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The Indian Retail Scene
With a three-year compounded annual growth
rate of 46.64 per cent, retail sector is the fastest
growing sector in the Indian economy.
Traditional markets are transforming themselves
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By 2010, organized retailing in India will cross the
US$ 21.5-billion mark from the current size of US$
7.5 billion.
The Indian retail market is of enormous size about
US$ 8 billion.
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Global Retail Development
Index,
Country
2008
2008 2007 Change
Rank Rank
Vietnam 1 4 +3
India 2 1 -1
Russia 3 2 -1
China 4 3 -1
Egypt 5 14 +9
Morocco 6 15 +9
Saudi Arabia 7 10 +3
Chile 8 6 -2
Brazil 9 20 +11
Turkey 10 13 +3
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Countdown to India's retail revolution.
Jobs in demand.
TOP 10 Recruiters.
Key retail formats
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Countdown to India's
retail revolution
The economy is growing by 8% a year, its stock
market rose by nearly 40% in 2005 and foreign
investors are flooding in.
There are about nine million small grocery shops in
India.
It is estimated that 70 million Indians in a population
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Job roles in demand Comments
Customer Responses received from companies
care and from the sector show that in the year 2006
sales executives companies faced shortage in the following
Category / line / professional categories –
floor managers
Merchandisers • Operations / shop floor executives:
Visual shortage to the extent of 20%
merchandisers • Visual merchandisers: shortage to the
Store managers extent of 50%
• Purchase managers / merchandisers:
shortage to the extent of 30%
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Employment Index
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TOP 10 Recruiters in
Recruiters Retail SectorTotal No. Of
Vacancies
1. Metro 79
2. Trent Ltd. 30
3. Pantaloon Retail India Ltd 21
4. Shoppers Stop 17
5. Spencer 16
6. Big Bazar 16
7. Aditya Birla MORE 13
8. Vishal Retail 11
9. Citi Mart 8
10. Eagaro HASSAN AL BANNA
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KEY RETAIL FORMATS
Cultural and regional differences in India are the
biggest challenges in front of retailers. This factor deters
the retailers in India from adopting a single retail format.
Hypermarket is emerging as the most favorable format
for the time being in India.
The arrival of multinationals will further push the
growth of hypermarket format, as it is the best way to
compete with unorganized retailing in India.
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What is Recession ?
What causes recession ?
Impact on India.
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What is Recession
A recession is a contraction phase of the
business cycle.
National Bureau of Economic Research is the
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What causes Recession
An economy typically expands for 6-10 years and
tends to go into recession for about six months to
2 years.
A recession normally takes place when
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Impact on India
Despite the global economic slowdown, Indian
retailers are still optimistic about the India growth
story.
The India economy is likely to lose between 1 to 2
percentage points in GDP growth in the next fiscal
year. The Indian economy is more stable than other
economies across the world.
Fashion retail has not been impacted in a big way.
Not even 0.5 per cent of the working population has
been hit in India
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Subprime losses till date
Bank Losses
Citigroup $18.0 billion
UBS $13.5 billion
Morgan Stanley $9.4 billion
Merrill Lynch $8.0 billion
HSBC $3.4 billion
Bear Stearns $3.2 billion
Deutsche Bank $3.2 billion
Bank of America $3.0 billion
Barclays $2.6 billion
Royal Bank of Scotland $2.6 billion
IKB $2.6 billion
Societe Generale $2.0 billion
Freddie Mac $2.0 billion
Wachovia $1.1 billion
Credit Suisse HASSAN AL BANNA $1.0 billion
Red Marker - 1991 to 1994 - Congress
Green Marker - 1995 to 1997 - United Front
Blue Marker - 1998 to 2003 - BJP
Red Marker - 2004 to 2008 - Congress
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Growth drivers.
Productivity in retail industry.
India retail - stats
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The Growth Drivers
Demography Dynamics: Approximately 60 % of
Indian population below 30 years of age.
Double Incomes: Increasing instances of Double
Incomes in most families coupled with the rise in
spending power.
