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Retailing World’s largest private industry

US$ 6.6 trillion sales annually

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

Retailing: An overview

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Wal-Mart Topmost global Fortune 500

company(3 Consecutive Years) Annual Sales of over US$ 250 bn India’s two largest retail player

turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop)

Fortune 100 9 Retailers Carrefour, Ahold, Home Depot,

Kroger, Metro, Kmart-Sears, Target, Albertsons’

An overview

Retailing: An overview

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Weekly MarketsVillage FairsMelas

Convenience StoresMom and Pop/Kiranas

PDS OutletsKhadi StoresCooperatives

Exclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping Malls

Traditional/Pervasive Reach

Government Supported

Historic/Rural Reach

Modern Formats/ International

Evolution of Indian retail

Source of Entertainmen

t

Neighborhood Stores/Convenie

nce

Availability/ Low Costs / Distribution

Shopping Experience/Efficie

ncy

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Informal retailing Sector Typically small retailers. Evasion of taxes

Difficulty in enforcing tax collection mechanisms

No monitoring of labor laws

Formal Retailing Sector Typically large retailers Greater enforcement of taxation

mechanisms High level of labor usage monitoring

Indian retail

Evolution of Indian retail

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Corporate Houses Tatas: Tata Trent RPG group: Food World, Health and Glow, etc ITC: Wills Life Style Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc.

Dedicated brand outlets Nike, Reebok, Zodiac etc

Multi-brand outlets Vijay Sales, Viveks etc

Manufacturers/ Exporters Pantaloons, Bata, Weekender

Indian retail

Categories of Indian retail

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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

Indian retail

Classifying Indian retail

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Hypermarket Big Bazaar Giants Shoprite Star

Department store Lifestyle Pantaloons Piramyds Shoppers Stop Trent

Entertainment Fame Adlabs Fun Republic Inox PVR

Indian retailers

Large Indian retailers

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Greater per capita income Increase in disposable income of

middle class households 20.9%* growth in real disposable

income in ’99-’03. 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

Indian consumer

The changing Indian consumer

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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 age100 mn 17-21 year olds*. Tend to spend freely.

Greater levels of education

Indian consumer

The changing Indian consumer

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Market size Current market size is roughly US$

286 bn* 96% of the 12 Million stores are less

than 500 Sq. ft. Forecast Growth rate for the retailing

industry is roughly 8.3% 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

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Growth determining factors Government Policy Infrastructure development GDP growth Employment generation and job

creationIn several new sunrise industriesImplies greater purchasing power

Growth factors

Growth factors

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India ranked 5th in the Global A.T Kearney Retail Development Index

Second only to China in Asia Least saturated of all global

markets studied The least competitive of all global

markets studied Implies lower barriers of entry for global players Considering tremendous market size, excellent potential for foreign players

India ranked 3rd in the Global A T Kearney FDI Confidence Index in 2004

Improved from Rank 6 in Year 2003

Advantage India

The Indian advantage

Employment in retailing is increasing

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Employment in Retailing

0

10

20

30

40

50

60

90 91 92 93 94 95 96 97 98 99 00 01

Year

Em

plo

ym

ent

in

Reta

il a

nd

whole

sale

(M

n)

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

% o

f Tota

l Labor

forc

e

Employment %

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