REVOLUTION OF RETAIL

An Overview
 Retail consists of the sale of goods or merchandise from a
fixed location, such as a department store, boutique or
kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser.

 With growing market demand, the industry is expected to

grow at a pace of 25-30% annually.

 The Indian retail industry is the fifth largest in the world.

Comprising of organized and unorganized sectors, is one
of the fastest growing industries in India, especially over
the last few years.

 With the change in tastes and preferences of the

consumers, the retail industry is getting more organised.
 Indian retail on the Fast track
 Retail contributes to 10% of India’s GDP and provides
employment to 8% of India’s working population.

 Over 12 million small and medium retail outlets exist in India,

the highest in any country.

 The Indian retail industry has grown from Rs. 35,000 crore in
2004-05 to Rs. 109,000 crore in the year 2010.
 Market witnessing a migration from traditional retailing to
modern/organized retailing formats, with an explosive
proliferation of malls and branded outlets.

 India ranked first for the third consecutive year, on the Global
Retail Development Index – 2007, conducted by AT Kearney
across 30 emerging economies. India is ranked as the most
preferred retail destination for international investors.

Total Retail Sales

350
311.7
300
261.8
250 230.3
205.4
USD billion

200 186.3

150

100

50

0
2001-02 2002-03 2003-04 2004-05 2005-06
Advantage India
 Maturing metros : Mumbai and Delhi are the prime
contributors to the retail pie, having the
highest organized retail penetration.
These cities are projected to achieve
3rd largest cities status by 2015.

 Both cities have a large consumer base with high

disposable incomes. Most pan-Indian retailers and luxury
retailing players have multiple retail outlets in these cities.
 Retailing formats in India
• Malls - The largest form of organised retailing today. Located
mainly in metro and urban cities. ranges from 60,000 to
7,00,000 sq. feet. An ideal shopping experience with
amalgamation of product ,service and entertainment all under
one roof.

• Speciality stores - Chains such as crossword, music chain

planet M are focusing on a particular segment and have
emerged victorious.

• Department stores - Large stores catering to a variety of

needs. furthur classified into localised departments such as
toys, clothing, home ,groceries etc.
• Supermakets - They mainly focus on food and grocery
sales. these stores today contribute to 30% of all food and
grocery organised retail sales.

• Convenience stores - Located mainly in residential areas,

they stock a limited range of convenience products and
charge slightly higher due to the proximity factor.

• MBO's - Multi brand outlets also known as category killers,

offer several brands across a single product .
Retail Banking
• Retail banking refers to banking in which banking
institutions execute transactions directly with consumers,
rather than corporations or other banks.

• Retail banking aims to be the one-stop shop for as many

financial services as possible.

• Services offered include: savings and transactional

accounts, mortgages, personal loans, debit cards, credit
cards, certificates of deposits and so forth.
 Changing Face of Indian
Consumerism
• Lifestyle patterns of India’s middle class are getting redefined
with adoption of western values and growing brand
consciousness.

• From a “saving” to a “spending” mindset, the face of Indian

consumerism is buoyant

• Marked increase in the number of new entrants and player

revenues across all the verticals.

• Increased consumer exposure to the latest trends and brands

driven by the mass media, retail revenues are soaring
Drivers in Retail growth
 Higher personal wealth disposable incomes.

 Increasing urbanization.

Personal Disposable Income

700 14
600 12

Y-o-Y growth %
500 10
USD billion

400 8
300 6
200 4
100 2
0 0
2000-01 2001-02 2002-03 2003-04 2004-05
 Favorable demographic profile and increase in number of
young employed executives and thinning gender divide.

 Easy availability of credit in terms of credit cards and personal

loans.

 Rapid development in IT.

Key Players in India
• Future group

• Shoppers stop Ltd

International players eyeing the
Indian market
• Wal-Mart has entered into a 50:50 Joint Venture and
Franchisee agreement with Bharti Retail Ltd. and plans to set
up its first cash-n-carry outlet by 2007-08.

• It is anticipated that the Starbucks – Pepsi Co. joint venture

would provide Indian market access to the world’s largest
coffee chain.

• Carrefour, France’s retail major is set to finalize its entry

route to India.
Some Major Players in Retail
banking
• State Bank of India
• Axis Bank
• Bank of India
• Citibank
• Deutsche Bank
• ICICI Bank
• SIDBI
• ING Vysya
• Indian Bank
• HSBC
• HDFC
• Syndicate Bank
• Canara Bank
CASE STUDY

State Bank of India

v/s

ICICI Bank
 STATE BANK OF INDIA
• State Bank of India is the largest state-owned banking and
financial services company in India.

• The bank traces its ancestry to British India, through the

Imperial Bank of India The government of India nationalized the
Imperial Bank of India in 1955, and renamed it the State Bank of
India.

• SBI presently has 82 foreign offices in 32 countries across the

globe. It has also 7 Subsidiaries in India - SBI Capital Markets,
SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI
Cards, forming a formidable group in the Indian Banking
scenario.
ICICI BANK
• Formerly known as Industrial Credit and Investment
Corporation of India, ICICI Banking Corporation was later
renamed as ICICI Bank Limited in 1994.

• It is the second largest bank in India and the largest

private sector bank in India by market capitalization. The
bank also has its presence in 18 countries.

• ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through
a variety of delivery channels in the areas of banking
operations, investment banking, life and non-life insurance,
venture capital and asset management.
Products on Offer in both banks
• Deposit accounts
• Housing Loan
• Loan Against Shares & Debentures
• Car Loan
• Educational Loan
• Agriculture/Rural Banking
• NRI Services
• ATM Services
• Demat Services
• Corporate Banking
• Internet Banking
• Mobile Banking
• International Banking
• Safe Deposit Locker
 SWOT Analysis of SBI
 STRENGHTS/OPPORTUNITIES

• The Bank is forging ahead with cutting edge technology and

innovative new banking models, to expand its Rural Banking base,
looking at the vast untapped potential.

• The Bank is the largest provider of infrastructure debt and the

largest arranger of external commercial borrowings in the country.

• SBI provides easy access to money to its customers through more

than 8500 ATMs in India.

• Growing retail & SMEs thrust would lead to higher business

growth.
 THREATS/WEAKNESSES

• Stiff competition, especially in the retail segment, could impact

retail growth of SBI
and hence slowdown in earnings growth.

• SBI is currently operating at a lowest CAR. Insufficient capital

may restrict the growth
• prospects of the bank going forward.

• Delay in technology upgradation could result in loss of market

shares .

• Satisfactory customer service.

SWOT ANALYSIS OF ICICI
 STRENGHTS/OPPORTUNITIES

• Advanced Infrastructure: Branches of ICICI Bank are well

equipped with advanced technology to provide the customers with
latest banking services.

• It provides Demat account facilities.

• Friendly staff provide faster services along with bonding &

personal relationship with the customers.

• 8am-8pm services to the customers, Large network of ATM’s.

• It has great potential to grow in the insurance sector.

 WEAKNESSES/THREATS

• ICICI Bank is facing tight competition locally as well as

internationally. Banks like CITI Bank, HSBC, ABM, Standard
Chartered, HDFC also provide equivalent facilities. ICICI does
not have consistency in its international operation.

• Bank Service Charges are slightly higher than government

sector banks.

• Decentralized Management: Each branch manager is given the

authority of taking decisions in their respective branches. One
wrong decision can lead to heavy losses to the bank.

• No Proper Facilities To Uneducated customers. ICICI Bank

provides all services through electronic computerized machines.
This creates problems to the less educated people.
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