RETAIL BRAND MANAGEMENT

OVERVIEW OF INDIAN RETAIL INDUSTRY

SUBMITTED BY

PURVA AGRAWAL M/FC/09/18 FC SEM V

For example. etc. 1500 supermarkets and 325 departmental stores currently being built in the cities across India. It is on the threshold of bringing the next big revolution after the IT sector. etc. Village and Rural Melas Source of entertainment and historic reach Convenience stores. Eventually hypermarkets and supermarkets emerged. Weekly Markets. Raymonds. Crossword in books entered the market before 1995. technology. Adani Enterprise. The evolution of the sector includes the continuous improvement in the supply chain management. Retail outlets such as Foodworld in FMCG. Tata. Planet M and Musicworld in Music. Shopping malls emerged in the urban areas giving a world-class experience to the customers. Bombay Dyeing. The sector has evolved dramatically from traditional village fairs. this would finally lead to more of consolidation.OVERVIEW OF INDIAN RETAIL INDUSTRY The retail sector has been at the helm of India’s growth story. Later Titan launched retail showrooms in the organized retail sector. formats. distribution channels. Although organized retail market is not so strong as of now. Mom-and-pop / Kirana shops stores/convenience and pervasive reach . With the passage of time new entrants moved on from manufacturing to pure retailing. The economy began to open up in the 1980s resulting in the change of retailing. Retail Sector is the most booming sector in the Indian economy. During the last few years. EVOLUTION OF THE SECTOR (Past. These stores used to cater to the local people. and is estimated to show 20% annual growth rate by the end of the decade as against the current growth rate of 8. companies like Reliance. A CRISIL report says that the Indian retail market is the most fragmented in the world and that only 2% of the entire retailing business is in the organized sector. According to the Indian Council for Research on International Economic Relations (ICRIER). Major domestic players have entered the retail arena and have ambitious plans to expand in the future years across verticals. This suggests that the potential for growth is immense. have been investing considerably in the booming Indian retail sector. for example. S Kumar's. India is the seventh-largest retail market in the world. Bharti. Besides. back-end operations. the Indian retail market has seen considerable growth in the organised segment. Some of the biggest players of the world are going to enter the industry soon. The first few companies to come up with retail chains were in textile sector. mergers and acquisitions and huge investments. Eventually the government supported the rural retail and many indigenous franchise stores came up with the help of Khadi & Village Industries Commission. There are about 300 new malls. Current And Future Trends) The origins of retailing in India can be traced back to the emergence of Kirana stores and mom-and-pop stores.5%. The sector contributes 10% of the GDP. growing from strength to strength. and cities. street hawkers to resplendent malls and plush outlets. a number of transnational corporations have also set up retail chains in collaboration with big Indian companies. it is expected to grow manifolds by the year 2010.

ƒ Multiple drivers leading to a consumption boom: Favorable demographics Growth in income Increasing population of women Raising aspirations: Value added goods sales ƒ Food and apparel retailing key drivers of growth ƒ Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. With the opening up of foreign direct investment in singlebrand retail and cash–and-carry formats. Cooperatives supported /low costs/distribution Exclusive Brand outlets.e. Many single-brand retailer like Louis Vuitton and Tommy Hilfiger took advantage of this opportunity. IT is a tool that has been used by retailers ranging from Amazon. many Indian players like Shoppers Stop. Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets. of which organized retailing (i. Hypermarkets and Supermarkets. Spencer Retail ventured into the organised retail sector and have grown by many folds since then.com to eBay to radically change buying behavior across the globe. Pantaloon Retail India Ltd (PRIL). . Since liberalisation in early 1990s. modern trade) makes up 3 percent or US$ 6. a new chapter unfolded in the retail space. ƒ India is rated the fifth most attractive emerging retail market: a potential goldmine. experience/ efficiency formats/ international RECENT TRENDS                    ƒ Retailing in India is witnessing a huge revamping exercise. Wal-Mart and Tesco.PDS outlets. These were the pioneers of the organised Indian retail formats. The cash-and-carry format has proved to be an entry route for global multichannel retailing giants like Metro. ƒ More successful in cities in the south and west of India. Department stores and Shopping malls. Khadi stores.4 billion ƒ As per a report by KPMG the annual growth of department stores is estimated at 24% ƒ Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. E-tailing’ slowly making its presence felt. ƒ Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption ITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets. HLL is using its Project Shakti initiative – leveraging women self-help groups – to explore the rural market. ƒ Estimated to be US$ 200 billion. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws.

