1

Retailing ’ World s larges t private indus try

6.6 US$ trillion s ales annually

Indian retailing - 8%* Larges t employer after agriculture ofpopulation

Highes t outle t dens ity in world 12 Around mn outle ts

Still evo lving as an indus try Long way to go

An overview

: Retailing An overview

2

-Wal Mart 500 (3 Topmos t global Fortune company

)Cons ecutive Years 250 Annual Sales of over US$ bn ’ India s two larges t re tail player turnover

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

100Fortune 9 Retailers , , , , Carrefour Ahold Home Depot Kroger

, - , , ’ Metro Kmart Sears Target Alberts ons

An overview

: Retailing An overview

3

Weekly Markets Village Fairs

Melas

Convenience Stores Mom and

/Pop Kiranas

PDS Outle ts Khadi Stores

Cooperatives

Exclus ive BrandOutle ts

/ Hyper Super Markets Department Stores

Shopping Malls

/Traditional Pervas iv e Reach

GovernmentSupported

/ His toric RuralReach

/ Modern FormatsInternational

Evolution of Indian retail

Source ofEntertainment

Neighborhood/Stores Convenience

/ Availability Low / Cos ts

Dis tribution

Shopping/Experience Effic iency

4

Informal retailing Sector .Typically small re tailers Evas ion of taxes

Difficulty in enforc ing tax co llectionmechanisms

No monitoring of labor laws

Formal Retailing Sector Typically large re tailers Greater enforcement of taxationmechanisms

High leve l of labor us age monitoring

Indian retail

Evolution of Indian retail

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Corporate Hous es : Tatas Tata Trent : , RPG group Food World Health and

, Glow etc : ITC Wills Life Style ( ), Rahejas Shoppers Stop

( ), ( ) .Hiranandani Haiko DLF DT cinemas etc Dedicated brand outle ts

, , Nike Reebok Zodiac etc - Multi brand outle ts

, Vijay Sales Viveks etc / Manufacturers Exporters

, , Pantaloons Bata Weekender

Indian retail

Categories of Indian retail

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Modern Format re tailers Supermarkets ( )Foodworld Hypermarkets ( )Big Bazaar Department Stores ( )S Stop Spec ialty Chains ( )Ikea Company Owned Company Operated

Traditional Format Retailers : Kiranas Traditional Mom and Pop Stores Kios ks Stree t Markets / Exclus ive Multiple Brand Outle ts

Indian retail

Clas s ifying Indian retail

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Hypermarket Big Bazaar Giants Shoprite Star

Department s tore Lifes tyle 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 Increas e in dis pos able income of middle

c las s hous eholds 20.9%* growth in real dis pos able income in

’99-’03. Growing high and middle income population

10%* Growing at a pace of over per annum over las t decade

Affordability growth Falling interes t rates Eas ier cons umer credit Greater varie ty and quality at all pricepoints

Indiancons umer

The changing Indian cons umer

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The urban cons umer Getting expos ed to international life s tyles Inc lined to acquiring as s e t More dis cerning and demanding than ever

- No longer need bas ed s hopping Shopping is a family experience

Changing Minds et Increas ing tendency to s pend Pos t Liberalization children coming of age

100 17-21 *. mn year o lds Tend to s pend.free ly

Greater leve ls of education

Indiancons umer

The changing Indian cons umer

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Market s ize 286 *Current market s ize is roughly US$ bn 96% 12 500 of the Million s tores are les s than

. .Sq ft Forecas t Growth rate for the re tailing

8.3% 2003-2008 indus try is roughly for Sales from large format s tores would ris e by

24-49%** Formal and modern format re tailing would

enjoy rapid growth

Antic ipatedgrowth

Antic ipated growth

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Growth determining factors Government Policy Infras tructure deve lopment GDP growth Employment generation and job creation

In s everal new s unris e indus tries Implies greater purchas ing power

Growth factors

Growth factors

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

Second only to China in As ia Leas t s aturated of all g lobal marketss tudied

The leas t competitive of all g lobal marketss tudied

Implies lower barriers of entry for g lobalplayers , Cons idering tremendous market s ize

exce llent potential for fore ign players

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

6 2003Improved from Rank in Year

AdvantageIndia

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

Ye ar

Employmentin

Retailand (

)wholesale

Mn

0.00%1.00%2.00%

3.00%4.00%5.00%6.00%

7.00%8.00%

%

ofTotalLabor

force

Employment %

14