Retail Industry with reference to India

By Yogesh Kende
Yogesh.kende@gmail.com

Introduction
Retail: Derived from the French word “retailer” means To cut off a piece or to break bulk. Retailer: Defined as a dealer or trader who sells goods in small quantities, or one who repeats or relates. Retailing: The last stage in movement of goods or services to the consumer. Retailing can thus be defined as consisting of all such activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use. •Retail comes from the French word retailer which refers to "cutting off, clip and divide" in terms of tailoring (1365). •It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French).

Basic concept of retailing
• Retailing is the set of business activity that adds value to the product and services sold to consumers for their personal or family use • Retailing - the last link in the Supply Chain • Desired Product - Desired Sizes - Desired Times. • Retailing covers diverse products such as foot apparels, consumer goods, financial services,Jewellery, etc. • Retailing involves selling many different products and services, either from a store location or in direct selling through vending machines and in-home presentations, mail order, and so on. • First retailers in India include BATA, Pantaloon, Bombay Dyeing. The current Retail scenario is controlled by the likes of shoppers stop, Big Bazaars.

Functions of a retailer
• From customers point of view, retailer serves by providing goods that he needs in the required assortment and at the right place and time. From an economic standpoint the role of a retailer is to provide real added value or utility to the customer.

This comes from five different perspectives 1. First utility arises from the need of providing a finished goods and services in the form that is acceptable to the customer 2. The retailer performs the function of storing the goods, and providing us with an assortment of products in various categories 3. The retailer creates time utility by keeping the store open when the consumers prefer to shop 4. By being available at a convenient location he creates place utility 5. Finally when he products are sold ownership utility is created

Contd…

All these are real benefits which the Retailer offers by 1. 2. 3. Being close to potential customers Fully understanding the motivating factors that drive their customers By serving the consumers by way of functioning as a marketing intermediary and creating time, place and ownership utility

The Retailer also serves the manufacturers by 1. 2. 3. 4. Performing the function of distributing the goods to the end users Creating a channel of information from manufacturer to the consumer By serving as a final link in the distribution chain Recommending products where brand loyalty is not strong or for unbranded products.

The Retailer’s Role in the Sorting Process (link to Mkt. Mix)

Special Characteristics Affecting Retailers

Small average sale

Impulse Purchase

Retailer’s Strategy

Popularity of stores

Porter’s Five Force Model

Threat of Entry

Supplier Power

Rivalry

Buyer Power

Threat of Substitutes
8

Threat for New Entrants
Factors Economies of Scale Capital Requirement Cost Advantage Differentiation Expected Retaliation from existing firms Industry status Tax and Licensing Cost of Real Estate Organized High High High Low Low High High High Un-organized Low Low Low Low High Low Low Low

9

Bargaining Power of Suppliers
Factors Low Supplier Concentration Differentiation Switching costs Forward Integration Retail Industry an Important Buyer Suppliers’ product not an important input for the buyer’s business Space Availability Organized Low Low High High Low Low Un-organized Low Low Low Low High Low

Low

Low

10

Bargaining power of buyers

Factors Quality Conscious Price Sensitivity

Organized low High

Un-organized High Low

11

Threat of Substitutes
Factors Product-for-product Substitution Substitution of Need Generic Substitution Organized Low High Low Un-organized Low Low Low

12

Rivalry among existing competitors
• • Brand loyalty rather than store loyalty Organized retail v/s Organized retail e.g. Big Bazaar Sasta aur accha kahin nahin"

"Is se

• • •

Unorganized retail v/s Unorganized retail Organized v/s Unorganized retail Supermarket retail chains sell quality products offered at substantial low price as compared to the mom and popshops.

