Major Retailers in India

Pantaloon: Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's first hypermarket Big Bazaar. It has the following retail segments:
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Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Shoes: Shoe Factory Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment: Bowling Co.

Tata Group Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India Landmark in 2005. Trent owns over 4 lakh sq. ft retail space across the country. RPG Group RPG Group is one of the earlier entrants in the Indian retail market, when it came into food & grocery retailing in 1996 with its retail Foodworld stores. Later it also opened the pharmacy and beauty care outlets Health & Glow.

AV Birla Group
AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments of retail. It will invest `8000-9000 crores by 2010. Retail formats in India Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories.

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Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. Departmental stores: are general retail merchandisers offering quality products and services. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. Shopping malls: the biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof. E-trailers: are retailers providing online buying and selling of products and services. Discount stores: these are factory outlets that give discount on the MRP. Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. Category killers: small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. This is also known as Multi Brand Outlets or MBO's. Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.

Challenges facing Indian retail industry

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The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options Shortage of trained manpower Low retail management skill

Retail Total retail sales in India will grow from US$ 395.96 billion in 2011 to US$ 785.12 billion by 2015, according to the Business Monitor International (BMI) India Retail Report for the secondquarter of 2011. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities. Mass grocery retail (MGR) sales in India are expected to undergo tremendous growth over the forecast period. BMI predicts that sales through MGR outlets will increase by 218 per cent to reach US$ 27.67 billion by 2015. BMI forecasts consumer electronic sales at US$ 29.14 billion in 2011, with over-the-counter

(OTC) pharmaceutical sales at US$ 2.30 billion. The former sub-sector is expected to show growth of 66.8 per cent between 2011 and 2015, reaching US$ 48.61 billion, with projected double-digit growth of key products such as notebooks, mobile handsets and TVs. OTC pharmaceuticals, meanwhile, should increase more, by 106.9 per cent throughout the forecast period, to reach US$ 4.75 billion. China and India are predicted to account for more than 91 per cent of regional retail sales in 2011, and by 2015 their share of the regional market is expected to be at least 93 per cent. BMI forecasted growth in regional retail sales at 75.2 per cent for 2011, an annual average of 14.9 per cent. Organised retail in India is expected to increase from 5 per cent of the total market in 2008 to 1418 per cent and reach US$ 450 billion by 2015, according to a McKinsey & Company report titled 'The Great Indian Bazaar: Organised Retail Comes of Age in India'. Furthermore, according to a report titled 'India Organised Retail Market 2010', published by Knight Frank India, during 2010-12 around 55 million square feet (sq ft) of retail space will be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft. Driven by the growth of organised retail coupled with changing consumer habits, food retail sector in India is set to be more than double to US$ 150 billion by 2025, according to a report by KPMG. According to the report Strong and Steady 2011 released by global consultancy and research firm PricewaterhouseCoopers (PwC), India's retail sector, which is currently estimated at about US$ 500 billion, is expected to grow to about US$ 900 billion by 2014. India has also been ranked as the third most attractive nation for retail investment among 30 emerging markets by the US-based global management consulting firm, A T Kearney in its 9th annual Global Retail Development Index (GRDI) 2010. Within Asia, India is expected to account for the third largest share at US$ 2.7 billion in 2015, according to a report released by research firm Ovum on January 12, 2011. Foreign direct investment (FDI) inflows between April 2000 and January 2011, in single-brand retail trading, stood at US$ 128.34 million, according to the Department of Industrial Policy and Promotion (DIPP).
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Carrefour, the worlds second-largest retailer, has opened its first cash-and-carry store in India in New Delhi. Germany-based wholesale company Metro Cash & Carry (MCC) opened its second wholesale centre at Uppal in Hyderabad, taking to its number to six in the country. Jewellery retail store chain Tanishq plans to open 15 new retail stores in various parts of the country in the 2011-12 fiscal. V Mart Retail Ltd, a medium-sized hypermarket format retail chain, is set to open 40

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outlets over the next three years, starting with 13 stores in 2011, in Tier-II and Tier-III cities. RPG-owned Spencer's Retail plans to set up 15-20 new stores in the country in 2011-12. Spar Hypermarkets, the global food retailing chain of the Dubai-based Landmark Group, expects to start funding its India expansion beyond 2013 out of its local cash flow in the country. So far, the Landmark Group has invested US$ 51.31 million in setting up five hypermarkets and plans to pump in another US$ 51.31 million into the next phase of expansion. Bharti Retail, owner of Easy Day storesupermarkets and hypermartsplans to invest about US$ 2.5 billion over the next five years to add about 10 million sq ft of retail space in the country by then, according to a company spokesperson. The country's largest consumer products company Hindustan Unilever is testing waters in the coffee shop market even as US giants Starbucks and Dunkin' Donuts finalise plans to tap into increasing out-of-home consumption of coffee in the country. Hindustan Unilever has opened a 'Bru World Cafe' outlet on a pilot basis at Juhu, an upmarket western suburb of Mumbai.

Policy Initiatives 100 per cent FDI is permitted under the automatic route for trading companies for cash & carry trading wholesale trading/ wholesale trading. FDI up to 51 per cent under the Government route is allowed in retail trade of Single Brand products, according to the Consolidated FDI Policy document. Permitting FDI in multi brand retail is being contemplated by the government under union budget 2011-12. FDI in multi-brand retail should be opened up as this is a capital intensive sector and the entry of foreign players will lead to greater competition in this critical sector, said Mr Hari S Bhartia, President, CII and CoChairman & Managing Director of Jubilant Bhartiya Group, in the 2011 pre-budget meeting with Mr Pranab Mukherjee, the Finance Minister. The Consumer Affairs Ministry has given the green signal to allow 49 per cent FDI in multibrand retail. It has written a letter to this effect to the Commerce Ministry. "Multi-brand retail should be permitted with a cap of 49 per cent. A significant chunk of investments should be spent on back-end infrastructure, besides logistics and agro-processing," the Consumer Affairs Ministry had said in response to the discussion paper floated by the Department of Industrial Policy and Promotion (DIPP) in June 2010 on allowing 100 per cent FDI in multi-brand retail. The Securities and Exchange Board of India (SEBI) has notified the increase in the retail investment limit to US$ 4,423 in initial public offers (IPOs). The new norms will be applicable to issues that have yet not opened for subscription. Road Ahead According to industry experts, the next phase of growth is expected to come from rural markets.

The organised modern retail segment in India will grow by over three times during the next five years (from 2010), to reach a figure of US$ 80 billion, as per consultancy firm, Technopak. India's modern consumption level will double within five years to an annual figure of US$ 1.5 trillion from the present level (taking 2010 as the reference year) of US$ 750 billion, according to Raghav Gupta, President, Technopak. Further, the luxury brand in the country is estimated to be worth about US$ 4.06 billion-US$ 4.51 billion and is expanding rapidly driven by the growing aspirations of youth and income levels in the country. Thus, major international brands are in the process of expanding their retail presence. For instance, Paul & Shark now has two stores with Hyderabad and will have few more by next year, Zegna, another Italian brand, known for its formal wear and quality suits, is also expanding and Diesel will have seven stores in the country. Ramesh Tainwala, who brought global luggage maker Samsonite into the country, has bought a 50 per cent stake in Planet Retail, which markets fashion brands like Guess, Next and Nautica from NRI businessman VP Sharma, in a bid to expand his presence in the booming retail space. In addition, the direct selling fast moving consumer goods (FMCG) segment is growing faster in Uttar Pradesh compared to markets in other states. Segment leader Amway India said it was growing by 35 per cent in Uttar Pradesh vis--vis 27 per cent pan-India.