Retail Industry in India

• Batch No. 62
• Punam Shinde
• Shruti Lakham
• Samrat Saha
• Ameya Dhumal
Retail is like riding on a bicycle, if you
stop you will fall on the ground…
- Kishore Biyani
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive

Retail is
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive

Vibrant Creative
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive

Knowledge
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
attractive

Exciting Innovative
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive

Demanding
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
attractive
Challenging
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vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive

Attractive Multi-tasking
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
vibrant – knowledge – creative – innovative – exciting – demanding – challenging- multi-tasking –
attractive
A tale of Retail
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India
Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
The story inside
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India
Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
What is “Retailing”?
Definition: Retailing is the set of activities that
markets, products or services to final consumers for
their own, personal or household use. It does this by
organizing their availability on a relatively large scale
and supplying them to customers on a relatively small
scale.
In short “purchasing products or services in larger
volumes and sell it to many customers in smaller parts
in systematic manner”
The story Inside
What is “Retailing”?

Traditional Retailing in
India
Retail evolution in India
Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
Traditional Retailing in India
Traditional Retailing in India
Started from barter system, markets in fairs/melaas,
weekly markets
Unorganized retail markets & retailers
Small baniyas/kiranas at every corner of the road
Seller’s market
The industry getting organized since last decade
Organized Retail industry grown from early 1990
Traditional Retailing in India
Historic/Rural Traditional Reach Government Modern Formats/
Reach Supported International

Exclusive Brand Outlets

Hyper/Super Markets
Department Stores
Shopping Malls

PDS Outlets
Khadi Stores
Cooperatives

Convenience Stores
Mom and Pop/Kiranas

Weekly Markets
Village Fairs
Melaas

Source of Neighborhood Availability/ Low Shopping

Entertainment Stores/Convenience Costs / Distribution Experience/Efficiency
The story Inside
What is “Retailing”?
Traditional Retailing in India

Retail evolution in
India
Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
Retail evolution in India
Increase in the young working population
Hefty pay-packets
Migration of rural population to urban areas
Increasing working-women population
Increase in disposable income and customer
aspiration
Increase in expenditure for luxury items
Increasing use of credit/debit cards
Growth in Indian Retail market
Change in the consumers’ behavior

Change has come in the consumers behavior due to

Increased income
Changing lifestyles
Patterns of favorable demography

Consumers want to shop at a place where they can get

food, entertainment and shopping all under one roof
Key attributes of Indian Retail market
5th largest Retail market across the globe
Ranked the 2nd most emerging market
Current share in GDP is 12%
Current share in overall employment 8%
Liberalization & globalization policy
Growing at a pace of 25% p.a.
More players entering into the market
Buyer’s market
The story Inside
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India

Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
Retailing in India
Organization of industry started since early 1990
Unorganized market: Rs. 583000 cr.
Organized market: Rs. 55000 cr.
8 times growth in organized retailing between 2000-2009
Over 4000 new modern Outlets in the last 3 years
Over 50 lacs sq. ft. of mall space under development
 Retailing in India
• Top 3 modern retailers control over 7.5 lacs
sq. ft. of retail space i.e. 15% of total space
• Over 4 lacs shoppers walk through their
doors every week
• Food & Apparel dominate the share in retail
product categories
• FMCG is the fastest moving product
category
Pathway of Retail in India
Major Retailers in India
Future Group Reliance
Shopper’s Stop Nilgiris
Café Coffee Day Pyramid
Subhiksha The Loot
Westside Apna Bazaar
Planet M Spinach
Archies Lifestyle
Globus Crossword
Next D-Mart

To be continued….
 Revenue and Share of Verticals
Product category Share in USD Share in %
(million)
Food and beverages 231,951 74.41
Clothing and Textile 29,024 9.31
Consumers Durables 15,171 4.87
Jewellery and Watches 13,390 4.30
Home Décor 9,463 3.04
Beauty Care 6,854 2.20
Footwear 3,268 1.05
Books, Music and Gifts 2,610 0.84
Growth of Organized Retail in India
Share of Organized & Traditional Retail
 Formats in Indian Retail
Format Description
Branded Stores Exclusive showrooms
either owned or franchised
out by a manufacturer.
The Value Proposition
Complete range available
for a given brand, certified
product quality

Focus on a specific Greater choice to the

Specialty Stores consumer need, carry most consumer, comparison
of the brands available between brands is possible

Large stores having a wide

variety of products,
organized into different
Department Stores departments such as One stop shop catering to
clothing, house wares, varied/ consumer needs.
furniture, appliances, toys,
etc.
 Formats in Indian Retail
Format Description The Value Proposition

Extremely large self-service One stop shop catering to

Supermarkets retail outlets varied consumer needs

Stores offering discounts on

the retail price through
Discount Stores selling high volumes and Low Prices
reaping economies of scale

Larger than a supermarket,

sometimes with a Low prices, vast choice
Hyper- mart warehouse appearance, available including services
generally located in quieter such as cafeterias.
parts of the city
 Formats in Indian Retail
Format Description The Value Proposition

Small self-service formats Convenient location and

Convenience stores located in crowded urban extended operating hours.
areas.