13

Organized : Retail Sector
High

New Entrants
Low Low

Suppliers Power

Rivalry
Low

Low

Buyers Power

Substitutes

14

Unorganized : Retail Sector Low
New Entrants
Low High

Suppliers Power

Rivalry
Low

High

Buyers Power

Substitutes

15

Internal
• Retaining qualified manpower • Implementing SOP’s & best practices • Focus on improving operational efficiency • Cost control • CRM & Service levels

External
• High real estate cost • Anarchic laws • Shortage of qualified manpower • Unorganized & poor supply chain

16

Impact of slowdown

Source: in.kpmg.com

Impact of slowdown on key parameters

Strategies to help cope with the recession

Contd…

Some of our thoughts on future outlook and how it may impact behavior in retail sector are as follows:

Contd…

Industry Wise Impact

Organized retail penetration gap created by slowdown

Disappointing Footfalls

Margin contraction- Interest burden adversely impacts profits

“The slowdown and delay in development of quality malls have hindered our expansion plans to a large extent.” -- Amit Kumar, Head, Retail, Fashion@bigbazaar

Mistakes by retailers have also added to external troubles
• • • Crowding in unattractive locations Inability to compete with traditional retail Over reliance on debt

Real Estate Costs

Revenue Sharing Model

Entering into alliances and leveraging expertise
Retailers can also consider entering into an alliance with: 1.A retailer from the same channel 2.A retailer from a different channel 3.Vendors 4.Back-end service providers like third party logistics players and IT service providers

Contd…

Retail Industry : Updates 2010

Source:http://www.indiainbusiness.nic.in/industry-infrastructure/servicesectors/retailing.htm

The remarkable world of retail
• Retail is currently the biggest industry in the world with sales of $7.2 trillion • Every 10th billionaire in the world is a retailer.

Indian retail sector
• The Indian retail market is a Rs. 9,00,000 crore industry and is growing at a rate of 8.5% pa. The Indian Retail sector is very unorganized, fragmented and with a rural bias.

RETAILING - Overview
• The attitudinal shift of the Indian consumer in terms of "Choice Preference", "Value for Money" and the emergence of organized retail formats have transformed the face of Retailing in India. With a growth over 20 percent per annum over the last 5 years, organized retailing is projected to reach US$ 23 Billion by 2010. The Indian retail industry though predominantly fragmented through the owner -run " Mom and Pop outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, namely Pantaloon Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International. Given the attractiveness of the Indian retail sector, foreign retailers like Wal-Mart, Carrefour SA, Europe's largest retailer and Tesco Plc, the UK's largest retailer, were keen to enter this growing market, despite the Indian retail sector being closed to foreign direct investment (FDI). In the last few years, Indians have gone through a dramatic transformation in lifestyle by moving from traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and taste. Modern retailing satisfies rising demand for such goods and services with many players entering the bandwagon in an attempt to tap greater opportunities.

The Growth Drivers
The Indian Retail growth can be attributed to the several factors including : •Demography Dynamics: Approximately 60 per cent of Indian population below 30 years of age. •Double Incomes: Increasing instances of Double Incomes in most families coupled with the rise in spending power. •Plastic Revolution: Increasing use of credit cards for categories relating to Apparel, Consumer Durable Goods, Food and Grocery etc. •Urbanization: increased urbanization has led to higher customer density areas thus enabling retailers to use lesser number of stores to target the same number of customers. Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of scale. •Covering distances has become easier: with increased automobile penetration and an overall improvement in the transportation infrastructure, covering distances has become easier than before. Now a customer can travel miles to reach a particular shop, if he or she sees value in shopping from a particular location.

Technology in Retail
Over the years as the consumer demand increased and the retailers geared up to meet this increase, technology evolved rapidly to support this growth. The hardware and software tools that have now become almost essential for retailing can be into 3 broad categories. Customer Interfacing Systems 1.Bar Coding and Scanners - Point of sale systems use scanners and bar coding to identify an item, use pre-stored data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a new concept where the consumer pushes the full shopping cart through an electronic gate to the point of sale. In a matter of seconds, the items in the cart are hit with laser beams and scanned. All that the consumer has to do is to pay for the goods. 2.Payment - Payment through credit cards has become quite widespread and this enables a fast and easy payment process. Electronic cheque conversion, a recent development in this area, processes a cheque electronically by transmitting transaction information to the retailer and consumer's bank. Rather than manually process a cheque, the retailer voids it and hands it back to the consumer along with a receipt, having digitally captured and stored the image of the cheque, which makes the process very fast.

