TRENDS IN RETAILING
Presented by :
D.Soma shekhar reddy
The oxford college of business management
The Indian Retail Sector –
Business Understanding
TRENDS IN RETAILING
RETAIL:
The word RETAIL is in fact
derived from the french word
RETAILLIER which means to cut off a
piece (or) to break bulk.
3
RETAILING:
Retailing can hence be considered as
the last stage in the movement of goods
(or) services to the consumer. Put simply
any firm that sells products to the final
consumer is performing the function of
retailing. It thus consist of all activities
involved in the marketing of goods and
services directly to the consumers for
their personal, family (or) household use.
4
TOP5 RETAIL STORES IN
WORLD:
• 1.WAL MART u.s.a 1383000 employees.
• 2.TESCO u.k 171794 employees.
• 3.CARREFOUR france 382821 employees.
• 4.HOMEDEPOT u.s.a 256300 employees.
• 5.KROGER u.s.a 288000 employees.
5
FACTS ABOUT RETAIL IN
INDIA:
* India is 2nd fastest growing
economy in the world.
* More English speaking people.
* 2nd most attracting developing
market, head of china.
* AT Kearney has estimated India's
total retail market at US $ 202.6
billion which is expected to grow at
a compounded 30% over
the next five years.
6
TOP 10 RETAIL PLAYERS IN INDIA:
• Shoppers' Stop (k.raheja)1991.
• Westside (Trent) (tata)1998.
• Pantaloon (Big Bazaar) (future group)1997.
• Lifestyle (land mark group)
• RPG Retail (Foodworld, Musicworld) (rpg enterprises)
• Crossword (shopper’sstop)1992.
• Wills Lifestyle (itc)
• Globus (rajan raheja group)1998.
• Piramals ( Pyramid & Crosswords) 1999.
• Ebony Retail Holdings Ltd. 1994.
7
IMPACT OF MNC’S ENTER INTO RETAIL
MARKET IN INDIA:
• FAVOURABLE IMPACTS:
The job opportunities are high in retail industry.
The customers enjoy and experience the shopping.
The good quality products with lower cost because
of no intermediaries.
• Unfavorable:
The local vendors (or) street vendors are very
much affected.
8
Driven from Consumption Throughout the 1.1 Billion
Population
5-7 million
Super Rich
70 – 80 million
Afford Cars, Private Healthcare &
Foreign travel
250 - 300 million
Afford goods like Refrigerators , Scooters
& Colour TVs
600-700 million (Generally Rural)
verty Line = income less than $ 1/day Afford simple industrial products
e.g. bicycles , radios , textiles
60 % of India’s population are under 24 years
ource: McKinsey,
Evolution of Indian retail
Historic/Rural Traditional/Pervasi Government Modern Formats/
Reach ve Reach Supported International
Exclusive Brand Outlets
Hyper/Super Markets
Department Stores
Shopping Malls
PDS Outlets
Khadi Stores
Cooperatives
Convenience Stores
Mom and Pop/Kiranas
Weekly Markets
Village Fairs
Melas
Source of Neighborhood Availability/ Shopping
Entertainmen Stores/Convenie Low Costs / Experience/Efficie
t nce Distribution ncy
Recent Trends
Traditionally three factors
have plagued the retail Recent with
Experimentation changesformats::
Unorganized : Vast majority of the
industry: Retailing in India is still evolving and the
sector is witnessing a series of
twelve million stores are small "father
experiments across the country with new
and son" outlets formats being tested out. Ex. Quasi-mall,
sub-urban discount stores, Cash and carry
etc.
Fragmented : Mostly small
Store design : Biggest challenge for
individually owned businesses, organized retailing to create a “customer-
pull” environment that increases the
average size of outlet equals 50 s.q. ft. amount of impulse shopping. Research
Though India has the highest number shows that the chances of senses
dictating sales are upto 10-15%. Retail
of retail outlets per capita in the world, chains like MusicWorld, Baristas, Piramyd
and Globus are laying major emphasis &
the retail space per capita at 2 s.q. ft investing heavily in store design.
per person is amongst the lowest.
