PRESENTATION ON BIG BAZAAR

Presentation by -Gurdeep Singh -Pushpak Pandey -Shaleen Agarwal -Rohan Tandon -Richa Kohli

Agenda
Retailing : An overview Indian retail The change factor FDI in Indian retailing Why FDI ? How FDI ? Big Bazaar- Company Profile - Customer Segment - Vision and Mission - Swot analysis - BCG Matrix - Porter 5 Forces Model

Retailing: An overview 

Retailing  World¶s largest private industry US$ 6.6 trillion sales annually Fortune 100  9 Retailers  Carrefour, Ahold, Home Depot, Kroger, Metro, Kmart-Sears, Target, Albertsons¶ Indian Retailing  Largest employer after agriculture - 8%* of population  Highest outlet density in world Around 12 mn outlets  Still evolving as an industry Long way to go 

An overview 

Evolution of Indian retail
Historic/Rural Reach Traditional/Pervasiv e Reach Government Supported Modern Formats/ International

Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Khadi Stores Cooperatives Convenience Stores Mom and Pop/Kiranas Weekly Markets Village Fairs Melas
Source of Entertainment Neighborhood Stores/Convenience Availability/ Low Costs / Distribution Shopping Experience/Efficiency

Evolution of Indian retail  Informal retailing Sector  Typically small retailers.  Evasion of taxes  Difficulty in enforcing tax collection mechanisms  No monitoring of labor laws Indian retail  Formal Retailing Sector  Typically large retailers  Greater enforcement of taxation mechanisms  High level of labor usage monitoring .

Reebok. DLF(DT cinemas) etc. Dedicated brand outlets  Nike. Health and Glow. Bata. Weekender .Categories of Indian retail  Indian retail    Corporate Houses  Tatas: Tata Trent  RPG group: Food World. etc  ITC: Wills Life Style  Rahejas(ShoppersStop). Hiranandani(Haiko). Zodiac etc Multi-brand outlets  Vijay Sales. Viveks etc Manufacturers/ Exporters  Pantaloons.

Classifying Indian retail  Indian retail  Modern Format retailers  Supermarkets (Foodworld)  Hypermarkets (Big Bazaar)  Department Stores (S Stop)  Specialty Chains (Ikea)  Company Owned Company Operated Traditional Format Retailers  Kiranas: Traditional Mom and Pop Stores  Kiosks  Street Markets  Exclusive /Multiple Brand Outlets .

Large Indian retailers  Hypermarket     Big Bazaar Giants Shoprite Star Lifestyle Pantaloons Piramyds Shoppers Stop Trent Fame Adlabs Fun Republic Inox PVR  Department store      Indian retailers  Entertainment     .

9%* growth in real disposable income in ¶99-¶03.The changing Indian consumer  Indian consumer   Greater per capita income  Increase in disposable income of middle class households  20. Growing high and middle income population  Growing at a pace of over 10%* per annum over last decade Affordability growth  Falling interest rates  Easier consumer credit  Greater variety and quality at all price points ‚From Euromonitor Retail Survey .

Tend to spend freely. Greater levels of education Indian consumer    *Data from NCAER .The changing Indian consumer  The urban consumer  Getting exposed to international lifestyles  Inclined to acquiring asset  More discerning and demanding than ever No longer need-based shopping  Shopping is a family experience Changing Mindset  Increasing tendency to spend  Post Liberalization children coming of age 100 mn 17-21 year olds*.

ft.3% for 2003-2008  Sales from large format stores would rise by 24-49%**  Formal and modern format retailing would enjoy rapid growth  Anticipated growth .Anticipated growth Market size  Current market size is roughly US$ 286 bn*  96% of the 12 Million stores are less than 500 Sq.  Forecast Growth rate for the retailing industry is roughly 8.

Industry dynamics  Low domestic competition  Because of fragmented nature of industry Lack of exposure to global best practices  Low entry barriers for unorganized retailing  Moderate entry barriers for organized retailing Wholesale system under-invested leading to 20-40% wastage Non level playing field issues  Wide differences in treatment of small and large retailers  Industry dynamics   .

Industry dynamics     Real Estate Costs Supply Chain Inconsistency Poor Infrastructure Lack of Skilled Manpower issues .

Growth factors  Growth factors Growth determining factors  Government Policy  Infrastructure development  GDP growth  Employment generation and job creation In several new sunrise industries Implies greater purchasing power .

The Indian advantage  India ranked 1st in the Global A.T Kearney Retail Development Index    Advantage India India Russia China .

Billion Food & Grocery Textiles & Apparel Jewelry & Watches Consumer durables Pharmaceuticals Home Solutions Books. Music & Gifts Others 50 185 30 43 10 32 15 111 476 Organised Retail as % of Total 1 19 5 10 3 9 13 10 5 . Billion 6422 980 554 415 364 351 115 1159 Total 10360 Organised Retail Rs.THE SIZE OF THE OPPORTUNITY Products Total Retail Rs.

FDI in Indian retailing  FDI in Retail not permitted Current Indian FDI Regime  FDI not permitted in retail trade sector. except in:  Private labels  Hi-Tech items / items requiring specialized after sales service  Medical and diagnostic items  Items sourced from the Indian small sector (manufactured with technology provided by the foreign collaborator)  For 2 year test marketing (simultaneous commencement of investment in manufacturing facility required) .

 Leading food retailer in India now  Mc Donalds  Current FDI .  No FDI restrictions in the retail sector pre1997  Foodworld  51:49 JV between RPG and Dairy Farm International.FDI in Indian retailing  Metro Group of Germany  Cash-and-carry wholesale trading  Proposal faced strong opposition Entities established prior to 1997  Allowed to continue with their existing foreign equity components.

