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Slide 1: RETAIL REVOLUTION Click to edit Master subtitle style 9/8/10
Slide 2: Retail……………………???? 9/8/10
Slide 3: Indian retail on the fast track •The Indian retail market is the fifth-largest retail destination globally. It is estimated to grow from US$ 385 billion in 2007–08 to US$ 405 billion by 2009–10 and to US$ 573 billion by 2012–13. •The Indian retail industry has been growing at a compound annual growth rate (CAGR) of 28 per cent for the last five years and provides employment to 8 per cent of India‘s working population. 9/8/10
Slide 4: Types of Retailers Small/Medium Size Retailer Large scale Retailers Direct Mktg/Channel Retailing 1. Mobile Retailers, Hawkers. Convenience stores. 1.Super Market. 2.Departmental Stores. 3.Discount stores. 1.In home Selling. 2.Telemarketing. 3.Mail Order sale. 4.Vending Machine 2. 3. 4.Manufacturer’s Specialty Stores Showroom 5.Super stores. (Combination Stores,Hypermarkets) 9/8/10
Slide 5: Indian retail revolution • The market is witnessing a migration from traditional retailing to modern/organised retailing formats, with an explosive proliferation of malls and branded outlets. Modern retailing outlets in India are increasingly becoming global in standards and are witnessing intense competition. • 9/8/10
Slide 6: •With a share of over 95 per cent of total retail revenues, traditional retailing continues to be the backbone of the Indian retail industry. •Over 12 million small and medium retail outlets exist in India, the highest in any country. •Traditional retail is highly pronounced in small towns and cities, with a primary presence of neighbourhood 'kirana' stores, pushcart vendors, 'melas' and 'mandis'. 9/8/10
Slide 7: •Organised retailing is growing at an aggressive pace in urban India, fuelled by burgeoning economic activity. •An increasing number of domestic and international players are setting up base in the country and expanding their business to tap this growing segment 9/8/10
Slide 8: Key players in Indian retail … 9/8/10
Slide 9: •Established in 1986 •Current stores: 180 showrooms in 100 cities •Retail area coverage of 2,990,146 sq ft • 9/8/10 Present in India since •Current store formats: Supermarkets •Popular brands: Zero Degree and Fume •Has a factory with 700 imported machines that have the capacity to manufacturer 150,000 pieces a month •10 warehouses
Slide 10: •Established in 1905 •Retail sector activity: Bakery products, food and grocery •Current store formats: Supermarkets •Established as Trinethra1986 , taken over by Aditya Birla Nuvo Group in 2006 and renamed ‗more.‘ •Retail sector activity: Food and grocery, beauty products •Current store formats: Convenience stores, supermarkets, hypermarkets •Future plans: To increase stores •Current outlets: 640 outlets to 100 •Principal fascia: Nilgiris •Future plans: To enter into pharmacy, apparel and footwear •Principal fascia: more. 9/8/10
Slide 11: Policy and regulatory framework … • FDI up to 100 per cent is allowed under the automatic route for cash and carry wholesale trading and export trading. FDI up to 51 per cent is allowed with prior government approval for retail trade in single-brand products. • 9/8/10
Slide 12: Regulatory framework for foreign players to enter Strategic license agreements This route involves a foreign company entering into a licensing agreement with a domestic retailer or partnering with Indian promoter-owned companies. Franchisee route Cash and carry wholesale retailing 100 per cent FDI is allowed in wholesale trading, which involves building a large distribution network. This entry route is widely used by many international brands, who opt for the master franchise route and the regional franchise route for an entry into India. 9/8/10
Slide 13: Manufacturing Distribution Joint ventures International firms can enter into agreements with domestic players and set up base in India. The share of MNCs is restricted to 49 per cent in this route. A company can establish its manufacturing unit in India along with standalone retailing outlets. An international company can set up a distribution office in India and supply products to local retailers. Franchisee outlets can also be set up by this route. 9/8/10
Slide 14: International players interested in the Indian market •Walmart has entered into a 50:50 joint venture and franchisee agreement with Bharti Retail Ltd, and has set up its first cash and carry outlet in Punjab. •India has a growing middle class and many US companies are targeting it for international growth. Coffee chain Starbucks Corp plans to enter India within two years. •Carrefour, French retail major, is joint venture with reliance. 9/8/10
Slide 15: Other opportunities….. With modern retail store formats growing in size, players are increasingly deploying advanced IT tools for managing supply chain, warehousing and logistics requirements. • There is an increasing trend among retailers maintaining their own portals for easy consumer access, facilitating online purchase of merchandise such as Tata Indicom‘s i-choose.in and Godrej & Boyce‘s godrejlifespace.com. • Indian Oil Corporation‘s Kisan Seva Kendra: These offer fuel, agri-produce, FMCG and value-added services across a network of over 1,400 outlets. • 9/8/10
Slide 16: Reliance Retail and Pantaloon Retail: The two companies are likely to venture more aggressively into the rural retailing space. • Asian Development Bank is lending US$ 150 million for the revival of khadi and this is expected to bolster employment in rural areas. • Retailing of regional handicrafts and artifacts has the ability to capture the interest of foreign tourists, given the rich and diverse cultural heritage of India. • 9/8/10
Slide 17: • Most of the retail sector giants have a footprint in these cities and have plans of expanding base owing to the rapid transition of households from the lower-income group to the higher-income group. Rural hypermarkets are growing at an aggressive pace, providing multiple services, from creating platforms to buy and sell farm produce, to forming banks and restaurants in rural sector. • 9/8/10
Slide 18: Thank you 9/8/10