It entered the food and grocery segment in November 2006 through its convenience store format Reliance Fresh.5% share Pantaloons: The first Pantaloon store was opened at Gariahat in 1997 in 8. the south-India based retail chain.5 billion Reebok: In 1995. Bata has a strong distribution network structure of wholesalers and distributors. Carrefour. has an aggressive plan to expand its retail network across India. Later in 2005. Home Stop: Home Stop is one of the premium home improvement stores that offers a wide range of merchandise. Music World Entertainment Ltd. The first eZone store was launched in 2006 in Indore and was followed with a second one in Bangalore. Food Bazaar. The store operated at 26 locations in 12 cities as on Dec 2008.7% over the previous year. FOOD AND GROCERY: In 2007.1% share in the total retail market and was valued at Rs 160 billion while it had a 9. the showrooms were branded as Godrej Lifespace Stores. the footwear segment had a 1. In terms of total retail. Reliance Retail: Reliance Retail Ltd. Pantaloons had around 44 stores spread across major cities in India.000-square-feet area. the food and grocery segment was valued at Rs 7. Boots Group. Liberty Shoes Ltd. one each in Mumbai. ELECTRONICS In 2007. Reebok forayed into the Indian retail market. Big Bazaar. B A Lakshmi Narayana Setty founded Vivek’s in a 200-square-feet-shop in Chennai. Pantaloon Retail India Ltd. the catering service in organised retail showed a tremendous growth of 44.1% share in the organised electronic retail segment valued at Rs 71 billion. FOOTWEAR In 2007.. More: Aditya Birla Retail Ltd forayed into the retail business in 2006 by acquiring Trinethra Super Market Ltd. Bangalore and New Delhi. the company launched its own brand of stores called More. Health and Glow. In May 2007. Bata: Bata India is one of the most well-known and largest footwear retailers in India. Godrej Lifespace: On Apr 1. Tesco. Lifestyle.. etc. Viveks: In 1965. Subhiksha. Today Reebok is one of the frontrunners in the Indian sports wear industry. appliances. CATERING SERVICES In 2007.MAJOR RETAIL BRANDS SOME OF THE PLAYERS PRESENT IN THE INDUSTRY: Archies.. As on Dec 2008.920 billion. Ebony Retail Holdings Ltd. the electronics segment had a 4% share in the total retail segment and was valued at Rs 575 billion while it had a 9. Titan Industries.9% share in the organised market and was valued at Rs 77. eZone: eZone is an electronics specialty retail format from HSRIL by Kishore Biyani-led Future Group. Initially it was a part of Big Bazaar but later on it started operating as a standalone outlet in addition to being a part of Big bazzar. etc.. 2003. Shoppers Stop: Shoppers Stop is one of the largest retailers in India. Shoppers Stop. The division was established to present a new concept in retailing by displaying and selling under one roof the Godrej range of home and office furniture. a subsidiary of Reliance Industries Ltd. Today Viveks is one of the largest consumer electronics and home appliances retail chains in India. and it enjoyed a dominant market share of 62% in the total Indian retail sector Food Bazaar: PRIL ventured into food retailing with Food Bazaar in Apr 2002. HOME AND OFFICE IMPROVEMENT In 2007.1% share valued at Rs 298 bn in 2007. Style SPA Furniture Ltd. Fabmall. the home and office-related retail segment was valued at Rs 455 billion in the total retail market while it was valued at Rs 50 billion in the organised retail market.. security equipment and locks. Godrej & Boyce Manufacturing Company Ltd launched a new retail division. Bata India Ltd.. FASHION AND ACCESSORIES Fashion and accessories is the largest category in organised retail and had a 38. . It was valued at Rs 713 billion in the total retail market and at Rs 57 billion in the organised retail market. NEW ENTRANTS entering the market soon will be Reliance Retail Ltd. It primarily caters to the lifestyle segment and offers customers both domestic and international brands. Wal-Mart Stores. this category held the second position with a 9.. Home Stop currently operates three Home Stop stores. Ltd. MTR Foods Ltd. Crossword. Globus Stores Pvt.