Contd…
3. Internet Internet is also rapidly evolving as a customer interface, removing the need of a consumer physically visiting the store. Operation Support Systems 1. ERP System Various ERP vendors have developed retail-specific systems which help in integrating all the functions from warehousing to distribution, front and back office store systems and merchandising. An integrated supply chain helps the retailer in maintaining his stocks, getting his supplies on time, preventing stock-outs and thus reducing his costs, while servicing the customer better. 2. CRM Systems The rise of loyalty programs, mail order and the Internet has provided retailers with real access to consumer data. Data warehousing & mining technologies offers retailers the tools they need to make sense of their consumer data and apply it to business. This, along with the various available CRM (Customer Relationship Management) Systems, allows the retailers to study the purchase behavior of consumers in detail and grow the value of individual consumers to their businesses.

Contd…

3. Advanced Planning and Scheduling Systems APS systems can provide improved control across the supply chain, all the way from raw material suppliers right through to the retail shelf. These APS packages complement existing (but often limited) ERP packages. They enable consolidation of activities such as long term budgeting, monthly forecasting, weekly factory scheduling and daily distribution scheduling into one overall planning process using a single set of data. Leading manufactures, distributors and retailers and considering APS packages such as those from i2, Manugistics, Bann, MerciaLincs and Stirling-Douglas. Strategic Decision Support Systems 1. Store Site Location Demographics and buying patterns of residents of an area can be used to compare various possible sites for opening new stores. Today, software packages are helping retailers not only in their location decisions but in decisions regarding store sizing and floor-spaces as well.

Contd…

2. Visual Merchandising The decision on how to place & stack items in a store is no more taken on the gut feel of the store manager. A larger number of visual merchandising tools are available to him to evaluate the impact of his stacking options. The SPACEMAN Store Suit from AC Neilsen and ModaCAD are example of products helping in modeling a retail store design.

Investment Opportunities
• Potential For Investment: The total estimated Investment Opportunity in the retail sector is around US$ 5-6 Billion in the Next five years.

Location: with modern retail formats having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5 years. Sectors with High Growth Potential: Certain segments that promise a high growth are – Food and Grocery – Clothing – Furniture and Fixtures – Pharmacy – Durables, Footwear & Leather, Watch & Jewellery

Contd…

Fastest Growing Formats: Some of the formats that offer good growth potential are: – Specialty and Super Market – Hyper Market – Discount stores – Department Stores – Convenience Stores and E-Retailing Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain and Logistics. Rural Retail: Retail sector offers opportunities for exploration and investment in rural areas, with Corporates and Entrepreneurs having made a foray in the past. India's largely rural population has caught the eye of retailers looking for new areas of growth. Wholesale Trading: wholesale trading also holds huge potential for growth. German giant Metro AG and South African Shoprite Holdings have already made headway in this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively.

• •

Major Formats of In-Store Retailing
Format Branded Stores Specialty Stores Department Stores Description Exclusive showrooms either owned or franchised out by a manufacturer. Focus on a specific consumer need, carry most of the brands available Large stores having a wide variety of products, organized into different departments such as clothing, house wares, furniture, appliances, toys, etc. The Value Proposition Complete range available for a given brand, certified product quality Greater choice to the consumer, comparison between brands is possible One stop shop catering to varied/ consumer needs.

Supermarkets Extremely large self-service retail outlets

One stop shop catering to varied consumer needs

Contd…
Discount Stores Stores offering discounts on Low Prices the retail price through selling high volumes and reaping economies of scale Larger than a supermarket, Low prices, vast choice sometimes with a warehouse available including services appearance, generally such as cafeterias. located in quieter parts of the city

Hyper- mart

Convenience Small self-service formats Convenient location and stores located in crowded urban extended operating hours. areas. Shopping An enclosure having different Variety of shops available to Malls formats of in-store retailers, each other. all under one roof.

