Description
Explaining about retail sector in india.
Retail Sector in india
BAckground
?
Traditionally retailing in India can be traced to ? The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers 1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.
? ?
?
?
?
?
?
For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. Post 1995 onwards saw an emergence of shopping centers, ? mainly in urban areas, with facilities like car parking ? targeted to provide a complete destination experience for all segments of society Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume
Retail sector today
?
?
? ?
?
?
?
Highly fragmented Sector Provides job to 50million individuals. Contributes 14% of GDP. Currently 12 million outlets are operating. Only 4% of 12 million outlets are larger than 500 sq ft. Average size of outlet 50 sq ft. Its growing at over 13% per annum
Retail Sector
?
Retail sector consist of : Organized Sector Unorganized sector
1. 2.
Unorganized sector
?
?
It refers to low cost retailing. Such as local kirana shops, Panwala?s, General stores, vendors e.t.c. Occupies 96% of the total retail market out of which 76% comes from rural India.
Organized sector
?
?
4% of Total Retail Sector Expected Annual growth 35%
Organized sector
Percentage
Book $ Music - 3% Clothing & Textiles - 39% Food & Grocery 11% Consumer Durables - 9% Footwear - 9%
Furniture & Furnishing - 8% Others - 21%
Factors Driving Organised Retail Industry in India
? Rising Disposable Income ? Growing Urbanization ? Rising Aspiration
? Changing Mind Set
? Shopping Experience
9
Formats: Definition
?
?
A retail format is the store package that the retailer wants to present to the customer. The store tells the customers about:
?
? ?
the products that will be available, the prices the customer can expect to pay and the range of additional services that the retailer may offer the customer
?
Two types of formats in retail sector Traditional Format(unorganised) Modern Format (organised)
1. 2.
Traditional Formats
? Counter ? Kiosks ? Street
Stores
Markets ? Street Vendors
Counter Stores
These stores are the normal Kirana stores, which are the general stores or grocers? stores. They are generally family run.
Kiosks
These are the pavement stalls selling limited variety of products - generally food and beverages. The paanvalas also fall under this category.
Street Markets
These refer to the Regular Markets that held at fixed centers. They offer a large variety of products and at a very low price. Village “haats” are examples for this.
Street Vendors
? Mobile
retailers ? Vegetables fruit vendors
Modern Retail Formats in India
? Malls
? Specialty
stores ? Discount Stores ? Department Stores ? Hyper-marts / Supermarkets ? Convenience Stores ? MBO?s
Malls
The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Piramyd, In Orbit, Atria etc.
Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.
Discount Stores:
As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods
Department Stores:
Large stores ranging from 2000050000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc. Eg. Pantaloons
Hyper-marts/Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.
Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.
MBO’s :
Multi Brand outlets, offer several brands across a single product category. These usually do well in busy market places and Metros.
Pantaloon Retail India Ltd
?
? ?
Pantaloon Retail India Ltd, is India?s leading retail company with presence across food, fashion, home solutions and consumer electronics, books and music, health, wellness and beauty, general merchandise, communication products, E-tailing and leisure and entertainment. Headquartered in Mumbai. has over 450 stores across 30 cities in India and employs over 18,000 people.
Pantaloon’s Retail Brands
26
Major Milestones 1987 Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser, India’s first formal trouser brand.
1991
1992 1994
Launch of BARE, the Indian jeans brand.
Initial public offer (IPO) was made in the month of May. The Pantaloon Shoppe – exclusive menswear store in franchisee format launched across the nation. The company starts the distribution of branded garments through multibrand retail outlets across the nation. John Miller – Formal shirt brand launched. Pantaloons – India’s family store launched in Kolkata.
1995 1997
2001
2002 2004
Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket chain launched.
Food Bazaar, the supermarket chain is launched. Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ India’s first seamless mall is launched in Bangalore.