ENTERTAINMENT In 2007.entered jewellery retailing through Tanishq.5% share and was valued at Rs 488 billion in the total retail market.3% in the total retail market. Besides. Reliance Retail Ltd.. Crossword bookstores are presently located in Mumbai.4 billion during the same period. however. the entertainment segment was worth Rs 456 billion and had a 3. The shop had more than 1. Crossword: Crossword was established in Oct 1992. JEWELLERY In 2007. entered retailing by opening up its first store in Chennai. Titan: Titan is one of the largest manufacturers of watches in India. MedPlus Health Services Private Ltd was incorporated in Hyderabad to cater into the health care segment. respectively. Nagpur. Bengaluru. Apollo Pharmacy: In 1983. Citizen Watches are also available at Lifestyle.. BEAUTY AND WELLNESS In 2007. jewellery retail merely had a 2.1% of the total retail market at Rs 164 billion in 2007. a division of Apollo Hospital Enterprise Ltd. jewellery retail was worth Rs 694 billion and accounted for 5% of the total retail market. is one of the country’s largest mobile retailers. and enterprise stores. owned by Mukesh Ambani. Reliance Wellness: In Oct 2007. New Delhi. Its share in the total retail market. As on Dec 2008. D’Damas. is India’s leading bookstore chain and a wholly-owned subsidiary of Shoppers Stop Ltd.8% share in the total retail market while it had a 3. As on Dec 2008. PHARMACEUTICALS In 2007. there were 115 Tanishq stores spread across major cities in India. store-within-a-store. Sangini. Apollo Pharmacy. there were 147 Pizza Hut and 45 KFC stores across 35 and 14 cities. integrated diamond and jewellery manufacturer and retailer in India. Gitanjali: Gitanjali Gems Ltd (GGL) is one of the largest. however. It’s a one-stop mobile solution shop that offers telecom products like mobiles. Chennai. TIMEWEAR In 2007. In the organised retail market. Vivah Gold & Kiah. music and gift retailing were the earliest segments that witnessed a consolidation of business into organised formats.promoted by the TATA Group . It has over 600 pharmacy outlets spread across 63 cities/ towns in the country. Pizza Hut entered India in 1996 and as on Dec 2008. Asmi. Citizen: Citizen has 38 exclusive outlets in 27 cities across India. MedPlus: In 2006.2% share in the total retail industry.4% share in the organised retail segment and was valued at Rs 27 billion. Shoppers Stop and more than 250 Citizen Corners (MBOs) across the country. The Mobile Store: The Mobile Store. Gold Expressions. Himalaya Drugs: The Himalaya Drug Company operates both exclusive retail outlet formats and shop-within-ashop outlets. Giantti. Nakshatra. its share in the organised retail market accounted for merely 2.PVR cinemas. there were 245 exclusive Titan showrooms (World of Titan) across 122 Indian cities in India. As on Dec 2008. Fun Cinemas. the beauty and wellness segment grew at a tremendous rate of 65% over the previous year in the organised retail market. Kolkata. promoted by the Essar Group. accessories. The combined share of this segment was 1. was just 0. McDonald’s: McDonald’s is a 50:50 joint venture partnership in India between McDonald’s Corporation (USA) and two Indian businessmen. Ahmedabad. entered the beauty and wellness segment by opening its first store at Hyderabad.300 stores spread across 200 cities as on Dec 2008. . Vadodara. Pune. the Indian watches market enjoyed a 2.3% and was valued at Rs 46 billion. Jaipur and Hyderabad. MobileNXT: Bangalore-based MobileNXT Teleservices Pvt Ltd has a pan-India presence and operates in the following three major retail formats: standalone stores. Collection G.0% share at Rs 15.9% share at Rs 23 billion. TELECOM In 2008 the telecom market in India was worth Rs 272 billion and had a 1. MUSIC AND GIFTS Books.Yum! Restaurants: Yum! Restaurants is present in India through its brands Pizza Hut and KFC. the pharmaceuticals market had a 3. Apollo was operating at over 890 outlets across the country. Its brand extensions include Gili.. BOOKS. Café Coffee Day: Café Coffee Day is a division of India’s largest coffee conglomerate Amalgamated Bean Coffee Trading Company. Inox are the major players in the entertainment retailing space.9% share in the overall organised retail market as compared with merely 0. Tanishq: In mid-1990s Titan Industries Ltd .

