retail industry final 100709

8/8/2019 Retail Industry Final 100709

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Batch No. 62Batch No. 62

PunamPunam ShindeShindeShrutiShruti LakhamLakham

SamratSamrat SahaSahaAmeyaAmeya DhumalDhumal


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Retail is like riding on a bicycle, if youRetail is like riding on a bicycle, if you

stop you will fall on the groundstop you will fall on the ground

-- KishoreKishore BiyaniBiyani


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vibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractive

vibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractive

vibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractive

vibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractivevibrant knowledge creative innovative exciting demanding challenging- multi-tasking attractive

VibrantVibrant

InnovativeInnovative

CreativeCreative

AttractiveAttractiveDemandingDemandingChallengingChallenging

Retail isRetail is

ExcitingExciting

KnowledgeKnowledge

MultiMulti--taskingtasking


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The story insideyWhat is Retailing?y Traditional Retailing in India

y Retail evolution in India

y Retailing in India

y Recession & Retailing

y

Retailing go hand in hand with Indian Economyy Retailing in India down the years

y Case Studies: Big Bazaar & Reliance Fresh


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The story Insidey What is Retailing?

yTraditional Retailing inIndia




y Retailing go hand in hand with Indian Economy

y Retailing in India down the years



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Traditional Retailing in India


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Traditional Retailing in Indiay Started from barter system, markets in fairs/melaas,

weekly markets

y

Unorganized retail markets & retailersy Small baniyas/kiranas at every corner of the road

y Sellers market

y The industry getting organized since last decade

y Organized Retail industry grown from early 1990


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Weekly Markets

Village Fairs

Melaas

Convenience Stores

Mom and Pop/Kiranas

PDS Outlets

Khadi Stores

Cooperatives

Exclusive Brand Outlets

Hyper/Super Markets

Department Stores

Shopping Malls

Traditional Reach

Government

Supported

Historic/Rural

Reach Modern Formats/International

Source of

Entertainment

Neighborhood

Stores/Convenience

Availability/ Low

Costs / DistributionShopping

Experience/Efficiency

Traditional Retailing in India


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y Traditional Retailing in India

yRetail evolution in Indiay Retailing in India


y

Retailing go hand in hand with Indian Economyy Retailing in India down the years



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Retail evolution in Indiay Increase in the young working population

y Hefty pay-packets

y Migration of rural population to urban areas

y Increasing working-women population

y Increase in disposable income and customer aspiration

y Increase in expenditure for luxury items

y

Increasing use of credit/debit cards


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Growth in Indian Retail markety Change in the consumers behavior

y

Change has come in the consumers behavior due toy Increased income

y Changing lifestyles

y Patterns of favorable demography

y Consumers want to shop at a place where they can getfood, entertainment and shopping all under one roof


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Key attributes of Indian Retail markety 5th largest Retail market across the globe

y Ranked the 2nd most emerging market

y

Current share in GDP is 12%y Current share in overall employment 8%

y Liberalization & globalization policy

y Growing at a pace of 25% p.a.

y More players entering into the markety Buyers market


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The story Insidey What is Retailing?y Traditional Retailing in India


yRetailing in Indiay Recession & Retailing

y Retailing go hand in hand with Indian Economyy Retailing in India down the years



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Retailing in Indiay Organization of industry started since early 1990y Unorganized market: Rs. 583000 cr.

y Organized market: Rs. 55000 cr.

y 8 times growth in organized retailing between 2000-2009

y Over 4000 new modern Outlets in the last 3 years

y Over 50 lacs sq. ft. of mall space under development


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Retailing in India

Top 3 modern retailers control over 7.5 lacssq. ft. of retail space i.e. 15% of total space

Over 4 lacs shoppers walk through theirdoors every week

Food & Apparel dominate the share in retailproduct categories

FMCG is the fastest moving productcategory


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Pathway of Retail in India


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Major Retailers in Indiay Future Groupy Shoppers Stop

y Caf Coffee Day

y Subhiksha

y Westside

y Planet M

y

Archiesy Globus

y Next

y Reliance

y Nilgiris

y Pyramid

y The Loot

yApna Bazaar

y Spinach

y

Lifestyley Crossword

y D-Mart

To be continued.


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Product category Share in USD(million)

Share in %

Food and beverages 231,951 74.41

Clothing and Textile 29,024 9.31

Consumers Durables 15,171 4.87

Jewellery and Watches 13,390 4.30

Home Dcor 9,463 3.04

Beauty Care 6,854 2.20

Footwear 3,268 1.05

Books, Music and Gifts 2,610 0.84

Revenue and Share ofVerticals


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Growth of Organized Retail in India


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Share of Organized & Traditional Retail


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Format Description The Value Proposition

Branded Stores Exclusive showroomseither owned or franchised

out by a manufacturer.

