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Retai

l
Sector in
India

Evolution of Retailing in India


Historic/Rural
Reach

Traditional/Pervasi
ve Reach

Government
Supported

Modern Formats/
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
Entertainmen
t

Neighborhood
Stores/Convenie
nce

Availability/
Low Costs /
Distribution

Shopping
Experience/Efficienc
y

Sector Overview: Indian Retail Sector

> USD 500 billion

> 20% growth

Total Sales

from 2012-2014

8%
Organized Retail
Sector Share in India

Global Retail Developmen


Index

Sector Rank of India

Sector Overview: Indian Retail Sector

Indian Retail Sector: Segmentation


Indian Organized Retail Sector
Consumer Electonics
Pharmacy
Jewellery
Food Service
Telecom
Apparel
Others
Food & Grocery
0%

10%

20%

30%

Geographical distribution of Retail Outlets


Metros

Mini Metros

Tier 1

40%

50%

Gujarat

60%

70%

8%

Tier 2 & below


Tamil Nadu

15%

8%

Uttar Pradesh

8%

Andhra Pradesh

8%

45%
29%
11%

Maharashtra
0%

12%
2%

4%

6%

8%

10%

12%

14%

Indian Organized Retail Sector: Food &


Grocery Stores

Organized Retailers Business Model


Outlet A
Farmers

Companie
s/ CFA
Agents

Outlet B

Central
Wareho
use

Importers

Others

Custome
rs

Processi
ng Unit/
Packagi
ng unit
Outlet C

Outlet D

Customer
Relationships

Key Activities

Key Partners
Farmers
Companies

Includes
planning,
purchase and
control to
optimize
product depth
and mix to
satisfy TG

Shopping
Ambience
Larger
Variety

C& F Agents
Importers
Distributors

Value
Propositions

Key Resources
Shelf Space
Higher Variety
Financial
Strength

Providing
access to
multiple
brand
Creating a
shopping
experience

Global

Brands
around the
world

Channels

Convenience

Outlets

Cost
Advantage

Cost structure
Fixed Store Cost / Variable Store
Rental & maintenance

Customer
Segments

Strivers
Seekers

B2B Business

Revenue Streams
Major revenues from food & grocery

Variable cost in terms of payment to


farmers, companies, etc

FMCG, Consumer Durables

Variable Employee, store development


cost.

Net Profit: 10-12%

Net Sales: 1.25-1.5 crores per month

Organized Retail STP


Segmentation
Tier

Annual Disposable
Income

Tag

Description

Tier
1

>10 lakh

Globals

Rich execs, businessmen & nouveau


rich

Tier
2

5-10 lakh

Strivers Urban professionals & govt


employees

Tier 2-5 lakh


Seekers Fresh college grads, med-scale
3
businessmen
Positionin Description
Organized Retail
Tier
90k-2 lakh
Aspirer Small shopkeepers, farmers
g
4
s
Strategy
Tier
<90k Includes planning,Deprive
and to
Unskilled
workers
Merchandi
purchaseLow
andskill
control
Generally
top
5
d
se
optimize product depth
and mix to satisfy
notch
Manageme TG
nt
Store
Image

Mental picture of the store-ads, services,


layout, personnel & product quality, depth
and breadth

Better tapped by
organized sector

Personnel

Help build customer loyalty and store image

More professional

Organized Retail Key Business Drivers

Business Driver
Infrastructure
Economic
environment
Demographic factors
FDI in retail
Real-estate growth
Consciousness among
customers
Urbanization
Household income
increase
Retail ancillary
development
Availability of

Rank
1
2
3
4
5
6
7
8
9

Organized Retail Competitive Landscape


Key Players
Pantaloon Retail (Future GroupBig Bazaar)

Current Situation

Shoppers Stop (K Raheja)

3.21 million ft2 retail space, 23 cities, 51 stores

Spencers Retail(RPG)

1 million ft2, 45 cities, 200 stores

Lifestyle Retail (Landmark)


Bharti Retail

Lifestyle stores- 15, Home Centres- 8


Easyday stores- 74 (will invest $2.5 billion to add 10 million ft 2 of retail space by
2020)

Reliance Retail

700 stores, Revenue- 7,600 crore

More (ABG)

575 stores, Revenue- 2,000 crore

Star Bazaar (Tata Trent)

Westside stores- 59, Starbazaar hypermarkets- 13, Landmark bookstores- 26

2 million ft2 retail space, 35 cities, 65 stores, 21 factory outlets