1. Presentation On Future Of Indian Retail Sector -
Share of Retailing in Employment Across
Different Countries Country
Employment(%) India 8% USA 16% Poland
12% Brazil 15% China 7% Source:
Presentation to FICCI by Alan Rosling
(Chairman, Jardine Matheson Group):
“International Experience on Policy
Issues.”

2. Retail Trade in India and South East Asia
•Highest shop density in the world.
•Around 12 million shops around the country.
•Just 0.9 million in the US, catering to more than 13
times of the Indian retail market size.*
•Around 11 shops for every 1,000 peoples.*
•Potential to become $300 billion per year market
•by2010.
* Source: Singhal,Arvind; KSA technopak An overview
of Indian retail sector

3. Rural Retail Market
Rural India consists of 720 Million consumers
across 627,000 villages
17% of these villages account for 50% of the rural
population and 60% of the rural wealth implying
reaching out to almost 100,000+ villages to
address even 50% of this rural opportunity
Source: Navdanya/ Research Foundation for Science, Technology and Ecology Indian Retail
Sector : Bases Of Ownership, 5-6th Nov. 2003, www.ficci.com

4. India #1 Emerging Retail Growth Market Source:- A.T.
Kearney Global Retail Development Index (GRDI)
Average Sales Per Sft Per Annum
...High Private Consumption Source : Central Statistical
Organization (CS0) and Technopak Analysis GDP US$804 Bn
Private Consumption US $ 482 Bn(60%) Public Spending &
Gross Capital Formation 40% Retail US $ 300 Bn (62%) Non-
retail US $ 182 Bn (38%) Urban US$ 135 Bn (45%) Rural US $
Bn(55%)

5. Size of the Economy Sources • 2006
GDP :Central Statistical Organization
(CS0) • Growth Rates :Goldman Sach’s
BRIC report (For details please refer to
the appendix of this presentation)
Growing retail market Source:- KSA
Technopak analysis

6. Spontaneous Transformation
Investments in the range of US$ 22+ Billion expected in
the next 5years in Retail & its Supply Chain alone
Size of modern retail likely to touch US$ 60 - 75 Billion
by 2011-12 implying about 15% - 18% share of modern
retail
At least 2.5 Million additional direct jobs likely to be
created in the next 5 years
In short :
India attempting to do in 10 years what took 25 – 30
years
India shall bypass many stages of “Modern Retail
Evolution”
F.D.I.
Why Only India....? India's GDP Growth Second
Highest In The World

7. F.D.I.
Why Only India....? India's GDP
Growth Second Highest In The World

8. The Youth Brigade Takes Charge
India has world's youngest population
As of today, 66% (over 740 million) of Indians are under 35 years, and
about 50% (over 550 million) under 25 Years. By 2020, 61% of Indians
will be under 35, i.e. about 780 million Indians will be in this age
group.
According to the National Sample Survey, the literacy rate recorded
an increase of 13.17% points from 1991 to 2001 and literacy in India
is likely to touch 75% by 2020.

9. Workforce Gender Bender
The number of female heads of
households grew by 16% from 2000
to 2003
In type-A cities, 72% of teenaged girls
want to work after marriage
Working women form 15% of the total
urban female population and
this is expected to rise to over 20% by
2020
Increase in ratio of working women

10. Baby Boomers
Apparel: Rs.2209 crores
IT Products: Rs.1978 crores
Stationery: Rs.621 crores
Health & Beauty (not including cosmetics or services):
Rs.415 crores
Toys: Rs.389 crores
Indian kids spend nearly Rs.291 crores as pocket money,
as per recent
estimates
According to an international survey, brand loyalty starts
by 11 years of age

11. F.D.I. GOOD OR BAD?
1 Wal-Mart USA 256329 43.7 79.1 20.9 2 Carrefour
France 79609 77.4 50.7 49.3 3 Ahold Netherlands
63325 84.0 15.8 84.2 4 Metro Gr German 60532 50.5
52.9 47.1 5 Kroger USA 53791 70.2 100.0 0.0 6 Tesco
UK 50326 74.6 80.1 19.9 7 Target USA 48163 17.8
100.0 0.0 8 Rewe German 44251 75.6 71.4 28.6 9
Costco USA 41693 61.0 81.5 18.5 10 Aldi German
41011 83.6 63.0 37.0 Source: M+M Planet Retail
(www.planetretail.net) Top 10 retail Giants Rank
Company Origin Net Sales-03 ($mn) Grocery Sales (%)
Domestic Sales (%) Foreign Sales (%)
Wal-Mart’s : Backdoor Entry
The World Of Wal-Mart

