Shopping Environment in India

Retail Business in India

• India has been called a nation of shopkeepers

• Over 12 million outlets
• 7 outlets for 1000 consumers
• Unorganized sector accounts for 90% of the business
• Organized retail in India is expected to grow 25-30 per cent yearly and is expected
to increase from 35, 000 crore in 2004-05 to 109, 000 crore ($24 billion) by 2010.
 Retail Sectors in India

1. Food Retailers
2.Health and Beauty products
3. Clothing and foot wear
4.Home furniture and household goods
5.Durable goods
6.Leisure and personal goods
 Retail Structure

Organized
•Employs more than 10
person and includes corporate
backed hypermarkets and
retail chains
•Accounts for 2% of the trade
and employs just 0.5 million
people
Unorganized
•Refers to the traditional
formats of low cost retailing
such as local kirana shops
•Owner manned
•Employs 40 million
 Fastest growing Retail Segments in India
KPMG Indian Retail survey 2005

Jewelry

Foot wear and leather

Durables

Pharmacy

Furnitures and Fixtures

Clothing

Food and grocery

0 20 40 60 80 100
 Size Of Outlets

25%

20%

15%

10%

5%

0%
200 250 300 350 400 500 600 700
800
SQR FEET
 Share Of Organized Retail

1999 2002 2005

Total Retail ( in billion INR ) 7000 8,250 10,000

Organized Retail ( in billion INR ) 50 150 350

% Share of organized retail 0.70% 1.80% 3.5%

 Growth of Organized Retail in India

Year Stores ( in 1000’s )

1995 0.7
1996 0.8
1997 0.9
1998 1.1
1999 1.2
2000 1.5
2001 1.8
2002 2.1
2003 2.4
2004 2.5
 Projections for 2010 : Modern Retail Stores

India 2010 Projection Southern Bias

More than 5,500 modern trade stores FMCG booms in southern states
(figures are in percent)
Account for 10% India’s FMCG India( urban & rural) 3%

30% of metro FMCG Urban India 4%

23 metros 9%
south metros 20%

Organized retail has been growing 15% CAGR for the last five years
Accounts for 3% of FMCG sales in 2005
 Reason for growth of Organized Retail Sector in India

• Scalable and profitable retail models are well established for most of the categories
• Rapid evolution of new age young Indian consumers
• Retail space is no longer a constraint for growth
• Partnering amongst brands, retailers, franchisee, investors and malls
• India is on the radar of global retailers and suppliers
 Retail Formats

• Malls
• Speciality stores
• Kirana stores
• Supermarket General Merchants
• Kiosks
• Paan/Beedi shops