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Agenda: Situation Analysis

Retailing: Introduction

Evolution of Retail Industry

Indian Retail Market Analysis & Summary

SWOT Analysis

Challenges

Competition

Key To Success

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• Retail has played a major role world over in

increasing productivity across a wide range of

consumer goods and services

• Retailing is one of the important sectors of an economy, both in terms of contribution to GDP and share in the total employment.

• India is the fifth largest retail market in the world

• The Indian retailing sector is at an inflection point. It is set to enter a new growth trajectory owing to rising household consumption and the entry of corporate entities and global retailers.

INTRODUCTION

Retailing: Introduction

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Traditionally retailing in India can be traced to -

• Weekly Markets Village Fairs & Melas.

• The emergence of the neighborhood ‘Kirana’

stores catering to the convenience of the

consumers

• Era of government support for rural retail:

Indigenous franchise model of store chains run by

Khadi & Village Industries Commission

• The latter half of the 1990s saw a fresh wave of

entrants with a shift from Manufactures to Pure

Retailers.

• Emergence of hyper and super markets trying to

provide customer with 3 V’s -

Value, Variety and Volume

An overview

Evolution of Retail Industry

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Weekly Markets

Village Fairs

Melas

Convenience Stores

/Kiranas

Khadi & Village

Stores

Cooperatives

Exclusive Brand Outlets

Hyper/Super Markets

Department Stores

Shopping Malls

Traditional/Pervasiv

e Reach

Government

Supported

Historic/Rural

Reach

Modern Formats/

International

Evolution of Indian retail

Source of

EntertainmentNeighborhood

Stores/Convenience

Availability/ Low

Costs /

Distribution

Shopping

Experience/Efficiency

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Rank Retailer Home Country

1 Wal-Mart Stores, Inc. U.S.A.

2 Home Depot, Inc. U.S.A

3 The Kroger Co. U.S.A.

4.Costco U.S.A.

5 Target U.S.A.

Top retailer

Top Player Of Retail- Worldwide

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• Shoppers' Stop

•Westside (Trent)

•Pantaloon (Big Bazaar)

•Lifestyle

•RPG Retail (Food world, Music world)

•Crossword

•Wills Lifestyle

•Globus

•Piramals ( Pyramid & Crosswords)

•Ebony Retail Holdings Ltd.

Retailers Of

India

Major player of Indian Retail

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• INDIAN RETAIL MARKET ANALYSIS & SUMMARY

• TARGET MARKET

• MARKET TREND

• MARKET DEMOGRAPHICS

• MARKET GROWTH

Market

Analysis

MARKET ANALYSIS

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Retailing in India can be classified under twobroad headings: Organized and Unorganized.

Currently, the size of Indian retail sector is US$410billion with unorganized retail.

Organised retail trade accounts for merely 4%of the total retail trade and is expected togrow at the rate of 30% to 40%.

The sector can be broadly divided into twosegments: Value retailing, which is typically alow margin-high volume business (primarilyfood and groceries) and Lifestyle retailing, ahigh margin-low volume business (primarilyapparel, footwear, etc).

Indian retail

Indian Retail Market Analysis & Summary

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Segmentation

Organised Retail Market Organised retail pie

Segment % contribution

Textile and apparel 38.9

Food and beverages 10.5

Consumer durables 9.0

Home solutions 6.7

Jwellery and watches 6.3

Books, music and gifts 3.2

Pharma 2.1

Others 23.3

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A segment of consumers that is most likely

to purchase the products and services

offered by a particular retailer

When defining the target market, retail

organizations generally identify

demographic, socioeconomic, and

psychographic characteristics, and then

use that data to focus and guide their

marketing, advertising, promotion, and

merchandising efforts.

MARKET

TARGET

TARGET MARKET

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The whole concept of shopping has altered

in terms of format and consumer buying

behavior, ushering in a revolution in

shopping in India. Modern retail has

entered India as seen in sprawling shopping

centers, multi-storied malls and huge

complexes offer shopping, entertainment

and food all under one roof.

MARKET

TRENDS

MARKET TRENDS

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MARKET DEMOGRAPHICS

*Data from NCAER

CONTEXT TYPE OF INFORMATION

Socio-demographic Population composition and distribution

Households and family formation

Health and health services

Learning and educational services

Housing conditions

Peace and order status

Economic activity National accounts

Labor force participation

Wages

Household income and expenditure

patterns

Poverty

Socio-cultural and political Political structure

Political participation

Relevant laws, statutes, policies

Predominant social structure

Gender roles in the household

Time use

Decision- making patterns in the

household

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•It is estimated that the retailing industry is likely to

grow up to $427 billion by 2010 and US$637 billion by

2015 and that organized retail could account up to a

share as high as 20%-22% of this market.

•Organized retail will grow at a significant CAGR of

around 50% till 2011 mainly due to the investments of

more than $30 billion budgeted by big and small

players in the organized retail sector over coming

five to seven years. Organized retail sector has

witnessed a CAGR of around 35% over the past five

years and currently accounts for about 1.5% of the

country’s GDP.

MARKET

GROWTH

MARKET GROWTH

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MARKET RETAIL GROWTH

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• Products are cheaper than the market

price.

• Technology intensive industry

• Variety in products

• Demographic favor

• Rising disposable income

• Urbanization

• Shopping convenience

• Low labor cost of skilled ones

• Plastic card revolution

Strength

SWOT Analysis

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• Has not yet trapped the whole market.

• Facing problems due to political

environment

• Less conversion level

• Customer loyalty

• Policy related issues

• Limited consumer insight

• Inadequate human resources

• Taxation hurdle

• Underdeveloped supply chain

• Lack of adequate facilities

Weakness

SWOT Analysis

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• Kids and teens retailing segment

• Percolating down

• Rural retailing

• Sectors for high growth potential

• Locational advantage

• Falling real estate cost

• E-retailing

• Franchising

OPPORUNITY

SWOT Analysis

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• Shopping culture

• Political issues

• Social issues

• Lack of differentiation among the malls

that are coming

• Poor inventory turns and stock

availability measures

THREATS

SWOT Analysis

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•The organized retail industry in India is facing…

competition from the unorganized sector.

•Intensifying competition is exerting downward

pressure on prices.

•• The industry is facing a severe shortage of

talented professionals, especially at the middle-

management level.

•Supply chain management.

•Lack of adequate infrastructure.

•Differential tax rates.

CHALLENGES

CHALLENGES IN RETAIL SECTOR

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Price

Customer Delight

Schemes

Availability of all types/ brands

Quality of products

Success Points

KEY TO SUCCESS

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KUMAR RAMA SHANKAR

HRD-09-6134

Presented By

THANK YOU