PRESENTATION ON FOOD & GROCERY SECTOR IN INDIA

By Arijit Ghosh, Saikat Biswas, Bidyut Mondal & Rounak Basu

1

OVERVIEW - SECTOR ANALYSIS

• MARKET SIZE - The food and grocery (F&G) market is the biggest retail segment in India.

• GROWTH - The total food and grocery retail market has been growing at a CAGR of 14 percent and is estimated to grow at 17 per cent per annum by 2015.

• The food and grocery segment is the highest contributor to the retail sector (60%) with minimum penetration of organized Retailing.

• Hypermarkets and supermarkets are the best suited retail structure for this segment.

2

RETAIL MARKET IN INDIA

3

Till 1990• HAATS, MANDIS, BANIA SHOPS

THE EVOLUTION

1990’s• APNA BAZAAR, KENDRIYA BHANDAAR

2000-2011• SUBHIKSHA , MORE , SPENCER’S

4

CHANGES IN MODERN TIMES

NOT STACKED

200 Sq.Ft. LOCATION

ONLY DRY ITEMS

DAILY ITEMS ONLY

DIS.ON TOTAL COST

NO PARKING

NO LOYALTY PROGRAMS

NO USE OF TECHNOLOGY

WELL STACKED ITEMS

CLEAN ENVIROINMENT

FRESH STOCK

MORE VARIETY

LESS PRICE

PARKING FACILITY

LOYALTYPROGRAMS

BARCODE SYSTEM

TRANSFORMATION

5

CURRENT SCENARIOCUSTOMER PROFILE:

Husband & wife both working

Lives in metro city or tier 1

city

Owns a Car

High disposable

income

Likes Mall Culture

Brand Conscious

Age group 20-40

Reads newspaper & Uses internet

6

COMPETITOR ANALYSIS:

KIOSKS SABZI MANDI KIRANA SHOP STREET VENDORS

CURRENT SCENARIO

7

INDUSTRY GROWTH RATE: Food and grocery retail industry is expected to have a grow at a rate of 30 %

2011• US $ 70 billion

2025• US $ 150 billion

CURRENT SCENARIO

8

STRATEGIES EMPLOYED

STRATEGIES FOR PROMOTION: ADVERTISEMENTS

9

STRATEGIES EMPLOYED STRATEGIES FOR RETENTION: LOYALTY PROGRAMS

10

TECHNOLOGY USED

MODERN & NEW TECHONOLOGY: In the organized food & grocery retail COMPUTERIZED BILLING COUNTERS can be seen.

Moreover some of the big retail stores like big bazaar use modern technology AND techniques for managing their supply chain.

ENTERPRISE RESOURCE PLANNING(ERP)

VENDOR RELATIONSHIP MANAGEMENT(VRM)

11

ORGANIZED & UN-ORGANIZED RETAILING

The food and grocery segment is the highest contributor to the retail sector with maximum contribution coming from traditional

retailing.

12

Unorganized92%

Organized8%

Distribution

Food & Grocery

60%

Other40%

Market Segmentation

FY12 FY1602468

10

1.6

8.8

Expected Sales Growth (USD Bn) •Globally, e-grocery market is growing nearly 7 times faster than on-ground format

•India is the sixth largest grocery market in the world

•Indian e-grocery market growing at a rate of 19% YoY

•30-40% of the business will be in the online retail space in the next 5 years

Source: Technopak, Deloitte report, D’Essence analysis

E- GROCERY MARKET IN INDIA

E-COMMERCE

13

Indian Retail Market, $500

Bn

INTEGRATED SUPPLY CHAIN MODEL

Customer Order gets processed at WarehouseOnline Portal

Call CenterCustomer care

Online

Whole Seller Manufacturer

Procurement

Deliver it to Customer

Source: D’Essence analysis

14

MARKET OPPORTUNITIES IN FOOD AND GROCERY RETAIL

• Indian household spending on food is one of the highest in the world.

• Acceptance to modern retail this sector exhibit huge untapped potential.

• Which gives a wider scope for the upcoming Retailers to tap the untapped segment.

15

ETOP: Environmental Threat and Opportunity Profile

16

Environmental Sectors Nature of Impact

Impact of each sector

EconomicGrowing affluence among urban consumers, rising disposable incomes & living standards

MarketOrganized sector a virtual oligopoly, overall industry growth rate not encouraging,

International Global imports growing but India’s share shrinking

16

17

Environmental Sectors Nature of Impact

Impact of each sector

Political

Political Pressures, Local antisocial

RegulatoryGovernment assistance, such as government-backed loans and subsidies, imposing regulations that increase costs,

Social

Changes in social values and trends impact, socially responsible business practices,

ETOP: Environmental Threat and Opportunity Profile

17

18

Environmental Sectors Nature of Impact

Impact of each sector

Supplier

Collaboration Becomes Key To Success For Retailers And Suppliers.

Technological

The difference between the winners and losers in retail increasingly comes down to one factor: tech savvy.

ETOP: Environmental Threat and Opportunity Profile

18

SOME OF THE KEY PLAYERS

19

Right now there is no particular type of retailer that perfectly suits the market.- Toshifumi Suzuki

THANK YOU20