Retail evolution trends & business ppt @ bec doms

1. Retail Evolution, Trends & Business
Opportunities in India

2. India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story

3. The India Story
• Socialist policies – minimal private sector role
• Bureaucratic
• Protected market
• Small consumer markets
• Underdeveloped infrastructure
• One of the fastest growing economies ; 9%+
growth rate for 5 years prior to current crisis
• Resilient Economy – 5-6% growth at the peak
of the global crisis
• Opening up sectors for investment
• Promising consumer markets
• Significant investment in infrastructure
development
YESTERDAY
TODAY
• Largest democracy; Stable government.
• Dominant private sector; Increasing withdrawal of
government from business
• Robust banking sector; Capital markets
• World class IT & telecom infrastructure
• A ‘connected economy’; Economic efficiency &
quality of governance
An Enabling Environment

4. Demographic Dividend
• 2nd
largest urban population: 29% of the total (2007)
• Projected to reach 37.8% by 2025.
• To register the largest addition to the working age
population in the world by 2010.
• Largest working age population worldwide by
2050.
25
34
37 38
44
0
10
20
30
40
50
India
China
US
Russia
Japan
0-19 yrs
41.8%20-59 yrs
50.7%
60yrs &
above
7.5%
• Enormous consumption force: Large youth population
• Global production force in service:
• Large pool of professionals and technocrats
• Largest pool of English speaking manpower after the US
• Manufacturing force: Labour costs, as a % of value
added - one of the lowest among Asian countries.
Growing urban & Working population
Powerful production & consumption forceDemographic Profile
Population Median Age (In Years): 2008E

5. Present global crisis: An opportunity for India
Indian economy coped with the crisis better; Clear signs of recovery
• Revised government growth projection for 09-10 at 6.9%; Q2 GDP growth at
7.9%
• GDP forecast for 2010-11 is 7.9%
• 2010-11 to be a year of consolidation; launch into the high growth mode
India’s long term strengths still valid
• Growth primarily driven by the strong domestic market.
• Domestic savings rate at more than 35%
• India projected to be the 5th
largest consumer market by 2025, worth over USD
1,500 Bn – CAGR of 7.3% (McKinsey Institute)

6. Macro Economic Environment
Driving the unfinished agenda
Fiscal Balance
Driven by stimulus packages fiscal
deficit currently at 6.8% of GDP.
To be brought down to 3% over 5
years
Tax Reforms
Indirect tax: GST roll out by FY11 To
overcome the dual tax regime; simplified
structure; creating a unified market.
Direct tax: Proposed Direct Tax code
aiming at substantial increase in income
tax limit
Disinvestment
Plans to dilute 10% in many profit
making PSUs
A source of spending in social
infrastructure
Social Programs
72% of population in rural areas
35% of govt. spending is towards
rural schemes; spend has grown by
45% annually during last 2 yrs.

7. India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story

8. Founded in 1976 with an initial capital of $ 1000.
Started with small scale manufacturing units
Started manufacturing telephones in technical collaboration with Siemens
AG
Tie-up with Takacom corp., Japan for answering machines in 1986, LG, South Korea for
cordless phones & Systema for telephone terminals in 1988
1985
Import of portable power generators from Japan for distribution in India
Formed a Consortium with Vivendi and others to bid for Cellular Licences
1976
Bharti Airtel – First mobile service operator in Delhi
Best in class Global partners since beginning - Singapore Telecom, E M Warburg Pincus,
USA, British Telecom, UK, Telia, Sweden, New York Life International, Asian
Infrastructure Fund(AIF)
1995
1992
1982
Our Beginnings

9. Bharti Airtel
India & SAARC Region
Telecom Seychelles
Seychelles Islands
Jersey Airtel
Channel Islands
Comviva Technologies
Telecom software
Bharti AXA Life Ins
Life Insurance
Bharti Realty
Real Estate
Indus Towers
Passive Infra Sharing
Bharti Teletech
Comm. & Media Devices
Bharti Retail
Retail
Guernsey Airtel
Channel Islands
Bharti Wal-Mart
Wholesale Cash & Carry
Bharti AXA Gen Ins
General Insurance
Bharti Infratel
Passive Infra
Bharti AXA Investment
Managers
Asset Management
FieldFresh Foods
Agri Exports
Centum Learning Ltd
Training & Dev
TELECOM
SERVICES
FINANCIAL SERVICES RETAIL /
WHOLESALE
EMERGING
BUSINESSES
Bharti Foundation
CSR activities
Bharti Foundation
CSR activities
Our Businesses

