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Indian Retail Industry Presentation 060109

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Indian Retail Industry Presentation (January 6, 2009)
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  • 1. Biot e c h n o l o g y Biotechnology 2008 R e ta i l December 2008 www.ibef.org

2. MaRket oveRview www.ibef.org 3. M aRk e t ov e Rv i e wDecember 2008 indian retail on the fast-track the indian retail market is the fifth-largest retail destination globally. it is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Retail contributes to 10 per cent of indias gross Domestic Product and provides employment to 8 per cent of indias working population. higher disposable incomes, easy availability of credit and high exposure to media and brands has considerably increased the average propensity to consume over the years. www.ibef.org 4. M aRk e t ov e Rv i e wDecember 2008 indian retail on the fast-track GRDI india ranked first for the third consecutive year on the global Retail Development index 2007, conducted by at kearney across 30 emerging economies. india is ranked as the most preferred retail destination for international investors. GCCI india ranked first for the fifth time on the global consumer confidence index June 2007, conducted by the nielsen company. indians were judged as the worlds most optimistic consumers, with high financial confidence about their income for the next 12 months. www.ibef.org 5. M aRk e t ov e Rv i e wDecember 2008 indian retail revolution Modern retail would increase its share in the totaltotal Retail Sales retail market to 22 per cent by 2010.311.72005-06 261.82004-05 indian retail showed a growth rate of 49.73 per cent 2003-04 230.3with a turnover of US$ 25.44 billion in 2007-2008 as 2002-03205.4against US$ 16.99 billion in 2006-2007.186.32001-02 0 50100150 200 250300 350 organised retail segment is expected to grow fromUS$ billion five per cent to about 14 to 18 per cent by 2015.Source: Datamonitor www.ibef.org 6. M aRk e t ov e Rv i e wDecember 2008 indian retail revolution the market is witnessing a migration from traditionalProjected Retail growth retailing to modern/organised retailing formats, with an43.82010-11P460.6 explosive proliferation of malls and branded outlets. 16.52006-07P337.3 Modern retailing outlets in india are increasingly12.9 matching up to global standards and witnessing intense 2005-06E 311.7competition.050100 150 200 250 300 350 400 450 500n Total Retailn Organised RetailSource: Crisil ResearchExchange Rate: US$ 1 = INR 41 www.ibef.org 7. M aRk e t ov e Rv i e wDecember 2008 transition from traditional to modern retailing with a share of over 95 per cent of total retail revenues, traditional retailing continues to be the backbone of the indian retail industry. over 12 million small and medium retail outlets exist in india, the highest in any country. traditional retail formats are highly popular in small towns and cities with primary presence of neighbourhood kirana stores, push-cart vendors, melas and mandis. www.ibef.org 8. M aRk e t ov e Rv i e wDecember 2008 transition from traditional to modern retailing Modern/organised retailing is growing at an aggressive pace in urban india, fuelled by burgeoning economic activity. increasing number of domestic and international players are setting up base in the country and expanding their business to tap this growing market. www.ibef.org 9. M aRk e t ov e Rv i e wDecember 2008 growth across segments the food and beverages segment accounts for the Share of verticals largest share over 74 per cent of the total retail pie.0.84% 1,.05%3.043.0 4% traditional retail dominates food, grocery and allied %4.30% products sector, with grocery and staples largely 4.87 %sourced from the kiranas and push-cart vendors.9.31% apparel and consumer durables verticals are the74.41%fastest growing verticals.n n Food and BeveragesClothing and Textil n n Consumer Durables Jewellery and Watches n n Home DecorBeauty Care n n FootwearBooks, Music and GiftsRevenue of Verticals Food and BeveragesUS$ 231,951 million clothing and textileUS$ 29,024 million consumer Durables US$ 15,171 million Jewellery and watches US$ 19,390 million home DecorUS$ 9,463 million Beauty care US$ 6,854 million FootwearUS$ 3,268 million Books, Music and giftsUS$ 2,610 millionSource: Crisil Researchwww.ibef.org 10. M aRk e t ov e Rv i e wDecember 2008 growth across segments with high telecom penetration in towns and villages and five million new users having added every month, the mobile phone category is one of the highest growth product categories. with the reducing average age of indians buying homes, the home dcor sector is growing rapidly coming down. Beauty care, home dcor, books, music and gifts segments are gaining traction predominantly in the urban areas and emerging cities.10 www.ibef.org 11. M aRk e t ov e Rv i e wDecember 2008 increasing penetration of organised retail organised retail in india is largely restricted to Size of indian retail market