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DISCOUNT RETAIL IN INDIA TO REACH Rs.30,000 Crore By 2012

DISCOUNT RETAIL IN INDIA TO REACH Rs.30,000 Crore By 2012

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Published by Mark Fidelman
Discounts stores which were mere dump yards for factory seconds a few years ago have emerged as a brand new business opportunity for Indian retailers. These stores no longer stock export surplus rejects and offer a great value proposition to the savvy, price sensitive Indian consumer, in price, ambience, service and overall shopping experience.
Indian Retail Business Scenerio
o Market size (total) 2006: US$ 300 bn/annum
o Market size (total) 2010: US$ 427 bn/annum
o Market size (total) 2015: US$ 637 bn/annum
o Market size (modern retail) 2006: US$ 9-12 bn
Discounts stores which were mere dump yards for factory seconds a few years ago have emerged as a brand new business opportunity for Indian retailers. These stores no longer stock export surplus rejects and offer a great value proposition to the savvy, price sensitive Indian consumer, in price, ambience, service and overall shopping experience.
Indian Retail Business Scenerio
o Market size (total) 2006: US$ 300 bn/annum
o Market size (total) 2010: US$ 427 bn/annum
o Market size (total) 2015: US$ 637 bn/annum
o Market size (modern retail) 2006: US$ 9-12 bn

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Published by: Mark Fidelman on Jun 03, 2008
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05/09/2014

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DISCOUNT RETAIL IN INDIA TO REACH Rs.30,000 Crore By2012By: Bharat Ratna
Discounts stores which were mere dump yardsfor factory seconds a few years ago have emerged as a brandnew business opportunity for Indian retailers. These stores nolonger stock export surplus rejects and offer a great valueproposition to the savvy, price sensitive Indian consumer, in price,ambience, service and overall shopping experience.Indian Retail Business Scenerio
o
Market size (total) 2006: US$ 300 bn/annum
o
Market size (total) 2010: US$ 427 bn/annum
o
Market size (total) 2015: US$ 637 bn/annum
o
Market size (modern retail) 2006: US$ 9-12 bn/annum
o
Market size (modern retail) 2011: US$ 60 bn/annum
o
Annual rate of growth (modern retail): 35%
o
Penetration (modern retail) 2006: 3 to 4%
o
Penetration (modern retail) 2010: 10%
o
Number of retail outlets (total): 12 million
Retail Space
 
o
 Typical space per outlet: 100 to 500 sq.ft.
o
Space occupied (modern retail): 35 mn sq.ft.
o
Operating Malls 2007: 114 (35 mn sq.ft.)
o
New Malls under construction: 361 (117 mn sq.ft.)
o
New space distribution: 65% (top 7 cities), 35% (tier II &III cities)
o
New space distribution (among top 7 cities): NCR 34%,Mumbai 23%, Rest 43%
 
While discount retailing is the fastest growing segment in retailworldwide, the next decade in organised retail in India will bedominated by it, said Mr R. Subramanian, MD, Subhiksha.Subhiksha is the largest Indian supermarket, pharmacy andtelecom chain, which introduced an ‘every day, low price format’in 1997. Analysts say, the opportunity in the discount retailingspace will peak at Rs 30,000 crore by 2012 and Indian retailershave massive ramp up plans to capitalise on this trend. What is adiscount store? “Any store that sells 60 per cent to 70 per cent of its merchandise at 15 per cent to 25 per cent or more, below themaximum retail price, all through the year, qualifies to be adiscount store,” said Mr Gibson G. Vedamani, CEO of RetailersAssociation of India.According to Mr Venkatesh Kumar, business head, Big Bazaar,south, discount stores are a big draw attracting footfalls from upto 50 per cent of households in the Southern markets. FutureGroup is gearing up to double its Big Bazaar footprint from 89outlets to 170 across the country, by 2009 end. Subhiksha, whichoffers up to 25 per cent discounts is ramping up from 1,380 storesto 2,200 by March 2009.“Nearly 20 per cent to 25 per cent of revenues of most brandscomes from discount sales” averred Mr Rajesh Seth, vice-president Marketing, Central & Brand Factory (Future Group).Brand Factory sells surplus merchandise of various brands atdiscounts ranging up to 50 per cent, along with great service andambience, he added. The company has plans to ramp up to 50outlets by 2010 from 6 at present.Megamart from Arvind Mills, a medium format discount storeoffering year-round discounts ranging up to 65 per cent has apresence in 32 towns with 85 outlets. It recently opened a largeformat store spanning 50,000 sq. ft in Chennai. “We are planningto open five more large format Megamarts this year, with thesecond outlet opening in Pune next month” said Mr J. Suresh,CEO, Brands & Retail Division, Arvind Ltd. Coupon Mall fromPrateek Lifestyle Ltd, is yet another large format discount malloffering discounts up to 50 per cent on over 140 brands. Present

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