2005
Fashion Station - the popular fashion chain is launched
aLL – ‘a little larger’ - exclusive stores for plus-size individuals is launched
2006
Future Capital Holdings, the company’s financial arm launches real estate funds Kshitij and Horizon and private equity fund Indivision. Plans forays into insurance and consumer credit.
Multiple retail formats including Collection i, Furniture Bazaar, Shoe Factory, EZone, Depot and futurebazaar.com are launched across the nation.
Group enters into joint venture agreements with ETAM Group and Generali
Business & Marketing Strategy of Pantaloon Retail
29
Strategy Snapshot
Point of sale: PRIL has locked in retail estate in major cities Sourcing: PRIL is rationalizing its vendor base to improve sourcing & category management. It is moving closer to source of supply by tying up with manufacturers directly thereby reducing dependency on intermediaries Selling: PRIL has built different formats to cater to different customers.
30
Land Procurement Strategy
? ?
?
Signed on 25 mn sq.ft of retail space to be operational by 2010 Locked in prime real estate locations at a low rate of Rs 45/sq ft on long term lease of 9-25 years. This gives it significant cost advantage when rental costs are rising. Long term strategy is to enter all major cities with a population of 0.5 mn and is targeting 80 cities from its current 32
Proposed Geographical expansion
31
Driving Margins thro Private Labels
?
?
PRIL has private labels across many categories and plans to expand private label initiatives going forward. It is putting various sales promotion initiatives to transform consumers from being brand loyal to store loyal Aims to generate 20% of revenues from private labels
Format
Pantaloons Big Bazaar Food Bazaar
Private Label Share
75% 20% 15%
32
Strategies
?
Expansion plan to increase the retail space under control
? ?
Total retail space at the end of 2006-07 was 3.25 mn sq ft. Plans to add 2.5 mn sq ft in 07-08 Early sign up of retail space at lower lease rental of Rs. 4550 per sq.ft
?
Plans of venturing into restaurant business either independently or though JV?s
? ?
Recently partnered with Starbucks to launch its coffee chains in India Has entered into an agreement with IOC which allows IOC to open petrol pumps at the malls set by PRIL
33
Supply Chain & IT Strategy
34
Sourcing, Manufacturing & Logistics
? ? ? ?
Moving towards better Vendor Realization & rationalization Move closer to the source of supply Tie up with manufacturers directly to minimize intermediation „Logistics? to take care of entire supply chain of PR(I)L
35
Technology driving the Supply Chain
?
?
Largest SAP implementation in the retail sector in Asia SAP implementation would provide complete end to end solution for all businesses of the group – a definite competitive advantage
36
Competitive Analysis
37
Major Players in Various Formats
38
Store Details – Pantaloon & Competitors
39
Competition Analysis
Company PRIL Shoppers Stop 19 dept stores , 33 crosswords & 10 hypercity malls Still has no presence across malls and supermkts/ convenience stores Trent Reliance 20 malls in A class cities expanding to 100 in a short span of time 204 stores in the next 3 yrs.
Expansion plans
17 new stores
Formats
All formats except convenience stores Present in some 30 cities, has targeted 80 tier II cities as well
Present only across dept stores and hypermarket ( star india bazaar) and speciality stores through landmark All possible formats
Cities
10 as of now, plans to reach 22 cities by 2008 Private labels account for 19% of sales about 200 + brands on display , exclusive contracts with some international brands , hypercity for value retailing coming up
Plans to add 17 new stores
National-wide chain of stores in 800 cities & towns
Private Labels
Private labels account for 75% in apparel
Private labels account for 80%- westside, & landmark .
NA
Variety and innovation
yes, large no of brands & continuously adding new ones
Several brands in the apparel section , mostly private
NA
40
Awards and recognition
?
? ?
?
The Reid & Taylor Awards For Retail Excellence 2008 Retail Leadership Award: Kishore Biyani Retail Best Employer of the Year: Future Group Retailer of The Year: Home Products and Office Improvements: HomeTown
Future is Bright But…
Potential Roadblocks: • Real Estate costs
• Distribution costs • Regulatory Aspects • Skilled retail personnel
Other factors to consider:
• Difficult to transplant a successful international format directly. Local conditions & insights have to shape the format choice. • Malls need to be differentiated and specialized • Need for robust & scalable supply chain to facilitate rapid growth
42
doc_790421995.pptx
Explaining about retail sector in india.