Emergence of discount stores: They
are expected to spearhead the organized
Rural bias: Nearly two thirds of the retailing revolution. Stores trying to
emulate the model of Wal-Mart. Ex. Big
stores are located in rural areas. Rural Bazaar, Bombay Bazaar, RPGs.
retail industry has typically two forms:
Unorganized retailing is getting
"Haats" and “Melas". Haats are the organized: To meet the challenges of
organized retailing such as large
weekly markets : serve groups of 10- Cineplex's, and malls, which are backed
50 villages and sell day-to-day by the corporate house such as 'Ansals'
and 'PVR‘ the unorganized sector is
necessities. Melas are larger in size getting organized. 25 stores in Delhi
under the banner of Provision mart are
and more sophisticated in terms of the joining hands to combine monthly buying.
goods sold (like TVs) Bombay Bazaar and Efoodmart formed
which are aggregations of Kiranas.
India vs. World
• Indian retail is fragmented with over 12 million outlets operating in the country.
This is in comparison to 0.9 million outlets in USA, catering to more than 13
times of the total retail market size as compared to India
• India has the highest number of outlets per capita in the world - widely spread
retail network but with the lowest per capita retail space (@ 2 sq. ft. per
person)
• Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than
the size of Indian retail industry. Almost 100 times more than the turnover of
HLL (India's largest FMCG company).
• Wal-Mart - over 4,800 stores (over 47 million square meters) where as none of
India's large format store (Shoppers' Stop, Westside, Lifestyle) can compare.
• The sales per hour of $22 million are incomparable to any retailer in the world.
Number of employees in Wal-Mart are about 1.3 million where as the entire
Indian retail industry employs about three million people.
• One-day sales record at Wal-Mart (11/23/01) $1.25 billion - roughly two third of
HLL's annual turnover.
• Developed economies like the U.S. employ between 10 and 11 percent of their
workforce in retailing (against 7 percent employed in India today).
• 60% of retailers in India feel that the multiple format approach will be
successful here whereas in US 34 of the fastest-growing 50 retailers have just
one format
12
Recent Trends
Retail Sales in India
• Retailing in India is witnessing a
huge revamping exercise as can
be seen in the graph
• India is rated the fifth most
attractive emerging retail
market: a potential goldmine.
• Estimated to be US$ 200 billion,
of which organized retailing (i.e.
modern trade) makes up 3
percent or US$ 6.4 billion
• As per a report by KPMG the
annual growth of department
stores is estimated at 24%
• Ranked second in a Global Retail
Development Index of 30
developing countries drawn up
by AT Kearney.
13
India Retail Market
• 720 million Indians to join consuming age by
2010
• 55% of the Indian population will be under 20
years of age by 2015
• 32% rise in urbanization by 2008
• 10% annual growth in Retail market since 2000
• 7% of the population is engaged in retailing
• A booming US$ 300 billion retail market in India
• 5.5 retail outlets per 1000 population, highest in
the world
• 25-30% annual growth in retail loans and credit
cards
Format-wise urban investments in retail
expected in next 5 years
FORMAT % SHARE
Hypermarket 38%
Supermarket 28%
Specialty Store 22%
Cash N’ carry 16%
Department Stores 2%
Source: Technopak Analysis
Indian Organised Retail is set to explode
with Food & Lifestyle retail as major
segments
3 SBU’s covering 88% of market segment!!
Evolving consumer preferences
!
Indian consumers are evolving…
• From traditional to…
…. modernized traditional
• From globalize to…
… Indianise
• From functional to…
… lifestyle
17
Evolving consumer
preferences
Indian consumers are evolving…
!
• From value for money to…
… value for time and convenience
• From cautious to…
… experimentation
From over-the-counter to…
… touch-and-feel
18
Tasks for suppliers !
Participate in Agri Infrastructure: Logistics
19
THE CHANGE… A SHIFT
FROM SHOPS TO BRANDS
FROM TALKIES TO
MULTIPLEX
FROM KIRANA TO MALLS…
Recent Trends …..
• The retail sector has played a phenomenal
role throughout the world in increasing
productivity of consumer goods and services.
• The Retail Industry in India has come forth as
one of the most dynamic and fast paced
industries with several players entering the
market. But all of them have not yet tasted
success because of the heavy initial
investments that are required to break even
with other companies and compete with
them. The India Retail Industry is gradually
inching its way towards becoming the next
boom industry.
Final words……..
Message to Retailers:
•Evolve your all strategies around customers.
•Focus on building brands to reap the fruits in future.
•Keep growing.
•“Customers is king of Past and now the Emperor of
Future.”
Message to Customers:
“Enjoy the Kingdom of Retailers”
