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What is Retail ??
Retail Philosophy : “ By the people, for
the people and of the people.”
Retailing involves selling products and services to consumers for their individual or family use. As the final link between consumer and manufacturers. Retailers are vital part of the business world. Retailers add value to products by making it easier to manufacture, to sell and consumers to buy.
The Indian Retail market – one of the fastest growing industries . Expected to grow from US $350 billion to US $427 billion by 2010. Accounts for about 4% of the total Retail market in India. Expected to increase to about 15-20% with the entry of a no. of corporates.
INDIAN RETAIL SECTOR
FOOD RETAILERS HEALTH & BEAUTY PRODUCTS INDIAN RETAIL SECTOR HOME FURNITURE & HOUSEHOLD GOODS LEISURE & PERSONAL GOODS DURABLE GOODS CLOTHING & FOOTWARES
Dominates the shopping baskets in India. Indian food industry forms 44% of the entire FMC. Sales growing at 9% annually. They set the growth agenda for the modern trade formats.
Food Bazaar – Kishore Biyani. Reliance Fresh – Mukesh Ambani Godrej Agrovet The Aditya Birla Group The Tata Group
THE MOBILE REVOLUTION
The Retail market for mobile phones, handset, accessories . Growing at the rate of 15-20%. Earns over US $17.33 billion per year. Users are expected to cross 220 million by the year end. 550 million by the year 2010.
Spice group plans to invest US $123.8 million in the next two years. Essar group plans to invest US $278.56334.24 million over next three years. Hyper market chains like Subhiksha have started exclusive stores for mobile retail.
RETAIL & CONSUMER CHALLANGES
Corporate governance Market value recognition Globalization / Consolidation Corporate / Brand reputation Supply chain optimization Influence of new technology Brand valuation & management Enterprise risk management Marketing effectiveness
Organized Retail will form 10% of total retailing by the end of the decade. Cultural and regional differences in India are the biggest challenge. Hyper market is emerging as the most favourable format. The arrival of multinational will further push the growth of hypermarket format.
Future group Vishal Retail ltd Reliance Retail RPG Enterprise Bata India ltd Videocon Appliance ltd DCM- Harivali kissan bazaar
"Growth has no limit at Reliance. I keep revising my vision.Only when you can dream it, you can do it."
Dhirubhai H. Ambani Founder Chairman Reliance Group December 28, 1932 July 6, 2002
RIL's Retail Project
Reliance Retail Limited, Ranger Farms Private Limited, Retail Concepts and Services Private Limited, Reliance Retail Insurance Broking Limited, Reliance Dairy Foods Limited, Reliance Retail Finance Limited, RESQ Limited, Reliance Digital Retail Limited, Reliance Service Solutions Limited.
The Mega Retail Story
A targeted sales turnover of Rs 90,000 crore (US$ 20
billion) by 2010 with a planned investment of Rs 30,000 crore over the next 5 years. RIL Set To Become World's Largest Real Estate Property Owner Retail Will Become Core Business of RIL Reliance Industries Limited is the largest and one of the fastest growing private sector companies in India. With domestic market shares ranging from 40-80%, RIL is also ranked among the top 10 producers globally, for all its major product segments.
5 Formats of Reliance Retail
Reliance Reliance Reliance Reliance Reliance Mart Fresh Digital Trends Wellness
Planning to come up with mega retail stores by sewing up real estate deals fast. Envisions a target of 100 million sq ft by 2011 to open its hypermarket business. Chosen Ahmedabad for its first hypermarket whereas the second and third hypermarkets will come up in Jamnagar (Gujarat) and Gurgaon (Haryana) in September 2007. The hypermarkets will offer a comprehensive array of digital, food, and other lifestyle products. Reliance Mart is a part of the Reliance Group’s $5.5 billion ‘farm to fork’ retail initiative, with the targeted revenues of $23 billion by March 2011.
Opening new retail stores into almost every metropolitan and regional area of India. Reliance Fresh recently (24th Jan, 2007) opened several "Fresh" outlets in Chennai, New Delhi, Hyderabad, Mumbai, Chandigarh, Ludhiana increasing its total store count to 40. According to Deccan Herald, the company is planning on opening new stores with store-size varying from 1,500 sq ft to 3,000 sq ft.
Reliance Digital is a one stop shop for all technology solution in the field of consumer electronics, home appliances, information technology and telecommunications Reliance Retail and Apple have partnered to announce an exclusive marketing and distribution deal. In major cities in India, Reliance has planned to build up a 10 iStores by Reliance Digital that will showcase Apple products. This tie up is the first alliance for Reliance Retail with an International brand.