Complete range availablefor a given brand, certified

product quality

Specialty StoresFocus on a specific

consumer need, carry mostof the brands available

Greater choice to theconsumer, comparison

between brands is possible

Department Stores

Large stores having a wide

variety of products,organized into differentdepartments such as

clothing, house wares,furniture, appliances, toys,

etc.

One stop shop catering tovaried/ consumer needs.

Formats in Indian Retail


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SupermarketsExtremely large self-service

retail outletsOne stop shop catering tovaried consumer needs

Discount Stores

Stores offering discounts onthe retail price through

selling highvolumes andreaping economies of scale

Low Prices

Hyper- mart

Larger than a supermarket,sometimes with a

warehouse appearance,generally located in quieter

parts of the city

Low prices,vast choiceavailable including services

such as cafeterias.



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Convenience storesall self-service for ats

locate in cro e r anareas.

Convenient location anexten e operating ho rs.

hopping Malls

An enclos re havingifferent for ats of in-

store retailers, all n erone roof.

Variety of shops availa leto each other.


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Retail space distribution in top 7 cities


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Supply Chain Management in Indian Retail

SCM is a channel of distribution

SCM connects manufacturer with Retailer

Currently SCM is fragmented in IndianRetail market, especially in food & grocerycategory

Warehouses play crucial role in SCM Road, Rail & Air: key mediums in SCM


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Supply Chain Management in Indian Retail


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Technology in RetailCustomer Interfacing Systems

Bar Coding and Scanners Payment Internet

Operation Support Systems ERP System CRM SystemsAdvanced Planning and Scheduling Systems

Strategic Decision Support System Store Site LocationVisual Merchandising


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The story Inside

y What is Retailing?




yRecession & Retailingy Retailing go hand in hand with Indian Economyy Retailing in India down the years



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Recession & Retailing

Foot-falls has decreased drastically

Supply is more Demand is less

Low spending on Mktg. campaigns

Customer retention has become a challenge Cut-throat competition to retain customer

No affect on Food category, formats like Food Bazaar

Adversely affected on product categories like, Luxuryitems, jewellery, consumer durables, furniture, etc.

New retail plans are kept on hold


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y Retailing in Indiay Recession & Retailing

y

Retailing go hand in handwith Indian Economyy Retailing in India down the years

y

Case Studies: Big Bazaar & Reliance Fresh


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Retailing go hand in hand with Indian Economy

Indian Economy:

2nd fastest growing economy in the world

Potential to be the third largest economy in terms of GDP innext few years

Ranks high amongst the top 10 FDI destinations of the world Introduction of Value Added Tax or VAT and tax reforms

High degree of professionalism and corporate ethics

Highly educated English speaking young workforce

Vibrant and multi cultured cities

Huge opportunity exists, especially in semi-rural and rural areas

Fastest growing tourist market in Asia

Indian Retail reflects the Economic scenario of the country


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The contribution of Retail sector to GDP

0

2

4

6

8

10

12

India USA China Brazil

Retail Sector's share in GDP (in %)

Retail ect r's s are i(i )


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FDI in Indian Organized Retail Sector

FDI (Foreign Direct Investment)Indias globalization & liberalization policy

has opened the doors for FDI


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Why India???

Developing economy

Huge & diversified market

Demand is greater

Low salaried employees

Low wage workers

Abundant human resources

Big private economy


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Challenges faced by larger FDI in India

Resource Challenge:

Huge no. of resources in terms ofmanpower, working capital, infrastructure, etc.

Underexploited/unexploited resources in ruralareas

Limited resources in urban areas

Political Challenge:

Limited support from political front

Not encouraging policies for FDI

Proper plan to increase FDI capital in Indian

Economy


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Equity Challenge:

Developing atvery fast rate

Development are uneven, unstructured

More emphasis on urban areas Social equality & balanced growth

Federal Challenge:

Implementation of policies, rules & regulationstowards FDI

Uneven Govt. policies across the country

Benefits to certain cities & states only


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Other challenges:

Poverty reduction

Trade liberalization

Banking & Insurance sector liberalization


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Benefits of larger FDI

Improved human capital: Labor based industries

More professional, trained & skilled worker

Improves quality over quantity

Competition effect:

Launching new products/brands in the market

Increasing competitions, benefits customers

Improves standard of products/services

Improves productivity of Indian companies


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Benefits of larger FDI

Manufacturing employment: Generates employment in the industry

Enhances productivity of labor

Demand in the market generates more production

New technology:

To overcome competition, better quality of

products Again attracts more FDI

Larger FDI can develop rural Indian market and help to

bring socio-economic growth with stability


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Employment generation by Indian

organized Retail Sector Current share in overall employment 8%

Expected to increase the share to 9-10% by

2010 The largest sector after the agricultural in

terms of employment

Current direct employment: 4 Cr.

Current in-direct employment: 20 Cr.