10. TELECOM
SERVICES
FINANCIAL SERVICES RETAIL /
WHOLESALE
EMERGING
BUSINESSES
Our Partners

11. Bharti Group: Our Key Differentiators
Transformation
• Significant impact on the lives of people
• Attract and nurture top talent
Innovation
• Business model
• Market offering
Focus on Core
Competence
•Outsourcing
•Scalability
Operating
Principles
Partnership
•World-class
partnerships

12. India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story

13. Rising index of global investor confidence
Rising FDI flow despite conservative global market condition:
 Increased to $27.3 Bn in 08-09 from $24.5 Bn. in 2007-08
 World Investment Report placed India in top 5 most attractive locations for FDI for 2009-
11 alongside China, the US, Brazil, and Russia.
The Top 5 sectors attracting FDI inflows (Apr 2000 – Oct 2009) are:
 Services ($22 billion)
 Computer Hardware & Software ($9.4 billion)
 Telecom ($8.4 billion)
 Housing & Real Estate ($7.5 billion)
 Construction ($6.7 billion)
Enabling environment:
 100% foreign investment allowed except for sensitive sectors like retail and insurance

14. Key emerging sectors in India
Infrastructure
Stepping up spending; 5% in 2006-07 to 9% of the GDP
by end of 2012.
Total investment projected - USD514 billion (2007-2012).
Increasing share of private sector:
• From 20% in total spend in 2002-07 to 30% by
2012
• Successful execution in the PPP mode
• Over 60% private sector contribution in ports,
airports and telecom
Education
Largest capitalized space in India with $30 Bn of
government spend (3.7% of GDP).
Private education is currently estimated at $50 Bn
(14%CAGR over FY08-FY12E); expected to reach $115 Bn in
he next 10 years
100% FDI allowed through the automatic route,
Future potential:
• Massive shortfall
• Emerging segments
Health Care
Growth of 9.3% between 2000-2009
Current size is USD 35 billion; Projected to grow 23% per
annum to touch $77 billion by 2012
Healthcare facilities to contribute to 70% of the total
sector touching a figure of $54.7 billion by 2012.
Investment of $14.4 Bn needed by 2025 to increase its
bed density to at least two per thousand population.
Insurance
 4th
largest insurance market in Asia excluding Japan.
 Rapid growth over years; Life Insurance at 31%
CAGR over the last six years, General Insurance at
16% over the last six years
 Low penetration with huge potential:
 Life insurance was 4% of GDP in 2009 up from 1.7%
in 2000
 General Insurance was 0.6% of GDP in 2009
 Large untapped rural market

15. India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story

16. Retail Sector poised for phenomenal growth
Source: India Shopping Trends, 2008 -
Technopak
ORGANISED RETAIL EXPECTED TO GROW 35-40% CAGR
The Indian Retail
Sector, currently
the Fifth largest in
the world, is
poised for
phenomenal
growth in the
coming years
Size & Position in the current Scenario
Current Size & Future growth of Organized Retail in India

17. The Indian Retail Landscape
 Organized retail has grown from USD 2 Bn in 2002 to USD 37 Bn today in a
total of USD 350 Bn
 Impact on the consumer; low price and assured quality through supply chain
efficiency
 Impact on producers, farmers; direct sourcing from SME’s and farmers;
providing critical connect to market place
 Investments in the range of USD 30+ Billion expected by 2011 in Retail and
Supply Chain
 Scale: Size of organized retail likely to touch USD 70 billion by 2011
 Employment: Over 850K direct jobs to be created in Retail in the next 5 years.
Source: India retail report 2009 by Images Retail, CII BCG report on India’s demographic dil
Dec’08

18. Key Challenges
 Immense ethnic diversity
 Absence of Infrastructure and good retail space
 Workforce Management (talent crunch)
 IT Infrastructure
 Supply Chain
 Legal

19. Key Opportunities
 Supply Chain Investments
• Setting up logistics and supply chain infrastructure
• Import of know how and logistics techniques from developed retail countries
 IT Infrastructure
• IT is the enabler behind communication, collaboration with suppliers, and an
efficient supply chain
 Manpower
• Potential tie-ups with universities and setting up dedicated retail institutes
• Utilize experience of international retailers to train local talent
Large Rural market

20. Thank You