12. Issue of F.D.I or Wal-Mart ?
It is the issue of Wal-Mart
,than FDI
Due to the its working style
- It works on “MONOPSONY”
- It works on “EDLP”
- Low no. of employees

13. Wal-Mart v/s Indian Retail Wal-Mart Indian Retail
The largest retailer in the world
Turnover of $ 256 bn.
Avg.annual growth of 12-13%.
In 2004 net profit was $9,000 mn
4806 stores employing 1.4 mn
(1355 outside US)
Avg. size of Wal-mart is 85,000 sq.ft
Avg. turnover of a store was $ 51 mn
Turnover per employee $ 175,000.

14. Country of “Dukandaars”
Turnover of Rs. 735,000 crores
12 million stores employing
3.95 mn
4% are larger than 500 sq.ft
average Indian retailer
turnover of Rs. 186,075

15. F.D.I – Numerous Jobs?
Organized :- 5 lakh
unorganized :- 3.95 crores
Wal-Mart example:-
> To open an average Wal-Mart store – Avg.Performance / Store
> Means Rs. 80,330 Mn turnover/store
> With only 10195 employees means displacing 4,32,000 persons
Efficiency and improvement of living
standards
Consumer will be benefited
Technology introductions
More jobs in Mfg.

16. F.D.I : Good
Labor displacing
Destroying traditional retailing
Opening of a giant pipeline of cheaply sourced
goods from
China, Thailand, ASEAN, etc.
post industrialization without industrialization
F.D.I : Bad
Impact On : Traditional Retailers & Modern Retailers
Impact confined to perhaps 300,000 to 500,000
retailers across India
Only hold on FMCG market
Universe to be increase by 2011 and even by 2015

17. Traditional Retailers
Impact Area : Modern retailers
Come under severe pressure
Most have weak business processes and IT
system
No investment on supply chain
No real margin drivers for near future

18. Some Information
If you assume 40 mn adults in the retail
sector, it would translate into around 160
million dependents using a 1:4
dependency ratio.
70% of merchandise in Wal-Mart contains
components made in China.
* Planet Retail, December 2, 2005
Wal-Mart has an established network of
10, 000 suppliers in China.
TREM: Technopak Retail Evolution Model Not
So Bad News, Yet ! Source: KSA Technopak
For The Key Categories Stocked By The
Kirana Stores
G1 Shift In Channel Mix Reduced by 16%
Grows by 28%
G2 Shift In Channel Mix Reduced by 18%
Grows by 34%
G3 Shift In Channel Mix Reduces by 8%

19. Lessons From Other Countries
From Malaysia :-
One hypermarket is permitted per
350,000 people and no new hypermarket
is
permitted within 35 km of existing town
centers or housing estates.
From Thailand:-
Large retail stores have to be located at
least 15 km from the commercial centers
of
provincial towns

20. Lessons From Other Countries contd. From China:- In year
1994- 26% cap In year 2002-49% cap In year2004-100% cap
Kishore Biyani’s-Fair Price Store “ After the fight in organized
retail with biggies entering it, now its turn of unorganized
market to hot up.” -Times Of India
Small retail offer different combinations of prices (better
prices offered by large
formats) and convenience (offered by small retail), or
purchasing costs to the
consumer (including cost of travel, distance moved inside
store, time lost in
choosing products, time lost in checkout line etc.)
The consumers have distinct preferences in relation to
price and convenience.
Competitive Advantage Of Small Retailers

21. Giants Coming To Support Good News For
Small Retailers Small retailers are likely to
witness support from suppliers with players
like HUL, Marico, Godrej & Tata Tea already
helping ‘Kirana’ stores in store design,
inventory management, computerization and
accounting systems

22. Whisper Started
Associativism
Rajkot Small Retailers Association and All India Association of
Pharmacists are current examples in India which have been
formed to centralize purchasing
Large investments are anticipated in wholesale cash & carry
format in coming year, which would help provide small retailers

23. T H A N K Y O U !