Retailing Reality with reference to India

Source: Cushman & Wakefield Research

Commercial Submarket

Change in Retail Real-estate Rentals
NR C Khan Marke t S outh E ntion I & II xte Karol B h ag C annaug Place(Inne C ht r ircle ) L inkingR oad Ke psC m orne / B ach C r re andy C olaba C ause ay w L okhandw / A ala ndhe ri N am ung bakkamH h R ig oad Khade N az R r aw oad A dyar Main R oad Park S e tre t C ac S e am tre t E in R lg oad Jublie H e ills B anjara H ills MGR oad MGR oad B adeR rig oad Jayanag 4th block ar, CGR oad L G aw arde n S arke G g andhinag H hw ar ig ay MGR oad Kore aon Park g 855 562 270 540 495 360 337 270 90 135 90 225 225 180 135 135 90 180 360 180 90 45 45 180 135 -34% -40% -39% -28% -61% -60% 63% 23% -28% -25% -33% -9% -9% -18% -35% -40% -27% -25% 0% -23% -42% -46% -41% -43% -33%

Mum bai

C nnai he

Kolkata

H rabad yde

B alore ang

A e hm dabad

Pune

Change in Retail Real-estate Rentals- Malls
C ie it s NR C L c t n P eM inSre t o a io : rim a t e N id a a G rg o u an S uhD lh ot e i W s D lh et e i L w r P re o e a l G re a n o go G ak p r htoa C e n i C nra hn a et l C e n i Wse h n a e t rn C e n i S uh hn a o t S uhK lk t o t o aa S ltL k a ae R ja a a rh t E inR a lg o d N RG rd n T a es H a ah a a imy t n g r B n raH ( o dN 1 a ja ills R a o ) K ra a g o mn la M g t Ra a ra h o d C n in h m o d u n ga Ra V t l M lly R o it a a a a d V s ra u at p r S H ha G ig w y D e -R a riv -in o d M Ra G od B n g rd n ud a e G n s K in R a a eh h d o d R na Q ( 0 9-e t l: 3 2 0 ) N to C rp tA a e f a e re ( r/s .ft In q ) 20 7 25 2 45 0 25 2 40 5 20 7 25 2 10 8 15 3 9 0 25 2 30 6 9 0 27 4 9 0 9 0 15 3 30 6 22 9 10 8 35 1 9 0 4 5 4 5 20 7 10 8 12 1 % h n einR na Ca g et l ( ya a o 1 er g) -3 % 3 -3 % 6 -3 % 2 -4 % 4 3% 1 -4 % 9 -3 % 7 -2 % 8 -2 % 6 -4 % 0 -2 % 0 -4 % 7 -3 % 4 -2 % 9 -3 % 6 -4 % 1 -1 % 8 -1 % 4 -1 % 1 -7 % -5 % 3 -6 % 1 -3 % 7 -2 % 9 -3 % 8 -3 % 3

M ma u bi

Cen i hn a

K lk t o aa

H d ra a ye bd

B n a re a g lo

A md b d h ea a

Pn ue

Main consideration for creating a successful Mall – Stage by Stage analysis

Contd…

Mall Supply at PAN India Level

Current distribution of Mall space by City Type

Break up of Mall space by format by 2013 - 2014

Additional Mall Space Requirement by 2013 - 2014

India: Consumption

Size of Consumption in India
GDP US$ 1,161 Billion

Private Consumption US$ 680 Billion – 59%

Public Spending & investment US$ 481 Billion – 41%

Retail US$ 435 Billion – 64%

Non Retail US$ 245 Billion – 36% Rural US$ 234 Billion – 54%

Urban US$ 201 Billion – 46%

Organised Retail US$ 21 Billion – 64% -10% of Urban

Organised Retail Negligible

India: Consumer Spending, 2009
S.No

Consumer Spending (excluding Size in 2009 Size in 2014 (in US$ (in US$ institutional and govt. billion) billion) spending)
Food and Grocery Healthcare Apparel and home textiles Education (K-12, Higher education & vocational Telecom Jewellery & Watches Personal transport (vehicles + fuel + repairs) Travel and leisure Consumer durables and IT Products Home (furniture, furnishing etc.) Personal care Eating out Footwear Health and beauty services 260 34 32 28 25 25 240 12 11 10 10 5 4 1 325 55 43 45 41 34 37 20 17 15 14 7 5 2