Potential for Investment: The total estimated
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Sectors with High Growth Potential: Certain
segments that promise a high growth are o Food
and Grocery (91 %) Clothing (55 %) Furniture
and Fixtures (27 %) Pharmacy (27 %) o
Durables, Footwear & Leather, Watch &
Jewellery (18 %).
Fastest Growing Formats: Some of the formats
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Productivity in retail
Retail
industry
2005 2006 2007
in India
2008 2009 2010
Trade
Retail Sales 15,409 17,360 19,465 21,715 24,215 27,107
(Rs Bn)
Retail sales 349.4 385.8 421.3 467.0 516.3 564.7
(US$ Bn)
Retail Sales 6.0 7.5 7.7 6.9 6.8 7.3
volume
growth (%)
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India retail : 2006
Retail Segments India Retail Value Organized Retail % Organized in
(Rs.Crore) (Rs.Crore) 2006
bn/annum
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Annual rate of growth (modern retail): 35% .
Penetration (modern retail) 2006: 3 to 4%.
bn/annum.
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Yardstick Situation in 04-05 Situation in 07-08
Value of retail sales Rs. 10,20,000 crore Rs 12,00,000 crore
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Promoter/chairman/ Company /group Value of equity Business
family head holdings (Rs
crore)
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Market.
Retail space.
Why Asia remains the leader.
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Market
Investment
New Investment by 2011: US$ 30 bn
Employment
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Retail Space
Typical space per outlet: 100 to 500 sqft.
Space occupied (modern retail): 35 mn sqft.
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Why Asia remains the
leader
Asia leads the world in labor productivity growth at
3.4%.
East Asia has rebounded strongly from its 1997-
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India leads South Asia with 3.4% productivity growth
between 1995 and 2002.
Japan experienced a significant acceleration in per
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Critical areas to watch for significant improvement in
living standards are China, which has 28% of all the
world’s jobs, and India (15%).
India’s productivity is growing at 3.5%.
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Retail updates
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KEEP YOURSELF UPDATED
Wal-Mart and Bharti in India deal
The outlets will sell fruit and vegetables and other items.
It plans to employ about 5,000 people selling groceries,
consumer goods, fruits and vegetables.
The first Bharti Wal-Mart Private Limited cash-and-carry
store is set to open by the end of 2008.
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Reliance Retail
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Modern’ retail is poised to grow into a $450
billion business by 2015
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The Future Group
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Young Indians will drive growth of ‘modern’ retail
in India
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Miscellaneous Updates
Costa Coffee plans to aggressively expand retail network
in India.
Toy maker ‘Hanung’ announces seven-fold expansion of
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Italian luxury fashion major ‘Diesel’ announces joint
venture with Reliance Brands.
Shoppers Stop and Vishal decide to moderate
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In partnership with the Future Group, Axiom Telecom
(a mobile retail company from West Asia) will be
forming a joint venture company called Future Axiom
Telecom Ltd. The 50:50 JV plans an initial investment
of around US$ 40 million, and targets setting up
1,500-outlets by the end of December 2009.
Spencer's Retail will be establishing 300 additional
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Similarly, ITC's Wills Lifestyle and John Players plan to
expand their presence in tier II & III cities, increasing
their retail space around 15-20 per cent. Currently, there
are over 50 Wills Lifestyle stores in India.
Shopper's Stop is also planning to invest US$ 205.78
million for increasing its present store space of 1.3
million square feet to 2.7 million square feet over the
coming 3-4 years.
Tata Group's Trent, (which operates Westside), is
planning to add 8-10 stores every year to its present 31
store in India.
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Conclusion
Against the background of the first economic crisis of the
global era and the resulting uncertainty in many markets, it
is clear that retailers can no longer operate or think in
isolation. The 2009 Congress will take place in Barcelona
on 6-8 May 2009. With its reputation and influence growing
around the world it is set to continue to attract industry
leaders. World Retail Congress is the most influential and
highest profile gathering of the retail industry across all
sectors at global level.
Thus, it indicates that the show must go on.
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