrganized sector a virtual oligopoly, overall industry growth rate not encouraging,
International Global imports growing but India’s share shrinking
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Environmental Sectors Nature of Impact
Impact of each sector
Political
Political Pressures, Local antisocial
RegulatoryGovernment assistance, such as government-backed loans and subsidies, imposing regulations that increase costs,
Social
Changes in social values and trends impact, socially responsible business practices,
ETOP: Environmental Threat and Opportunity Profile
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Environmental Sectors Nature of Impact
Impact of each sector
Supplier
Collaboration Becomes Key To Success For Retailers And Suppliers.
Technological
The difference between the winners and losers in retail increasingly comes down to one factor: tech savvy.
ETOP: Environmental Threat and Opportunity Profile
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SOME OF THE KEY PLAYERS
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Right now there is no particular type of retailer that perfectly suits the market.- Toshifumi Suzuki
THANK YOU20