Likely Ranking in 2014 1 2 4 3 5 7 6 8 9 10 11 12 13 14

1 2 3 4 5 6 7 8 9 10 11 12 13 14

1991
1. 2. 3. 4. 5. 6. 7. Food and Grocery Clothing Footwear Consumer Durables Home Linen Movies and Theatre Eating Out

Categories of 2009Consumption
1. 2. 3. 4. 5. Food and Grocery Clothing Footwear Consumer Durables Expenditure on DVD and VCD's 6. Home Linen 7. Home Accessories 8. Accessories 9. Gifts 10. Take-away/RTE meals 11. Movies and Theatre 12. Eating Out 13. Entertainment Parks 14. Mobile Phone and Services 15. Household Help 16. Travel Packages 17. Club Membership 18. Computer Peripherals and Internet 19. Personal Transport

2015
1. 2. 3. 4. 5. Food and Grocery Clothing Footwear Consumer Durables Expenditure on DVD and VCD's 6. Home Linen 7. Home Accessories 8. Gifts 9. Take-away/RTE meals 10. Movies and Theatre 11. Eating Out 12. Entertainment Parks 13. Mobile Phone and Services 14. Household Help 15. Travel Packages 16. Club Membership 17. Computer Peripherals and Internet 18. Beauty and Spa 19. Gaming 20. Personal Transport 21. Coaching/Training/ Learning

Size and Scale of Modern Retail
60 0 50 0 40 0 30 0 20 0 10 0
200 5 Total Retail Sales 200 9 201 4 Organised Retail

GDP US$ 1,161 Billion
• Next (Videocon) • The Mobile Store (Essar) • Apollo Pharmacy, Guardian Lifecare, Medplus • Tanishq, Gitanjali (jewellery) • Reebok, Nike, Adidas (footwear, clothing and accessories), Esprit, Tommy Hilfiger, Raymond and many others • Welhome, Roseby's (Home furnishings) • Fabindia • Ethos (watches) • Carplus (car accessories) • Landmark (bookss, music and gifts) • Carnation (car repairs and servicing) • Mom & Me (Mahindra & Mahindra), Mothercare (mother and child) • Brands' own stores (LG, Sony, Samsung; tiles/paints/home hardware companies etc.)

Off-beat Jobs in India
Event Management SFX and computer graphics Wellness Management Content Writer Cell-phone games programmer Tour management Bartender DJ 22% 18% 15% 15% 11% 11% 4% 4%

Off-beat Jobs in India
High sense of responsibility More trustworthy Can handle pressure Tidy and methodical Meet deadlines Can analyse effectively Can multitask Maintain harmony Good communicators Fast learners 89% 81% 80% 77% 76% 75% 75% 68% 61% 61%

Size and Scale of Modern Retail
Category
Refined edible oil Beverages Packaged atta Washing powders Shampoo Skin creams Packaged tea Chocolate Toilet soaps Biscuits Other All India

Contribution of Organised Retail to Total Sale
9% 8% 8% 7% 7% 6% 5% 5% 4% 3% 5% 5%

Companies with high Focus on Franchisee Stores
Companies
KidZee Adidas Raymond’s Domino’s Pizza McDonald’s Baskin Robbins World of Titan Koutons Retail Liberty Reebok Archies Khadim’s Numero Uno Subway

Total No. of Stores
697 500 453 270 160 300 274 1400 570 50 550 481 120 145

Companyowned Stores
10 10 59 70 150 100 150 55 69

Franchised Stores
697 500 453 270 160 290 264 1341 500 700 450 331 65 76

%age of stores Franchised
100% 100% 100% 100% 100% 97% 96% 96% 88% 82% 82% 69% 54% 52%

Population by Income Class
3.7 21.5 1178
1%

Luxurieted [>USD 100K] Future Potential [USD>50K] Other [<USD 50K]

13% 15%

1.8 9.3
CAGR 200713

2 10. 7 1104
200 8

1104
200 7

2013E

Size and Scale of Modern Retail
Brand Mont Blanc Tag Heuer Canali Salvatore Ferragamo Hugo Boss Fendi Moschino Versace Gucci Year of Entry 1995 2003 2004 2005 2003 2003 2005 2006 2007 Current No. of Stores 16 9 5 5 3 2 2 2 2