Product Quality has been ingrained into the DNA of Reliance Trends and is integral to its mission of “Grahak Devo Bhava”. For the first time in organized retail, Reliance Trends is introducing a Made to Measure tailoring service, offering customized fits at reasonable prices. Reliance Trends is offering a homogeneous mix of private labels and brands across men’s, women’s and children’s categories. Continuing the tradition of reaching out to the middle class of the country, the current offering from Reliance Trends is easily affordable to the Indian consumer. Taking forward the vision of Shri. Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd. Reliance Trends delivers unmatched affordability, quality and choice of products and services to the consumer.
Hyderabad has become the launch pad for Reliance Retail's newest foray - Reliance Wellness The chain of 1,200 stores, to be set up in 51 cities over the next 3 years, will offer a range of health and lifestyle products. Introducing a ‘Medical Compliance Program’ for customers who are on long-term medication. Free health insurance cover under RelianceOne, the customer loyalty programme. Consultant doctors would be available at the stores.
Reliance retail opened 9 ‘fresh’ stores in NCR, target 1 trillion in revenues
Moved into National Capital region (NCR) on Jan 29 ‘07. In Noida, Greater Noida, Gurgaon, Ghaziabad and Faridabad. Within the next 3 months, Reliance wants to take the tally of these ‘Fresh’ stores to 100 in the Delhi- NCR region. Believed to have invested about Rs. 1,100 crore in this region.
Expected to invest Rs. 25,000-30,000 crore as per its plans by 2010. Plans to launch other retail formats like ‘Reliance Fresh Plus’ where people would get apparel consumer electronics, FMCG items and medicines, in addition to fresh fruits and vegetables. And a format for retailing groceries and condiments called as ‘Reliance Select’.
The Indian Story
10th largest economy in the world based on GDP 7.5% GDP growth forecasted over 2005-2007 Real estate sector growing at 30% per annum and one of the largest employer – a key contributor to GDP Residential market is 80% of the total real estate market Gap between supply and demand in residential market is 41 billion sq.ft.
The Indian Story
Real Estate in India projected to be USD 50 billion in 2008 Organized retail space demand of 40 million sq.ft. over next 3-4 years India is ranked the 5th largest retail destination across the globe Consumerism – the order of the day, which is fueling the growth in both the commercial as well as the retail sector Globalization of Indian Economy
Indian Retail Scenario
Total Private Consumption Expenditure in India – 375 Billion USD Retail Sale – 205 Billion USD (55%) Organized Retail – 6.2 Billion USD (3%) Retailing – 35% of GDP Outlet Estimates – Over 12 Million Format – Only 4% larger than 500 sq.ft. Second Largest Employer after Agriculture
Retailing in India
Emergence of modern retail formats Increased pressure on opening up FDI in retail sector Rapid Evolution of New-age Young Indian Consume Rising Incomes levels Increased Awareness Level among Consumers Exposure to International Brands Retail Space is no more a constraint for growth
Large Indian retailers
Hypermarket Big Bazaar
Giants Shoprite Star Department store Lifestyle Pantaloons Piramyds Shoppers Stop Entertainment Fame Adlabs Fun Republic Inox PVR
Categories of Indian retail
Corporate Houses Tatas: Tata Trent RPG group: Food World, Health and Glow, etc ITC: Wills Life Style Rahejas (Shoppers Stop), Hiranandani(Haiko), DLF(DT cinemas) etc. Dedicated brand outlets Nike, Reebok, Zodiac etc Multi-brand outlets Vijay Sales, Viveks ,Vishal etc Manufacturers/ Exporters Pantaloons, Bata, Weekender 28
Benefits to the government
Greater Per Capita Income
Greater Consumer Spending due to economic boom GDP Growth
Employ ment Increasing Tax Paying Population
Benefits to Govt.
Greater Exports Greater Sourcing From India
Increased Tax Revenues Reduced Tax Evasion
Malls in India
A decade ago - not a single mall A year ago - less than half a dozen Today - 40-50 malls 2 years from now – 300-500 malls
Barriers to FDI which limits entry of global players and limits exposure to best international practices Lack of industry status which restricts financing and therefore the growth and scaling is limited Poor Infrastructure which restricts retail growth, creates supply chain bottlenecks and increases wastage of farm produce
The Way Ahead
India is amongst the least saturated of all major global markets in terms of penetration of modern retailing formats Many strong regional and national players emerging across formats and product categories Most of these players are now gearing up to expand rapidly after having gone through their respective learning curves Real Estate Developers are also moving fast through the learning curve to provide qualitative environment for the consumers The Shopping Mall formats are fast evolving Partnering among Brands, retailers, franchisees, investors and malls Improved Infrastructure
The demanding assertive Indian consumer is now sowing the seeds for an exciting retail transformation that has already started bringing in larger interest from International Brands / formats. With the advent of these players, the race is on to please the Indian consumer and its time for the Indian Consumer to sit back and enjoy the hospitality of being treated like a King.
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