INDIAN RETAIL SECTOR
Presented By:-
Hameed Khan
Kaleem Syed
Raees Basri
Shoaib Khan
Overview of retail in India
• The Indian retail industry is valued at $420 billion, with organised
retail cornering 4.5%. The organized pie is expected to see a growth
at a CAGR of 37 %
• India and accounts for 35% of GDP
• More than 15 mn outlets and only 4% of them have a space of more
than 500 Sq feet
• Fastest growing industry growing at a rate of 30 - 40% P.A
• Second Largest source of employment
• Divided into two parts (Organized & Unorganized)
• In 2009, it rose to 12%. It is also expected to reach 22% by end of
2010.
• Most attractive destination and 5 largest in the world
• Three types of product ( Food product, soft goods and hard goods)
• Pricing approach followed by most retailers (Cost plus pricing & retail
pricing)
• Indian consumer market today accounts over 400 mn people with
rising disposable income
Retail Formats
• Specialty stores
• E.g.: Arrow, Titan ,Levis
• Department Store
• E.g.: Pantaloon, Globus, Shopper Stop
• Supermarket
• E.g.: Food Bazaar, Reliance Fresh, More
• Convenience store
• E.g.:
• Hypermarkets
• E.g.: Big Bazaar, Hyper City
• Discount store
• E.g.: Wall-mart
• Shopping malls
• E.g.: Oberoi Mall, In-orbit Mall
• Category Specialty Store
• E.g.: Vijay Sales, Croma
• Factory Outlet
• E.g.: Provogue Outlet, Levis, Addidas
• Stop over format
• E.g.: Petrol Pumps
• Vending machine
• E.g.: Condom vending machine
Recession a Down turn
• Disappointing footfalls for retailers
• Liquidity under pressure
• Heavy interest burden
• Funding constraints
• Organized retail which was expected to touch 16 % by 2012
• From the current 5 % is likely to trace 10.4 % only
Major Players
• RPG (Goenka Group)
• Pantaloon Retail
• TATA Group
• K Raheja Co-operation
• Lifestyle International
• Reliance Retail
International Players
• Bharati Wal-mart
• Reliance Mark & Spencer
• Tata TESCO
• Future Group and Carrefour
Supply Chain
Role & Importance of Supply Chain in
India
• Shelf centric partnership between the retailer and the
manufacture
• Indian customer demands at affordable prices
• warehousing plays a major role as an aspect of supply chain
operations
• Indian organized retail sector is growing so the role of supply
chain becomes all the more important
• Ensures that the latest trends are at the store
• Helps in Managing stock or Inventory
• Gives competitive advantage
•
Strategy to Strengthen the supply chain
• Strong Infrastructure support
• Ware housing
• Cold chain
• Backward integration
• Optimize processes
Factors contributing to growth
• Booming Economy
• Rise in working population
• More nuclear family
• Urbanization
• More disposable Income in the Middle level
• Consumer aspiration
• Changing consumer behavior
Problems Faced by the industry
• Poor Infrastructure
• Man power retention and training
• Inventory Management
• Property regulation
• Sales Tax & value added Tax
• Availability and high cost of real estate
• Lack of market research
Current trend in retail
• Increase competition in the retail market
• Increase in private labels
• New product category
• Expanding to tier 2 and tier 3 cities
• Experimenting with formats
• Home décor and improvement retailing
Private Labels
• In house product
• Quality product at cheaper price
• Gives more profitability to the firm
• Gives opportunity to stand out in the market
• Help to maintain consistency in the stock
• Improves bargaining power
• International players like TESCO and Wal-Mart sell around
40- 55 % of private label
• Shopper Stop, Lifestyle, Globus,Pantaloon
FDI in Retail in India
Rural Market
Strategies to be followed
• Internal efficiency
• Resource optimization
• Manpower retention and training
• Reduce stock outs
• Increase inventory turnover
• Control shrinkages
• Store operation
• More Private Labels
• Decode Consumer behavior
• Entering into alliances
• Building a good supply chain management
• Venture into rural market
Retail industry according to
Mr.: Manu Bansal (Strategy & Research manager
Pantaloon)
• Maximum scope for home fashion furniture and food
• International players tapping the market
• Super market wont survive in long run
• Government policy are hampering the retail industry
• Cost of operation is very high
• Difficult to predict the demand
Future of retail in India
• More focus would be on the value for money
and not the lifestyle format
• Mergers & acquisitions
• Focus would be towards food retailing and
FMCG products
• Concentration on cost reduction
• Move towards tier 1 and tier 2 cities
• Increased investments towards supply chain