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QuickTimeΠand a decompressor are needed to see this picture. Hypermarket The chain of retail stores of the Pantaloon Retail (India) Ltd. 89 outlets in India Headquarter in Mumbai Focusing on Value of Money .

a chain of seamless malls. Headquartered in Mumbai (Bombay). In the value segment. touch and feel of Indian bazaars with the choice and convenience of modern retail. . Pantaloon Retail employs around 30. its marquee brand. the group operates over 12 million square feet of retail space in 71 cities and towns and 65 rural locations across India. is one of India¶s leading business houses with multiple businesses spanning across the consumption space. led by its founder and Group CEO. retail real estate development. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment. capital. ‡ Led by its flagship enterprise. brand development. a fashion retail chain and Central. retail media and logistics. group subsidiaries are present in consumer finance. insurance.000 people and is listed on the Indian stock exchanges.COMPANY PROFILE ‡ Future Group. Kishore Biyani. While retail forms the core business activity of Future Group. the group operates Pantaloons. Pantaloon Retail. Mr. Big Bazaar is a hypermarket format that combines the look. leisure and entertainment.

books and music chain. among others. home improvement chain. the group¶s financial arm provides investment advisory to assets worth over $1 billion that are being invested in consumer brands and companies. sportswear retailer. real estate. The first set of Big Bazaar stores opened in 2001 in Kolkata. electronics retailer. marking the fastest ever organic expansion of a hypermarket. Home Town and rural retail chain. hotels and logistics. It also operates a consumer finance arm with branches in 150 locations. Planet Sports. eZone. The group¶s speciality retail formats include. Depot. ‡ ‡ . It also operates popular shopping portal. Hyderabad and Bangalore. Big Bazaar opened its 100th store. Future Capital Holdings.‡ In 2008. Aadhaar.

Customer Segment ‡ Big Bazaar target to upper middle class and higher customers. ‡ Big Bazaar specially target working women and home maker who are the primary decision maker. . ‡ The large and growing young working population is a preferred customer segment.

Mission & Vision ‡ Future Group shall deliver Everything. ‡ We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development . everywhere. every time for every Indian Consumer in the most profitable manner.

SWOT ANALYSIS ‡ STRENGTHS ‡ ‡ ‡ ‡ ‡ EVERY DAY LOW PRICING GOOD INFRASTRUCTURE CONSUMER PREFERENCES DIVERSE MARKET COVERAGE AWRENESS ABOUT THE BRAND HIGH AMONG MASSES SUB URBAN UNTAPPED MARKET ³ONE STOP´ CONCEPT UNKNOWN YET EVOLVING CONSUMER ORIENTATION CO BRANDING AND FRANCHISING FOR FASTER GROWTH ‡ OPPORTUNITIES ‡ ‡ ‡ ‡ .

SWOT ANALYSIS ‡ WEAKNESS ‡ LOW PERCEPTION AMONG CONSUMERS ‡ LESS AVAILABILITY OF STORES ‡ SUPPLY CHAIN BOTTLENECKS(FRAGMENTED MARKETS) ‡ THREATS ‡ NEW ENTRANTS AND FOREIGN PLAYERS ‡ UNORGANISED RETAIL MARKET .

METRO.MORE.NEXT.5 FORCES PORTER MODEL ‡ RIVALRY AMONG COMPETITORS ‡ RELIANCE.CARREFOUR.IKEA ‡ FOREIGN PLAYERS ALLOWED TO SOME EXTENT ‡ BARGAINING POWER OF SUPPLIERS ‡ SUPPLIERS HAVE A HUGE UNORGANISED SECTOR TO CATER TO .VISHAL.SPENCERS ‡ NEW ENTRANTS ‡ WALMART.

Contd« ‡ BARGAINING POWER OF CONSUMERS ‡ PRICE SENSITIVE CONSUMERS ‡ MORE AVAILABLE CHOICES ‡ THREAT OF SUBSITUTES ‡ UNORGANIZED RETAIL .

BCG MATRIX QuickTimeΠand a decompressor are needed to see this picture. .

MARKETING µ7 P¶s ANALYSIS .

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PRICING iValue Pricing (EDLP) i Promotional Pricing Low Interest Pricing Psychological Pricing Special Event Pricing (Republic Day) i Differentiated Pricing Time Pricing i Bundling .

PRICING COMPARISION QuickTimeΠand a decompressor are needed to see this picture. .

.TIME PRICING QuickTimeΠand a decompressor are needed to see this picture. QuickTimeΠand a decompressor are needed to see this picture.

QuickTimeΠand a decompressor are needed to see this picture.LOW INTEREST FINANCING PSYCHOLOGICAL PRICING QuickTimeΠand a decompressor are needed to see this picture. .

T. Radio) POINT OF PURCHASE PROMOTION GIFT TO EVEY 100th CUSTOMER (Seaso . PROMOTION SAAL KE SABSE SASTE 3 DIN FUTURE CARD (Discount Upto 3%) SHAKTI CARD JUNK SWAP OFFER BRAND AMBASSADOR: M.QuickTimeΠand a decompressor are needed to see this picture.V..S. DHONI ADVERTISMENT (Print Ads.

QuickTimeΠand a decompressor are needed to see this picture.BANNERS AND POSTERS QuickTimeΠand a decompressor are needed to see this picture. .

High Security For Safety Of Customers. Presently Around 10000 Workers Are Working And Around 500 Workers Are Recruited Every Month.PEOPLE People Are The Customers Which Are The Biggest Asset Of A Company. Appearance. . Well Trained Staff.

Problems ahead Reduction in consumer spending Slow construction of malls Difficulty in raising working capital High rentals Lowering margins New emerging competitors .

THANK YOU .

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