The document discusses the organized vs unorganized retail sectors in India. It notes that the organized sector makes up only 3% of the market currently, but is growing at 35% compared to 6% for the unorganized sector. The organized sector faces challenges like poor supply chain management during aggressive expansion. Meanwhile, the unorganized sector relies on labor intensive technologies and lacks government support. It also provides an overview of the retail industry in India, major players, formats, and trends in consumer spending.

1. Industry Outlook - Retail

2. Organized Vs Unorganized Retail Sector
Organized Retail Sector Unorganized Retail Sector

3. Organized Vs Unorganized Retail Sector
Factor Organized Retail Sector Unorganized Retail Sector
Definition Modern form of retailing Traditional form of retailing
Examples Hypermarket, Retail chain Mom n Pop stores, hand
etc. cart, pavement vendors etc
Market Share 3% 97%
Market Growth 35% 6%
Challenges Poor supply chain Use of labour intensive
management, aggressive technology, lack of
expansion etc. government support etc.

4. Comparative Penetration of Organized Retail
Organized Traditional
15% 19%
45%
70%
80%
93%
85% 81%
55%
30%
20%
7%
USA Taiwan malaysia Indonesia Chaina India
Sources : www.ibef.org

5. Retail Trade – India, USA, China
Country Trade ($b) Employment Shops (mn) Organized
sector
India 180-394 7 1.2 2-3
China 360 12 2.7 20
UAS 3800 12.6-16 15.3 80
Sources : Repot, AC Nielsen

6. Evolution of Retail Industry

7. RURAL
• Contributes major chunk
• More than 65% population lives in Rural
• Spectrum opportunities Rural Retailing to
Luxury Retailing
• 4P’s to 4A’s – Availability, Accessibility,
Affordability ,Acceptability
• Microfinance concept emerging
E.g ITC- E chopal, Project Shakti - HUL

8. Problems in Rural Retail
• Absence of physical communication facility
• Lack of proper mass media & communication
• Seasonal demands
• Illiterate and uneducated people – slow to change
• Underdevelopment & poverty
• Farmers – livelihood depends on monsoon
• Completely Unorganized & Immature market

9. Key Growth Drivers
• Economic Growth
• Demographics
• Urbanization
• Credit availability

10. Exclusive showrooms
Mono/ exclusive either owned or Complete range
franchised out by a available for a given,
branded retail brand certified product
manufacturer
shops quality
Focus on particular
Retail Formats Consumer get to have
Multi-branded retail product categories and
more choices as many
in India shops carry most of the
brands are on display
brand available
One stop shop for
customer, many product
line of different brands on
Convergence Usually have on display most
of the convergence as well as display
retail oultlet consumer electronic
products including
communication and IT goods

11. Different Formats

12. Big Shots of the Industry

13. 1) Pantaloon Retail
2) Raheja Group
3) Reliance Retail
4) Tata Group
5) RPG Group
6) Landmark Group
7) Piramal Group
8) Bharti - Walmart
9) A V Birla Group

14. Pantaloon Retail
 Headquartered - Mumbai -450 stores (India) – employees-
18,000 people.
 All India space- 5 mn sq.ft, expecting to reach 30 mn by 2010.
 Various segment -food & grocery, home solutions, consumer
electronics, Health & Beauty product etc.
 Recent Innovations include e-commerce ‘Hybrid Format of
‘Small shops’

15. Raheja Group
 First Departmental store in India, SHOPPER’S STOP
 Member of IGDS
 7,52,000 sq.ft. retail space with turnover of 6.75 millions
 Crossword, Mother care, Home stop etc.
 MOU with Home retail group of UK
 Plan establish network of 55 hypermarkets across the country
-sales turnover of US$ 100 million by2010.

16. Reliance Retail
 More than 300 Reliance fresh store and first Reliance Mart
hypermarket in Ahmedabed
 Expansion in two tier cities like Vijaywada, Pune, Ludhiana etc
 Investment of Rs.30,000 cr to set up new formats of retail ,
expecting sales of Rs.90,000 cr by 2010

17. Tata Retail Group
 Established in 1998
 Trent- subsidies of Tata group operates Westside and Star
India Bazaar, Croma
 Plans to pen more than 27 stores across its retail formats
adding 1.5 mn sq.ft. of space in the next 12 DLF malls

18. A V Birla Group
 Strong presence in apparel- Madura Garments
 Owned Brands like Louis Phillipe, Van Heusen, Allen Solly,
Peter England
 Investment plan – Rs.8000-9000 cr in the first 3 years till 2010
 “MORE” range of 15 supermarkets open at Nashik, Pune &
other two tier cities

19. Merger & Acquisition
Considerati
Year Acquired/ JV Company on
/ Target
Acquirer Nature of Business Stake (US$
million)
2005 Liberty shoes Future Group Retail (footwear) 51% 3
2005 Indus- league clothing Future Group Retail Clothing 68% 5
2005 Odyssey India Deccan Leisure Retail chain 100% 14
Chronicle (books, music, toys)
holdings
2005 Landmark Tata Trent Books, Music, 74% 24
Accessories
2006 Bistro hospitality TGI Friday’s Restaurant 25% N/A
2006 Indus League clothing Etam Group, Lingerie & women’s 50% 8
France wear retailing
Sources : www.indianretailforum.com

20. Current Potential & Prospect of Indian Retail
Sector

21.  Growth prospective
 Hurdles in growth phenomenon
 Supportive measures by Government
 Current market meltdown & its impact
 Overall scenario about Indian retail industry

22. Changing face
of Indian
Consumerism

23. Important Trends
• The whole concept of shopping ……change
• Heavy pockets …
• The Mall Mania…
• Mall ….. Shopping + Entertainment

24. Map of India’s Income class
1994 – 1995 1999 – 2000 2011 – 2012
Rich (Annual income >US$ 4700) 1 mn household 3 mn HH 8 mn HH
Benefit Maximize: Owns CAR, PC
Consuming (US$ 1000- 4700) 29 mn HH 55 mn HH 82 mn HH
Cost-benefit optimizer:
have bulk of branded consumer goods,
70% of 2-wheelers,
refrigerators,
washing machine
Climbers (US$ 500-1000) 48 mn HH 66 mn HH 83 mn HH
Cash-constrained benefit seekers:
have at least one major durable(mixer,
sewing machine, television)

25. Map of India’s Income class
1994 – 1995 1999 – 2000 2011 – 20012
Aspirants (US$ 350-500) 48 mn HH 32 mn HH 39 mn HH
New entrants into consumption:
have bicycle, radio, fans
Destitute (Less than US$ 350) 35 mn HH 24 mn HH 20 mn HH
Hand to mouth existence: Not
buying
Source: Ernst & Young

26. Consumer Dynamics
• Youngest population on the globe
• Growth pace of the Indian economy
• 93% retail market is untouched by organized
retailers
• Food & Grocery …………………. 55%
• Consumption is moving out of the home
• Indian consumers has grown richer…

28. Strengths weakness
Technology Incentive Low conversion level
Super Market Stocks Customer Loyalty
Rising Disposable Income Underdeveloped supply chain
Increase in number of people in earner Lack of adequate utilities
category.
opportunity threat
Large consumer market High market share of unorganized market
Growth of Organized sector Shopping Culture
Rural Retailing Poor inventory turns & stock availability
Potential for Investment measures.
Inflation