Rigid regulations. resource constraints at shopping mall projects are also delaying completion and disrupting many retailers’ entry strategies. along with increasing working-women population and emerging opportunities in the services sector. the concept of shopping has altered in terms of format and consumer buying behavior. shrinkage. This presents international retailing specialists with a great opportunity. and highly competitive domestic retailer groups are some such challenges. ushering in a revolution in shopping in India. These key factors have been the growth drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life . Electronics. lack of basic infrastructure. India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. Moreover. Even small towns and cities are witnessing a major shift in consumer lifestyle and preferences. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores. Appliances. it is not without challenges that could slow the pace of growth for new entrants. Even though India has well over 5 million retail outlets. high economic growth. burgeoning income and favorable demographic outline. hefty pay packets. Travel and Leisure and many more. going forward. Although the growth potential in the sector is immense. As the contemporary retail sector in India is reflected in sprawling shopping centers. However. the organised sector’s growth potential will increase due to globalisation.GROWTH AND EXPANSION OF THE INDUSTRY The Indian retail sector is highly fragmented and the unorganised sector has around 13 million retail outlets that account for around 95-96% of the total Indian retail industry. and have thus emerged as attractive markets for retailers to expand their presence. the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. supermarkets and specialty stores. This has also contributed to large-scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. hypermarkets. and changing lifestyle. real estate costs. high consumer spending over the years by the young population (more than 31% of the country is below 14 years) and sharp rise in disposable income are driving the Indian organised retail sector’s growth. entertainment and food all under one roof.Apparel & Accessories. Home & Office Products. . India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. THE TRENDS THAT ARE DRIVING THE GROWTH OF THE RETAIL SECTOR IN INDIA ARE• Low share of organized retailing • Falling real estate prices • Increase in disposable income and customer aspiration • Increase in expenditure for luxury items Another credible factor in the prospects of the retail sector in India is the increase in the young working population. high personnel costs. the Tier II cities are no longer behind in the race. The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. In India. Additionally. multiplexmalls and huge complexes offer shopping. nuclear families in urban areas. When it comes to development of retail space specially the malls. Cosmetics and Toiletries. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles.

Indian fashion industry would see the advent of fashion brand DKNY through a franchisee agreement with S. Marks & Spencer. This might leave a lot of people jobless. There are various kinds of restrictions on FDI in the Indian retail sector. AV Birla group and Future group are all gearing up for huge investments and aggressive business strategies. . another organization known as Starbucks has expressed its interest in opening up outlets in India through franchising.ENTRY OF FOREIGN RETAIL BRANDS IN INDIA Major retail players like Walmart. such as small size of operations. Kumar's. Reliance Retail has announced its plan to open 5000 stores over the next 5 years. At present. Starbucks and Walmart have put forward their FDI proposals to the government. sports goods and construction and stationery. Franchising and Cash and carry wholesale trading. McDonald's. labour and real estate problems. Big players like Reliance Retail. Many companies like Lee Cooper. cultural and educational constraints would have to be considered if the sector truly desires to achieve the kind of future it has planned for itself. The recent initiatives taken by the government to open up the sector for foreign players have lured many companies to enter the industry. infrastructural. Tesco. etc. They also suffer from capital shortage. building. Encouraged by the huge success of Pizza Hut. Carrefour. the 12 million mom-and-pop and kirana stores dominating the retail landscape suffer from certain limitations. low cost format and pervasive use of tax evasion techniques. The government has allowed 51 percent foreign direct investment (FDI) in single brand retail outlets. In the food & beverages sector. and Dominos. Some experts believe that the influx of major retail chains would wipe out millions of these shops. Walmart-Bharti combination. The government is considering the introduction of multi brand specialty formats like consumer electronics. but organizations can enter the industry through Strategic License agreements. Nike. political. are going to foray into the booming retail industry in India. Legal. Tommy Hilfiger. McDonald's is going to penetrate the markets through 100 new outlets across the country.

such as small size of operations. Starbucks and Walmart have put forward their FDI proposals to the government. They also suffer from capital shortage. building. This might leave a lot of people jobless. At present. The government is considering the introduction of multi brand specialty formats like consumer electronics. The government has allowed 51 percent foreign direct investment (FDI) in single brand retail outlets. labour and real estate problems. infrastructural. the 12 million mom-and-pop and kirana stores dominating the retail landscape suffer from certain limitations.gearing up for huge investments and aggressive business strategies. Legal. . cultural and educational constraints would have to be considered if the sector truly desires to achieve the kind of future it has planned for itself. political. low cost format and pervasive use of tax evasion techniques. Some experts believe that the influx of major retail chains would wipe out millions of these shops. sports goods and construction and stationery. Many companies like Lee Cooper. Reliance Retail has announced its plan to open 5000 stores over the next 5 years.

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