An enclosure having
Shopping Malls different formats of in- Variety of shops available
store retailers, all under to each other.
one roof.
Retail space distribution in top 7 cities
Supply Chain Management in Indian Retail
• SCM is a channel of distribution
• SCM connects manufacturer with Retailer
• Currently SCM is fragmented in Indian
Retail market, especially in food & grocery
category
• Warehouses play crucial role in SCM
• Road, Rail & Air: key mediums in SCM
Supply Chain Management in Indian Retail
 Technology in Retail
Customer Interfacing Systems
• Bar Coding and Scanners
• Payment
• Internet

Operation Support Systems

• ERP System
• CRM Systems
• Advanced Planning and Scheduling Systems

Strategic Decision Support System

• Store Site Location
• Visual Merchandising
The story Inside
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India
Retailing in India

Recession & Retailing

Retailing go hand in hand with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
 Recession & Retailing
• Foot-falls has decreased drastically
• Supply is more Demand is less
• Low spending on Mktg. campaigns
• Customer retention has become a challenge
• Cut-throat competition to retain customer
• No affect on Food category, formats like Food Bazaar
• Adversely affected on product categories like, Luxury
items, jewellery, consumer durables, furniture, etc.
• New retail plans are kept on hold
The story Inside
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India
Retailing in India
Recession & Retailing

Retailing go hand in hand

with Indian Economy
Retailing in India down the years
Case Studies: Big Bazaar & Reliance Fresh
Retailing go hand in hand with Indian Economy
• Indian Economy:
• 2nd fastest growing economy in the world
• Potential to be the third largest economy in terms of GDP in
next few years
• Ranks high amongst the top 10 FDI destinations of the world
• Introduction of Value Added Tax or VAT and tax reforms
• High degree of professionalism and corporate ethics
• Highly educated English speaking young workforce
• Vibrant and multi cultured cities
• Huge opportunity exists, especially in semi-rural and rural areas
• Fastest growing tourist market in Asia
• Indian Retail reflects the Economic scenario of the country
The contribution of Retail sector to GDP
Retail Sector's share in GDP (in %)
12

10

8
Retail Sector's share in
6 GDP (in %)

0
India USA China Brazil
FDI in Indian Organized Retail Sector
FDI (Foreign Direct Investment)
India’s globalization & liberalization policy
has opened the doors for FDI
 Need for FDI in Indian Economy
• Brings investments, technology, management policies
and resources

• Need larger FDI to increase GDP

• Potential industries in India- Infrastructure, IT,

Automobiles, Leather, Textiles,
Gems & Jewellery, Financial sectors & Retail

• Key factors affecting FDI: Market potential &

accessibility, Political stability, Market infrastructures,
Easy currency conversion
 Why India???
• Developing economy

• Huge & diversified market

• Demand is greater

• Low salaried employees

• Low wage workers

• Abundant human resources

• Big private economy

Challenges faced by larger FDI in India
• Resource Challenge:
• Huge no. of resources in terms of manpower,
working capital, infrastructure, etc.
• Underexploited/unexploited resources in rural
areas
• Limited resources in urban areas
• Political Challenge:
• Limited support from political front
• Not encouraging policies for FDI
• Proper plan to increase FDI capital in Indian
Economy
Challenges faced by larger FDI in India
• Equity Challenge:
• Developing at very fast rate
• Development are uneven, unstructured
• More emphasis on urban areas
• Social equality & balanced growth
• Federal Challenge:
• Implementation of policies, rules & regulations
towards FDI
• Uneven Govt. policies across the country
• Benefits to certain cities & states only
Challenges faced by larger FDI in India
• Other challenges:
• Poverty reduction
• Trade liberalization
• Banking & Insurance sector liberalization

g row th
more the
e FD I ,
ore t h
M
 Benefits of larger FDI
• Improved human capital:
• Labor based industries
• More professional, trained & skilled worker
• Improves quality over quantity

• Competition effect:
• Launching new products/brands in the market
• Increasing competitions, benefits customers
• Improves standard of products/services
• Improves productivity of Indian companies
 Benefits of larger FDI
• Manufacturing employment:
• Generates employment in the industry
• Enhances productivity of labor
• Demand in the market generates more production

• New technology:
• To overcome competition, better quality of
products
• Again attracts more FDI

Larger FDI can develop rural Indian market and help to

bring socio-economic growth with stability
Employment generation by Indian organized Retail
Sector
• Current share in overall employment 8%
• Expected to increase the share to 9-10% by 2010
• The largest sector after the agricultural in terms
of employment
• Current direct employment: 4 Cr.
• Current in-direct employment: 20 Cr.
• Scope of better exposure to the international
standards
The story Inside
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India
Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy

