2. FLOW OF PRESENTATION
EVOLUTION OF RETAIL
ADVANTAGE – INDIA
MARKET OVERVIEW
CHANGING PARADIGM
RETAIL OPTIONS DURING SLOWDOWN
RURAL RETAIL IN INDIA
CHANGING FACE
KEY OPPORTUNITIES
SWOT ANALYSIS
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3. EVOLUTION OF RETAIL INDUSTRY
Weekly Markets, Village & Rural Melas
Convenience Stores, Mom n Pop Stores /
Kirana Stores
PDS Outlets, Khadi Stores, Cooperatives
Exclusive Brands Outlets, Hyper & supermarket
department stores & shopping malls
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4. ADVANTAGE – INDIA
• Ranked 1st – Global Retail Development Index 2009
• 5th largest destination globally
• Estimated growth – US $ 573 billion 2012 – 13
• Growing @ CAGR – 28%
• Provides employment – 8% India’s working population
• Home – largest base of consumers
• Young Population – under 35 years age & 60% population in
working age
• Home to 20% global population under 25 years of age
• Abundant availability of skilled workers
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5. MARKET OVERVIEW
• Annual Turnover - $ 37 billion
• Retail Industry - $350 billion
• 10% growth every year
• 7% population – engaged retailing
• Indian Retail Market – dominated by unorganized sector
• Organized sector – big cities
• Out of 10 companies – 6 from USA & 4 from UK
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6. CHANGING PARADIGM
2011
2008
2005
4th Phase –
M & A, Consolidation, High
3rd Phase –
Investments, Confluence of
2000 Technology Adoption, Indian Retail
Leveraging traditional
2nd Phase – formats for modern retail
Range, Portfolio
Format Options, beginning of the
1st Phase – rural – urban retail merge
Entry, Growth, Expansion Top Line focus
for organized retail
Source: Ernst & Young
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7. RETAIL OPTIONS DURING SLOWDOWNS
Private Labeling
Migrate towards Tier II & III cities & rural integration
Negotiations
Supply Chain & inventory management
Sales Promotions with focus on long run stability
Franchising
Extensive use of information & technology
Integrated CRM
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8. INSTRUMENTS FOR RETAILER
PROMOTIONS
PROMOTIONS
NON – PRICE
PRICE PROMOTIONS
PROMOTIONS
Trade promotions “Supportive” Non Price
“True” Non – Price Promotions
Promotion Packs Promotions
Loyalty Discounts
Coupons
Rebates
Others
POS Advertising
Samplings
Advertising in other media
Premiums
Displays
Sweepstakes
POS Materials
Events
Promotion Packaging
Others
Others
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9. . . . contd
CITIES CHARACTERISTICS
TIER 1 Bangalore Well established real estate market & well known
demand drivers
TIER II Chennai, Pune, Experiencing growing demand, investments & real
Hyderabad, Kolkata estate markets.
TIER III Chandigarh, Real estate market yet to mature, immense
Ludhiana, Lucknow, potential for demand
Guwahti,
Bhuvneshwar, Surat,
Nagpur, Indore,
Jaipur, Goa, etc. . .
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10. RURAL RETAIL IN INDIA
• Contributes major chunk
• 70% population lives in rural
• Spectrum of opportunities – rural retailing to luxury retailing
• 4P’s to 4A’s – availability, Affordability, Acceptability &
Accessibility
• Microfinance concept emerging – ITC e-choupal, HUL’s
Project Shakti, etc.
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11. PROBLEMS in BOOMING RURAL INDIA
• Absence of physical communication facilities
• Huge Power problems
• Lack of proper mass media & communications.
• Underdeveloped & poor people
• Completely unorganized & immature market
• Seasonal demands
• Illiterate & Uneducated people – slow to change
• Farmers – lively hood depends on monsoon
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12. CHANGING FACE
• Life style pattern – India’s middle class population changing
• “Saving” to “Spending” pattern
• Marked increase of new entrants – all verticals
• Modern Retail Formats: Malls, Department Stores, Discounters,
Cash & Carry
• Higher Disposable Income
• Employers offering – lucrative compensation & packages
• Increase in young population – increase in urbanization
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13. KEY PLAYERS IN INDIA
• Pantaloons Retail India
• Shopper’s Stop ltd
• RPG Enterprises
• Landmark Group
• Madura Garments – part of Aditya Birla Group
• Globus
• Provogue Ltd.
