A.T.

Kearney Global Retail Development Index

A.T Kearney Global Retail Development Index

20-07-2011

A.T. Kearney Global Retail Development Index (GRDI)

Published since 2002 Ranks the top 30 emerging countries for retail

development, higher the ranking more the urgency to enter the market
Identifies windows of opportunity for global retailers to

invest in developing markets.

Unique Not just which markets are bigger or richer, but

rather which are hotter and bursting with opportunity.

Focuses on opportunities for mass merchant and food
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retailers, which are typically the bellwether for modern A.Tretailing concepts in a country. Kearney Global Retail Development Index 20-07-2011

 Countries are selected on the basis of 3 criteria:

Country Risk: 35 or higher Population: 2 million or higher

Wealth: GDP per capital of more than $3000 *

* The GDP per capital threshold for countries with population more that 35 million is more flexible due to higher market opportunity.
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 GRDI scores are based on the following criteria:

Country and Business Risk (25%) Market Attractiveness (25%)

Market Saturation(30%)

Time Pressure (20%)

Retail sales per capita (40%) Country Risk (80%) Population (20%)

Share of modern retailing (30)

No of international retailers (30)

Urban Population(20%) Business Risk (20%) Business Efficiency(20%)

Modern retail sales area per urban person 20)

Market share of leaders (20)

A.T Kearney Global Retail Development Index

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The 2011 A.T. Kearney GRDI

10th edition of the Global Retail Development

Index Since 2002

The population has grown 11 percent, from 5 billion

to 5.7 billion
Retail sales per capita have risen by more than 90

percent, from $2,000 to $3,850

Retail sales space has expanded by more than 200

percent, from 40 million to 130 million square meters.

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The 2011 GRDI Ranking

A.T Kearney Global Retail Development Index

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A.T Kearney Global Retail Development Index

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A.T Kearney Global Retail Development Index

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Major findings of 2011

South America has jumped to top the index,

based largely on countries continued growth through the global meltdown. Asia has dropped in the rankings even though India and China continue to lead towards global recovery. Eight of the top 20 countries are from Middle East and North Africa in spite of political unrest and demonstrations.
A.T Kearney Global Retail Development Index 20-07-2011

India GRDI ranking trend

Market Attractivene Country ss Risk Market Saturation Time Pressure

Year

Rank

GRDI score

2008 2009 2010 2011

2 1 3 4

29 54 35.4 28.9

34 34 51.3 59.9

67 86 62.2 63.1

99 97 97.8 100

88 68 61.7 63

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A.T Kearney Global Retail Development Index

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India: The time to enter is now!

9 % real GDP growth in 2010; forecasted yearly

growth of 8.7 % through 2016

High saving and investment rates Fast labor force growth Increased consumer spending -- Indian consumers

continue to urbanize, have more money to spend on non-food purchases, and have more exposure to brands.
India's population of nearly 1.2 billion an attractive

target.
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 Organized retail accounts for 7 percent of India's

roughly $435 billion retail market and is expected to reach 20 percent by 2020.
Big-box retail, in the form of hypermarkets, has

gained prominence
Food accounts for 70 percent of Indian retail, but it

remains under-penetrated by organized retail.

Organized retail has a 31 percent share in clothing

and apparel and continues to see growth in this sector.

The home segment shows promise, growing 20 to 30
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percent per year.

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Organized Retail boom

Aditya Birla Group :100 supermarkets and 10 hypermarkets by mid-

2011.
Spencers : Add up to 25 hypermarkets through 2012.

Reliance Retail :150 Reliance Trends apparel and accessories stores in the next year.

Foreign players: United Kingdom's Marks & Spencer : 50 retail outlets in

the next five years.

Wal-Mart :12 outlets in its wholesale format by the end of 2011

Metro Group : 50 wholesale stores in the next five years. International food retailer Spar plans : 24 hypermarkets in the next two

years.

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Zara opened in Delhi and Mumbai last year

Carrefour entered Development Index A.T Kearney Global Retail India in December 2010 with its first wholesale cash20-07-2011

and-carry store and has plans to open more stores by end of 2011.

Some problems
Low Attractiveness scores can be explained by Government inefficiencies, difficulties in setting

up businesses
FDIs requiring Indian partners Huge rural markets, which are difficult to tap

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A.T Kearney Global Retail Development Index

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Seven Lessons Learnt

Lesson 1: Market selection is both art and science.

Lesson 2: Global expansion is a portfolio game

Lesson 3: Consumers in developing markets are discerning.

Lesson 4: Local competition is often stronger than it appears.

Lesson 5: The rules are different for global and national organizations

Lesson 6: Local talent is crucial

Lesson 7: Global expansion requires a long-term view. 15 A.T Kearney Global Retail Development Index 20-07-2011

THANK YOU!

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A.T Kearney Global Retail Development Index

20-07-2011