across segments, 2007 the urban and semi-urban regions, with consumer Segment Total retailOrganised exposure to modern retailing formats like malls retailFood and grocery 6,422 50 and stand-alone stores, etc., for specific producttextile and apparel 980 185 categories.Jewellery and watches 55430 Penetration of organised retail is projected toconsumer durables 41543 increase to 9.52 per cent in 2009-2010, with revenuesPharma36410home solutions35132 from organised retail touching US$ 43,829 million inBooks, music and gifts11515 2009-2010.others 1,159111 clothing and textiles/apparel segment dominates theTotal 10,0 organised retail sector with revenues worth US$ 4.76 billion, contributing to over 36 per cent of the organised retail pie. 11www.ibef.org 12. M aRk e t ov e Rv i e wDecember 2008 increasing penetration of organised retail apparel is one of the fastest growing verticals, with comparative penetration of organised retail higher number of domestic and foreign brands, andUS 85%15%increasing consumer willingness to pay for quality.Taiwan81% 19% Footwear has the highest organised retail penetration,Malaysia 55% 45%primarily due to players like Bata india Pvt. ltd. andThailand40%60% liberty, with wide distribution network and customerIndonesia30%70% confidence. China 20% 80% India 3% 97%020 40 60 80100n Organised Retail n Traditional Retail Source: Ernst & Young research1www.ibef.org 13. M aRk e t ov e Rv i e wDecember 2008 Future outlook Retail sector revenues pegged at US$ 460.6 billionChanging Paradigm: The Confidence of Modern and Traditional Retailby 2010-11M&a, consolidation,technology high investments,adoption, organised retail projected to grow to US$ 43.8 billionconfluence ofleveragingRange, indian RetailtraditionalPortfolio, Modern retail is expected to adapt and imbibe from FormatsFormatfor Modernoptions, Growth the traditional formatsRetailBeginning ofthe Rural- ace l Spentry, growth,Urban Retail Unorganised formats converging from organised ai Ret a expansion, Merge apit c Per formats, in the form of mushrooming village mallstop line Focus for organised Retail1st Phase2nd Phase 3rd Phase4th Phase2000 2005 200820111www.ibef.org 14. Re ta i lDecember 2008 Future outlook large indian retail players have already begun Segmental size of indian retail market formulating strategies for the rural retail space Food andGroceryTextile and the food and beverages (F&B) sector is expected toappareltouch US$ 116 billion mark by the end of 2008-2009.Jewellery andWatches ConsumerdurablesPharmaHomeSolutionsBooks, Music and gifts Others 0 50 100 150 200US$ billionn Retail size 1www.ibef.org 15. aDvantage inDia www.ibef.org 1 16. aDva n tag e i n Di aDecember 2008 advantage india Fastest Growing Economy gross Domestic Product 2006-07 gDP growth rate of 9.4 per cent posted in 2006-07 2005-06 is highest ever in last 18 years. with the first quarter2004-05growth rate for 2007-08 estimated at 9.3 per cent, the2003-04economy is well poised to continue its growth story.2002-030 200 400600 800 1000 the fast pace of gDP growth is the driving indianUS$ billionconsumerism; indian consumers today are moreSource: Reserve Bank of Indiaconfident and willing to splurge growth Rate (per cent) 2006-072005-062004-052003-042002-0302 46 8 10 US$ billion Source: Reserve Bank of India1 www.ibef.org 17. aDva n tag e i n Di aDecember 2008 advantage india Young India growing young Population two-thirds of indias population is under 35 years age2020Eand more than 60 per cent of the population will be in the working age group (15-60) till year 2050. 2015E the median age of 23, opposed to the world median 2010E age of 33, sets the emerging young india apart india is home to about 20 per cent of the global2005 population under 25. 2000 0 100 200 300 400 500 600 700 800 900 1000US$ million n Under 15n 15-64n Over 65 Source: India Census1www.ibef.org 18. aDva n tag e i n Di aDecember 2008 advantage india Potential Untapped MarketShare of organised and traditional Retail India 3 97 organised retail penetration is on the rise and offers 20 80 China an attractive proposition for entry of new players asIndonesia3070well as scope for expansion for existing playersThailand 40 60 Malaysia5545 Diverse needs of the indian consumer offers aTalwan8119 spectrum of opportunities, spanning from rural US 8515retailing to luxury retailing0 204060 80 100n Organised retailn Traditional retail india is home to the largest base of consumers, and a* 2004-05 figures.Source: Ernst & Young Retail Report steadily rising rich and super rich population impressive retail space availability and growing trend of consumerism in the emerging cities and small towns add to the market attractiveness indian Retailing gaint, Pantaloon Retail india limited, captures a mere 0.3 per cent of total market in india, compared to tesco Plc, englands 14.3 per cent and walmart USas 20 per cent, signaling out the large untapped potential1 www.ibef.org 19. aDva n tag e i n Di aDecember 2008 advantage i

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