• Bata India Ltd
• Archies Ltd
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14. SOME OF MNCS IN INDIA
• United Colors of Benetton - Italy
• Arrow – USA
• Levis - USA
• Lee - USA
• Pepe Jeans - London
• Subway - USA
• Wrangler - USA
• Samsonite – USA
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15. KEY OPPORTUNITIES
• Wedding Malls
• Khaadi Plaza – 7000 outlets are to be launched
• Initiative Gujarat – Village Malls (512 launching & 508 awaiting)
• Immense potential in Rural Market – food, grocery , etc.
• Untapped Market – Reliance Retail, Aditya Birla
• RFID Technology – for better CRM & SUPPLY CHAIN
• Online Retailing – click to buy
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16. REVENUES & SHARES OF VERTICALS
Food & Clothing Consumer Jewelry & Home Beauty Books &
Foot ware
beverages & textile Durable Watch Décor Products Music
3,268 &
231,951 & 29,024 & 15,171 & 13,390 & 9,463 & 6,854 & 2,610 &
1.05%
74.41% 9.31% 4.87% 4.30% 3.04% 2.20% 0.84%
ALL IN USD & MILLIONS – Source: ibef
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17. SWOT ANALYSIS
STRENGTHS WEAKNESS
• Young Population • Policy related Issues
• Rapidly growing sector • Less Educated people
• High Disposable income • Underdeveloped Supply chain
• Low labour cost • Lack of basic utilities
• Microfinance • Lack of Power in Rural Areas
OPPORTUNITIES THREATS
• Untapped Rural Market • Poor Managed Inventory
• Collaboration with MNCs • Unorganized Retail – high %
• Retail Franchising • Uneducated People – slow change
• E-Retailing • Not much developed shopping culture
• RFID Technology • More of window shopping
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18. INITIATIVES BY CORPORATES
1. Arvind Mills – focus Rural Retail
Focus on direct selling
Shop –in-shop stores double to 1200 by April
Pack Model – smaller packing – multiple choices
Product Innovation
Group to re-look – product innovation, rural marketing
No Forex Risk Attached
B2C Model – 50-60% y-o-y higher than denim
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19. RETAILING @ BOP
Population in Billions
TIER 1 75-100
1500-1750
TIER 2 - 3
More than 4 TIER 4
billion constitute 4000
the BOP & live
less than $ 2 per
day TIER 5
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20. Urban Areas
have become a
magnet of
poor
Cash – poor &
low level of
income, BOP
consumer has to
be accessed
differently
Bolivian Financial
Services: illiterate people
can access it 24*7
HUL – CASIS
SHAKTI BAHIA
ITC
ICICI E-CHOUPAL CEMEX
SELF – HELP
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21. HUL – MICRO RETAILING
• 1999 start up – 6 new growth opportunities
• Confectionaries & sweets – candy fastest growing product @
BOP
• Ayush – Consumer Health Care
• Sangam – E-tailing program for daily ordering & delivering.
• Addressing needs of top – end consumers
• Water facility
• Project Shakti – direct – to – consumer initiative
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22. PROJECT SHAKTI - HUL
• Women’s Self Help Groups – Entrepreneur Development training
• Educating consumers on health & hygiene
• 4 goals of Project Shakti:
i. Plan to increase reach – Rural Market
ii. Attempt to increase awareness
iii. change attitudes
iv. Catalyze rural affluence & drive growth
• Andhra Pradesh – 70% involved in SHG
• Total – 1 million nationwide
• Investment > Rs. 20,000> 10% margin
• Shakti Vani programme – trained communicators, driven messages on sanitation, good
hygiene practices & women empowerment
• Year end 2008 – 45,000 entrepreneurs covering 1,00,000 villages across 15 states reaching
3 million homes
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23. ITC E-CHOUPAL – PROFITABLE RURAL
TRANSFORMATION
• States covered – 10
• Villages covered – 40,000
• # of e-Choupal – 6,500
• Farmers e-empowered – 4 million
• Expanding spectrum of commodities – wheat, pulses, soya,
maize, spices, coffee, aqua – products
• Farmers – rise in income level
• Compare price @ Chicago Trading Board too.
• Choupal Saagar – 24 hubs, 3 states, grow by 100 by 2010
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24. E-RETAILING
• E-commerce classification:
a. B2C – online selling by business unit to an individual consumer
b. B2B – Online selling by business to business
c. C2C – Online selling by consumer to another consumer
Today:
Customer is the king – 24*7 service through email, chat & toll free
Supply chain
E.g – ITC e-choupal
Better information
Convenience
Targeted & Mass Customization
Global Reach @ low cost
Value Added Service with best Customer service
“Shopping Anywhere, Anytime”
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