Retail in India

Flow • Evolution of the industry Retail in India • Present scenario in retail • Key determinants of growth Opportunities. . • Policy and regulatory framework.The India Story.

Economic efficiency & quality of governance . 9%+ growth rate for 5 years prior to recent crisis •Resilient Economy – 5-6% growth at the peak of the global crisis •Opening up sectors for investment •Promising consumer markets •Significant investment in infrastructure development An Enabling Environment •Largest democracy. Stable government. Capital markets •World class IT & telecom infrastructure •A ‘connected economy’.India…Ongoing Evolution Yesterday •Socialist policies – minimal private sector role •Bureaucratic •Protected market •Small consumer markets •Underdeveloped infrastructure Today •One of the fastest growing economies . •Dominant private sector. Increasing withdrawal of government from business •Robust banking sector.

50 40 Population Median Age 44 34 25 37 38 30 20 10 0 China Russia India US Japan .8% by 2025. • Projected to reach 37.India. • Enormous consumption force: Large youth population • Largest working age population worldwide by 2050.The Landscape India: Key Facts • GDP per capita $2800 • Population 1028 mn • 2nd largest urban population: 32% of the total.

2nd largest employment generator • Key Corporate groups already have a stake in the industry.The Landscape • Retail. • The size of Organized Retail reaching US$ 85bn and US$ 262bn by 2015 and 2020 39% Organized Retail 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 81% 55% 40% 30% 20% 3% 6% 85% . • Indian Organized Retail Sector is of US$28bn in 2010. • Organized Retail penetration in India is just round 6%.India. • Retail contributes about 39% to the India GDP. • Penetration of Organized Retail is expected to reach 12% and 21% by 2015 and 2020.

• Food and groceries biggest category in total retail.India Retail Retail Performance. .Categories. • Clothing and footwear category has the highest penetration in organized retail.

India Retail .

India Retail .

The India Story.Flow • Evolution of the industry Retail in India • Present scenario in retail • Key determinants of growth Opportunities. . • Policy and regulatory framework.

. •Ranks 30 developed countries on a 100 point scale • Country Risk 35 or more in euromoney country risk score • Population 2 mn or more • GDP per capita.Opportunities Global retail development index • Asses how lucrative a country is for entering.

of Global retailers(30%) • Modern retail sales area/urban inhabitant(20%) •Market shares of leading retailers • Time factor • Calculates the time rate by which the sector is growing. .Global retail development index •Market attractiveness •Retail sales per capita(40%) •Population size(20%) •Urban Population(20%) •Business efficiency(20%) •Country Risk •Country risk (80%) •Business risk (20%) • Market saturation •Share of modern retailing(30%) • No.

. •Financing options by retail brands • Youth constitutes 60 per cent of India‘s population driving brand consciousness. • Sustained marketing efforts by brands The mindset of the Indian consumer is changing • Convenience. •High value and •Superior shopping experience.Opportunities • Infrastructure Development. • India‘s consumer class estimated to grow (from 50 million at present)to 583 million by 2025. • Growing Middle class. • Emergence of Malls and shopping plazas. • Sharp Increase in Per capita Income • US$ 348 (2000–01) • US$ 849 (2009–2010) •Easy and quick finance by the banking industry.

• 70% of Indian Households. • Two fifths of countries total consumption.Opportunities Rural Markets of India. Company Hindustan Unilever Dabur India Dish TV Category Household products Personal products Media Rural markets sales 45 40 33 . • 50% increase in per capita income in last 10 Years. • Rural Economy constitutes 45% of India’s GDP.

Opportunities India as a sourcing base India is a price-competitive sourcing base for large retail players. GAP. • Global retailers. such as Wal-Mart. are sourcing from India • Moving from third-party buying offices to wholly-owned sourcing and buying offices. Tesco and JC Penney. • Can offer competitive advantage .

• Consumer durables expected to grow at a CAGR of more than 20 • Apparel and eating out segments are expected to grow at a CAGR of more than 13 per cent .Opportunities Growth expected across product categories. Over the next 10 years: • The home improvement expected to grow at a CAGR of more than 20%.

E. Tesco (Tata) In Multi brand B2B Retailing. the foreign partner can’t sell more than 25% of its total sales to a single company .g.FDI Norms in India • India allows FDI (Foreign Direct Investment) both in single brand and multi brand retailing in different formats B2C Allowed with a cap of 51% stake with Foreign Retailer. Indian Government has planned to table the Retail FDI bill in Monsoon season in 2011 100% stake allowed with Foreign Retailer. Zara (Tata Trent). Gucci and Tommy Hilfiger (Murjani Group) B2B Single Brand Retailing NA Multi Brand Retailing Not Allowed in any limit.g. E. – WalMart (Bharti).

Challenges .

Prime Minister of India . Manmohan Singh.‛ -Dr. we need to take a firm view on opening up of the retail trade.‚We need greater competition and therefore.

nic.Retail in India: Getting organized to drive . www.indiainbusiness. Deloitte -Indian retail market: Changing with changing times.censusindia.References and sources • • • • • • • • CII and AT www.Overview of consumer and retail sectors(Feb 2010) The 2011 AT Kearney GRDI Report. Technopak report. Retail sector report by prabhudas Liladher. Retail sector report by CRISIL(Nov 2009).

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