Scope of better exposure to the internationalstandards


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The story Inside




y Retailing in Indiay Recession & Retailing


y

Retailing in India downthe yearsy Case Studies: Big Bazaar & Reliance Fresh


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Challenges faced by Indian Retail industry No brand loyalty among customers Changing customer behavior

Customers want to eat, shop & entertainment underone roof

Lack of retail space, due to high infrastructure cost

Less Development in rural areas

Mushrooming malls in urban areas

Trained & skilled manpower Restricted FDI policies

Discounting has become habit for customers

Strong negotiation power of customers


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Indian Retail industry in Future

Expected to grow @ 10% p.a. by 2010

Expected to cross Rs. 1000 billion in terms of revenueby 2010

FDI will be allowed up to 51% Lots of big foreign players to enter in India, such asWal-mart, Metro, Tesco, Carrefour, etc.

More employment generation in future

Hypermarkets will evolve big time

Hypermarkets will encourage entry of Transnationalcompanies


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Budget 2009-10

Sustain a growth rate @ 9% p.a.

Maintain Agriculture growth rate @ 4% p.a.

Creating 12 million new job opportunities p.a.

Reduce the proportion of population living belowpoverty line

Encourage Export

Strengthen & improve economic regulatoryframework within the country

Create a competitive, progressive and well regulatededucation system

Concentrate on pursuing an Integrated Energy Policy


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Indian Retail industry inF

uture:Potential markets

Hyderabad Coimbatore

Ahmedabad Mumbai

Pune Chennai

Bangalore Delhi NCR Nagpur Luckhnow


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The story Inside







y Retailing in India down the years

yCase Studies: Big Bazaar &Reliance Fresh


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Case Study

&


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Big Bazaar is part of Indias largest retailer Future Group

Falls into a category of Hyper market

Future Group has presence in multiple businesses in the

consumption space: Consumer Finance

Capital

Insurance

Retail Media Mall development

Logistics

Brand Development


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Big Bazaar

Big Bazaar Facts

No. of stores 115+

Parent Group Future Group

CEO, Managing Director Mr. Kishore Biyani

Tagline Is se sasta aur achha kahin nahi

TG Family, especially House-wives


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IndustryCompetitiveness

Threats ofSubstitutes

BargainingPower of

Buyer

Rivalryamong

Competitors

Threats of theEntrants

BargainingPower ofsupplier

Porters five force model


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Porters five force model: AnalysisFiveForces Analysis

Rivalry among Competitors Reliance Retail, Aditya Birla Group,

Vishal Retail , Bharti & Wal-mart, etc.

Threats of the Entrants FDI policy not favorable for international

players. Domestic conglomerates looking tostart retail Chains. International players

looking to Foray India.

Bargaining Power of supplier Itvaries depending upon the target

Segment. The unorganized sector has a

dominant position. There are few players

who have a slight edge over others on

account of being established players and

enjoying brand distinction.


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FiveForces Analysis

Bargaining power of buyers Consumers are price sensitive.

Availability of more choice.

Threat of substitutes Unorganized retail market, new foreignplayers entering in Indian market

Porters five force model: Analysis


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Success story


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Organizational Value & Customer Value Matrix


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Big Bazaar at BCG matrix


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Big Bazaar: SWOT analysis


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Marketing Mix 7 Ps


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Activities Target Marketing Mix

BigWish All the population Process

Baby Registry &MarriageRegistry

Married couple ,waiting for marriage.

Promotion

Women Forum Women Public Relation

Interior decorator anddress designer will be

appointed in all thestore.

Those customer whoarevery specific about

their decision

People

Marketing Strategy


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Activities Target Marketing Mix

Networking throughInternet

All loyal customer ,other net user

E-Marketing

Religion Corner All the aesthetic people Product Mix

Adhar Rural centricMarket

720 million consumersacross 627000villages.

Place

Tie up with IPL Sports lover Promotion

Improving quality ofProduct

Prevailing as well asProspect customer.

Product

Marketing Strategy


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Future Strategy


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Life Cycle..


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Reliance Fresh

y Type Super Market

y Founded - 30 October 2006y Headquarters - Mumbai, India

y Key people - Mukesh Ambani CEO, Reliance Retail

y Tag Line - Growth Through Value Creation

y Website -www.ril.com


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Organized Food Retail Chain


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India.


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Changing Food Behavior


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Retail- A smart choice for modern women


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Reliance Contribution to Indian Economy


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Retailing in India


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Scope ofFood in Retailing


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Domestic Market Scenario


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Information Flow is the key


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Organized Retail: Impact on Prices


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Inclusive Growth for All


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Retail Mantra


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JJ dikhtadikhta haihai,,

WWhihi biktabikta haihai


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The ReThe Re--tale begins from here...tale begins from here...

PunamPunam

ShrutiShruti

SamratSamrat

AmeyaAmeya


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PunamPunam ShindeShindeShrutiShruti LakhamLakham

SamratSamrat SahaSahaAmeyaAmeya DhumalDhumal

retail industry final 100709

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