Player

Public-Private Partnership Options
Segment Products

Hindustan Unilever Limited (HUL)

Beverages, staples, Dairy, Snack Foods Dairy, Beverages and Snack Nestle India Pvt. Ltd. Foods ITC Ltd. Pepsico Dabur India Ltd. Staples and Snack Foods

Tea, Instant coffee, biscuits, ice creams, salt, w flour (atta), instant drinks, soups, jam and squa Instant coffee, condensed milk,dairy whitener, infant food, choco-lates and confectioneries Wheat f;our (atta), salt, ready-to-eat meals, biscuits, confectioneries, snacks and cooking p

Beverages and Snack Foods Fruit Juices, cereals, snack foods, dairy derivati Beverages and Culinary Products

Fruit juice, cooking pastes, coconut milk, tomat puree, lemon drink, chilli powder and honey Chocolates, hard-boiled confectionery, maltfoo Cadbury India Ltd. Confectionery cocoa and papads Sweets, namkeens, syrups, crushes, chips and Haldiram Marketing Pvt. Ltd. Foods Snack papads Biscuits, flavoured milk, dairy whitener, ghee, Britannia Industries Ltd. Bakery Products bread, cake and rusks Edible oils, vanaspati, bakery fats, fruit drinks, Godrej Industries Ltd. Beverages And Staples nectar, fruit juices and tomato puree Beverages, Bottled Water and Parle Agro Private Ltd. Snack Foods

Outlook for the Food and grocery •The food and grocery market will continue to grow at a real Market growth rate of~4.1 per cent in the next 5 years

• Organized F&G will grow from – Us$ 3 billion in 2008 to – US$ 19 billion by 2014 at a CAGR of 33 per cent • F&G retail is dominated by the unorganized sector, with – 98 per cent of the market being local kirana stores • Packaged food is 4 per cent of the F&G market. RTE/ frozen food share is less than 1 per cent of the packaged food market at US$ 64 million • 2,800 organized retail outlets catered to F&G in 2008. The bulk of these are supermarkets (87 per cent) followed by hypermarkets (13 per cent) • Total organized F&G space was – 20 million sq.ft. in 2009, of which 60 percent were hypermarkets and 37 percent supermarkets • Between 2004 and 2008, the number of outlets grew by 68 per cent CAGR< while space grew by 70 per cent CAGR • The key decision-maker for food and grocery shopping for the household still remains the housewife in95 per cent of all cases Key implications: Supermarkets/ hypermarkets and Cash & Carry formats will fuel F&G organized retail in India. Larger formats like cash & Carry and Hypermarkets can be significant sales contributors for the frozen food

The New Price-Fashion Continuum

High

Fashionability

Fashionability

o rop ZA Ae le a H& RA st rim M P ark
Price Wal Mart Warriors Tesc o

Ralph Lauren Lizclaiborne Loyal Brands

High

e alu ilers V ta Re
Price Warriors

Loyal Brands

Low

Price Index

High

Low

Price Index

High

Wal-Mart

Tesco TJX Companies Ross Stores Inditex H&M Fast Retailing Primark (UK) New Look Aeropostale The Buckle Gap Limited Brands Nordstrom VF Dillard’s Polo Ralph Lauren Shimamura Lizclaiborne Abercrombie & Fitch American Eagle Urban Outfitters Columbia Sportswear

10% 10% Price Warriors Value Retailers Brands 30%

Sales Growth of the Top Retailers

Enrolment of Women in Different Faculties

Faculty/ Year

Type of Activity of Usually Employed Urban Women
10 0 80 60 40 20 0 26.6 1.5 9.1 ` 3.1 26.7 3.5 1.3 10.0 ` 4.1 24.7 35.9 1.4 12.2

(All figures in %) Other services Transport & communication Trade, hotel & restaurants ` Construction Manufacturing Agriculture

` 3.8
28.2

31.0

24.7

18.1

198384

199394

200405

Women in the Workforce

5mn = Organised female workforce(4 %) 127mn = Female working opulation(32%)

7-10mn = Organised female workforce(4. 6%) 168mn = Female working opulation(35%)