Retailing in India down the

years
Case Studies: Big Bazaar & Reliance Fresh
 Challenges faced by Indian Retail industry
• No brand loyalty among customers
• Changing customer behavior
• Customers want to eat, shop & entertainment under
one roof
• Lack of retail space, due to high infrastructure cost
• Less Development in rural areas
• Mushrooming malls in urban areas
• Trained & skilled manpower
• Restricted FDI policies
• Discounting has become habit for customers
• Strong negotiation power of customers
 Indian Retail industry in Future
• Expected to grow @ 10% p.a. by 2010
• Expected to cross Rs. 1000 billion in terms of revenue
by 2010
• FDI will be allowed up to 51%
• Lots of big foreign players to enter in India, such as
Wal-mart, Metro, Tesco, Carrefour, etc.
• More employment generation in future
• Hypermarkets will evolve big time
• Hypermarkets will encourage entry of Transnational
companies
 Budget 2009-10
• Sustain a growth rate @ 9% p.a.
• Maintain Agriculture growth rate @ 4% p.a.
• Creating 12 million new job opportunities p.a.
• Reduce the proportion of population living below
poverty line
• Encourage Export
• Strengthen & improve economic regulatory
framework within the country
• Create a competitive, progressive and well regulated
education system
• Concentrate on pursuing an Integrated Energy Policy
Indian Retail industry in Future:
Potential markets

Hyderabad Coimbatore
Ahmedabad Mumbai
Pune Chennai
Bangalore Delhi NCR
Nagpur Luckhnow
The story Inside
What is “Retailing”?
Traditional Retailing in India
Retail evolution in India
Retailing in India
Recession & Retailing
Retailing go hand in hand with Indian Economy
Retailing in India down the years

Case Studies: Big Bazaar &

Reliance Fresh
Case Study

&
• Big Bazaar is part of India’s largest retailer “Future Group”
• Falls into a category of Hyper market
• Future Group has presence in multiple businesses in the
consumption space:
• Consumer Finance
• Capital
• Insurance
• Retail Media
• Mall development
• Logistics
• Brand Development
 Big Bazaar
• First organized mega retail store in India
• BB stores were launched in 2001 simultaneously at
Hyderabad, Kolkata & Bangalore
• Today we have more than 115 BB stores across the
country
• BB is a major success along with Food Bazaar
• Attracts at least 100 million of customer every year.
• Typical BB store offers over 1,60,000 products across
several categories.
• Changed the definition of Retailing in India
 Big Bazaar
Big Bazaar Facts
No. of stores 115+
Parent Group Future Group
CEO, Managing Director Mr. Kishore Biyani
Tagline Is se sasta aur achha kahin nahi
TG Family, especially House-wives
 Porter’s five force model
Rivalry
among
Competitors

Bargaining Threats of the

Power of Entrants
Buyer Industry
Competitiveness

Bargaining
Threats of
Power of
Substitutes
supplier
 Porter’s five force model: Analysis
Five Forces Analysis
Rivalry among Competitors Reliance Retail, Aditya Birla Group,
Vishal Retail , Bharti & Wal-mart, etc.
Threats of the Entrants FDI policy not favorable for international
players. Domestic conglomerates looking to
start retail Chains. International players
looking to Foray India.
Bargaining Power of supplier It varies depending upon the target
Segment. The unorganized sector has a
dominant position. There are few players
who have a slight edge over others on
account of being established players and
enjoying brand distinction.
 Porter’s five force model: Analysis
Five Forces Analysis
Bargaining power of buyers Consumers are price sensitive.
Availability of more choice.
Threat of substitutes Unorganized retail market, new foreign
players entering in Indian market
Success story
Organizational Value & Customer Value Matrix
Big Bazaar at BCG matrix
Big Bazaar: SWOT analysis
Marketing Mix – 7 P’s
 Marketing Strategy
Activities Target Marketing Mix

Big Wish All the population Process

Baby Registry & Married couple , Promotion

Marriage waiting for marriage.
Registry

Women Forum Women Public Relation

Interior decorator and Those customer who People

dress designer will be are very specific about
appointed in all the their decision
store.
 Marketing Strategy
Activities Target Marketing Mix

Networking through All loyal customer , E-Marketing

Internet other net user

Religion Corner All the aesthetic people Product Mix

Adhar – Rural centric 720 million consumers Place

Market across 627000 villages.

Tie up with IPL Sports lover Promotion

Improving quality of Prevailing as well as Product

Product Prospect customer.
Future Strategy
Life Cycle……..
Reliance Fresh

 Type – Super Market

 Founded - 30 October 2006
 Headquarters - Mumbai, India
 Key people - Mukesh Ambani CEO, Reliance Retail
 Tag Line - Growth Through Value Creation
 Website - www.ril.com
Organized Food Retail Chain
India….
Changing Food Behavior
Retail- A smart choice for modern women
Reliance – Contribution to Indian Economy
Retailing in India
Scope of Food in Retailing
Domestic Market Scenario
Information Flow is the key
Organized Retail: Impact on Prices
Inclusive Growth for All
Retail Mantra
J dikhta hai,
Whi bikta hai
The Re-tale begins from here...

   
Punam Samrat Shruti Ameya
THANK YOU
Punam Shinde
Shruti Lakham
Samrat Saha
Ameya Dhumal