Post on 12-Apr-2017
transcript
RETAIL SECTOR
According to Philip Kotler “retailing includes all the activities involved in selling goods or Services directly to final consumers for personal , Non business use”.
“Every sale of Goods and Services to final consumer” – Food products, apparel, movie tickets; services from hair cutting to e-ticketing.
THE LARGEST PRIVATE INDUSTRY IN WORLD ECONOMY
0.3
0.8
1
1.1
1.2
1.4
2
3.2
5.1
6.6
Pharmaceuticals; diagnostice
telecom
Automotive
Electronics
Energy
Chenmicals
Packaged goods
Construction / Engineering
Financial services
Retail
HIGH PRIVATE CONSUMPTIONGDP
US$ 935 billion
Private ConsumptionUS$ 580 Billion
(62%)
Public Spending and Capital Formation
US$ 355 Billion (38%)
Retail US$ 342 Billion
(59%)
Non RetailUS$ 238 Billion
(41%)
Urban (5,100 towns) US$ 154 Billion
(45%)
Rural (6,27,000 villages)US$ 188 Billion
(55%)
Modern retail – US$ 12 billion 8% of urban retail spends
Modern retail Negligible
FoodApparel
BeveragesFootwearConsumer durables
AppliancesStationery
Kitchen utensils
FurnitureFurnishings
Sports goodsHealth & Beauty
Personal CareJewelleryTiming
Transport Communicati
onRecreation
Cultural Services
EducationRent
UtilitiesOther
Services
ORGANIZED RETAIL , REVENUE AND VOLUME GROWTH
Total size of retail $300blnSize of organized retail $8bln% share of Organized retail 3%
CHALLENGES
Retail
Skilled workers
Competition
Real estate
Problem
Market Power
Supply Chain
Management
Problem in Raising
Fund
Inflation
TIMELINE OF RETAILING IN INDIA
India is the third-most attractive retail market for global retailers among the 30 largest emerging markets, according to US consulting group AT Kearney’s report published in June 2010
RAPID TRANSFORMATION
Current Size & Future Projections for Indian Retail Market
342 373 408 445 486 530
800
12 18 26 39 59 87200
0100200300400500600700800900
2007 2008 2009 2010 2011 2012 2017
US$
Billi
on
Total Retail Organized Retail
• Current GDP ~ $1 trillion• 4th largest in terms of GDP (PPP)
terms• Target customer base 405 mn.• Growth rate likely to be sustained
above 8%• Changing consumer behavior -
consumerism• Growth in availability of
infrastructure and mall space
New Delhi
Bangalore
Mumbai
Chennai
Kolkata
Ahamabad
HyderabadPune
Above 10 Mn inhabitants
Above 4 Mn inhabitants
Above 2 Mn inhabitants
Above 1 Mn inhabitants
Kanpur
Lucknow
Jaipur
Nagpur
Coimbatore
Bhopal
Madurai
Kochin
Varanasi
Visakhapatnam
Patna
Indore
Surat
Vadodara
Ludhiana
WIDELY SPREAD RETAIL INDIA
RECENT TRENDSExperimentation with formats: Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. Ex. Quasi-mall, sub-urban discount stores, Cash and carry etc.
Store design : Biggest challenge for organized retailing to create a “customer-pull” environment that increases the amount of impulse shopping. Research shows that the chances of senses dictating sales are upto 10-15%. Retail chains like MusicWorld, Baristas, Piramyd and Globus are laying major emphasis & investing heavily in store design.
Emergence of discount stores: They are expected to spearhead the organized retailing revolution. Stores trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay Bazaar, RPGs.
Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large Cineplex's, and malls, which are backed by the corporate house such as 'Ansals' and 'PVR‘ the unorganized sector is getting organized. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.
Recent changes
Unorganized : Vast majority of the twelve million stores are small "father and son" outlets
Fragmented : Mostly small individually owned businesses, average size of outlet equals 50 s.q. ft. Though India has the highest number of retail outlets per capita in the world, the retail space per capita at 2 s.q. ft per person is amongst the lowest.
Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry has typically two forms: "Haats" and “Melas". Haats are the weekly markets : serve groups of 10-50 villages and sell day-to-day necessities. Melas are larger in size and more sophisticated in terms of the goods sold (like TVs)
Traditionally three factors have plagued the retail industry