402mn = Working population (39%)

480mn = Working population (40%)

1029mn = Total Indian Population

1200mn = Total Indian Population

2001

2009

Outlook for the Food and grocery Market
350 300 250 200

US$ billion

150 195 216 237 266 277 288 298 307 316 326

100 50 0

2005

2006

2007

2008

2009 P

2010 P

2011 P
Organised

2012 P

2013 P

2014 P

Traditional or Organised

Best Practices to Support Women at Work
14%

Surveys (Internal and external)
27% 25% 23%

Creche for kids parenting workshops Women’s forum

Women’s lounge/recreation

18%

Round tables across groups/regular communication 50 %

Health & wellness awareness program

Anti-sexual harassment policy 68% Transportation policy 55% Flexible work schedules/ hour 68% Flexible leave policy 64% 18%

Team management 20 30 40 50 60 70 80

0

10

Incidence of Vocational Training
2 4 1 (All figures in %) No vocational training Received formal vocational training Received informal vocational training Receiving formal vocational training

93

Education Profile of Indian Population
7 0 8 0

5 5 2 0 6 6 3 5

Graduatio Completed Completed Completed Completed Completed All n & above Diploma Higher Secondary Middle Primary Literates Secondary

Incidence of Vocational Education and Training: Difference in Urban and Rural India

7 6

3 2 1 0.6 15-19 years 2

3 2

Total Urban Rural

20-24 years

25-29 years

Sales Growth of the Top Retailers
Land
Government

Infrastructure, Operations
Private Player

Funding
Private Player Alumni Donors

Salient Features
•Land made available by Government •Same stature as Harvard / Kellogg •Focus on research and development •Create funding through corpus and endowment

Opportunity
•Brand-building for generations •Imparting international standard high-quality education •Create institution to attract talent and location of business

Investments
•Land: 500-700 acres •Number of graduates: 15,000-17,000 by end of 10 years •Funding through corpus built by corporate donors and investors •Capex (excluding land): US$ 312 million

Roadblocks to retail development
• In India, organized retail is a little over a decade old • It is largely an urban phenomenon • However the pace of growth is still slow Reasons for slow growth in retail 1. Retail not being recognized as an industry in India o Hampering the availability of finance to existing and new players o Hence affecting growth and expansion plans 2. High costs of real estate o Lease or rent of property is major area of expenditure o This eats into the profitability of a project

Contd…
3. Lack of adequate infrastructure Poor roads, lack of cold chain infrastructure Existing supermarkets and food retailers have to invest substantially in building cold chain infrastructure 4. Multiple and complex taxation system Sales tax rates vary from State to State Organized players have to face multiple point control and tax system Tax evasion by small stores Hence it becomes expensive to transfer goods from one store to another 5. Foreign direct investment FDI in pure retailing is not permitted One of the prime reason for slow growth of retail in India Global retailer can enter only by way of a franchise with Indian partner or through technological alliances

Road Ahead; Plans of Large Retailers
• Reliance Retail: investing Rs. 30,000 crore ($6.67 billion) in setting up multiple retail formats with expected sales of Rs. 90,000 crore plus ($20 billion) by 2009-10. Pantaloon Retail: Will occupy 10 mn sq.ft retail space and achieve Rs.9,000 crore-plus ($2 bn) sales by 2008. RPG: Planning IPO, will have 450-plus Music World, 50-plus Spencer's Hyper covering 4 mn sq.ft by 2010. LIFESTYLE :Investing Rs.400 crore-plus ($90 mn) in next five years on Max Hypermarkets & value retail stores, home and lifestyle centres. Raheja's: Operates Shoppers' Stop, Crossword, Inorbit Mall, and 'Home Stop' formats. Will operate 55 "Hypercity" hypermarkets with US$100 million sales across India by 2015. Piramyd Retail: Aiming to occupy 1.75 million sq.ft retail space through 150 stores in next five years. TATA (Trent Ltd.): Trent to open 27 more stores across its retail formats adding 1 mn sq.ft of space in the next 12 DLF malls. Titan industries to add 50-plus Titan and Tanishq stores in 2006.

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