Retail Sector in india
BAckground
?
Traditionally retailing in India can be traced to ? The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers 1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.
? ?
?
?
?
?
?
For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. Post 1995 onwards saw an emergence of shopping centers, ? mainly in urban areas, with facilities like car parking ? targeted to provide a complete destination experience for all segments of society Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume
Retail sector today
?
?
? ?
?
?
?
Highly fragmented Sector Provides job to 50million individuals. Contributes 14% of GDP. Currently 12 million outlets are operating. Only 4% of 12 million outlets are larger than 500 sq ft. Average size of outlet 50 sq ft. Its growing at over 13% per annum
Retail Sector
?
Retail sector consist of : Organized Sector Unorganized sector
1. 2.
Unorganized sector
?
?
It refers to low cost retailing. Such as local kirana shops, Panwala?s, General stores, vendors e.t.c. Occupies 96% of the total retail market out of which 76% comes from rural India.
Organized sector
?
?
4% of Total Retail Sector Expected Annual growth 35%
Organized sector
Percentage
Book $ Music - 3% Clothing & Textiles - 39% Food & Grocery 11% Consumer Durables - 9% Footwear - 9%
Furniture & Furnishing - 8% Others - 21%
Factors Driving Organised Retail Industry in India
? Rising Disposable Income ? Growing Urbanization ? Rising Aspiration
? Changing Mind Set
? Shopping Experience
9
Formats: Definition
?
?
A retail format is the store package that the retailer wants to present to the customer. The store tells the customers about:
?
? ?
the products that will be available, the prices the customer can expect to pay and the range of additional services that the retailer may offer the customer
?
Two types of formats in retail sector Traditional Format(unorganised) Modern Format (organised)
1. 2.
Traditional Formats
? Counter ? Kiosks ? Street
Stores
Markets ? Street Vendors
Counter Stores
These stores are the normal Kirana stores, which are the general stores or grocers? stores. They are generally family run.
Kiosks
These are the pavement stalls selling limited variety of products - generally food and beverages. The paanvalas also fall under this category.
Street Markets
These refer to the Regular Markets that held at fixed centers. They offer a large variety of products and at a very low price. Village “haats” are examples for this.
Street Vendors
? Mobile
retailers ? Vegetables fruit vendors
Modern Retail Formats in India
? Malls
? Specialty
stores ? Discount Stores ? Department Stores ? Hyper-marts / Supermarkets ? Convenience Stores ? MBO?s
Malls
The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Piramyd, In Orbit, Atria etc.
Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.
Discount Stores:
As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods
Department Stores:
Large stores ranging from 2000050000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc. Eg. Pantaloons
Hyper-marts/Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.
Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.
MBO’s :
Multi Brand outlets, offer several brands across a single product category. These usually do well in busy market places and Metros.
Pantaloon Retail India Ltd
?
? ?
Pantaloon Retail India Ltd, is India?s leading retail company with presence across food, fashion, home solutions and consumer electronics, books and music, health, wellness and beauty, general merchandise, communication products, E-tailing and leisure and entertainment. Headquartered in Mumbai. has over 450 stores across 30 cities in India and employs over 18,000 people.
Pantaloon’s Retail Brands
26
Major Milestones 1987 Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser, India’s first formal trouser brand.
1991
1992 1994
Launch of BARE, the Indian jeans brand.
Initial public offer (IPO) was made in the month of May. The Pantaloon Shoppe – exclusive menswear store in franchisee format launched across the nation. The company starts the distribution of branded garments through multibrand retail outlets across the nation. John Miller – Formal shirt brand launched. Pantaloons – India’s family store launched in Kolkata.
1995 1997
2001
2002 2004
Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket chain launched.
Food Bazaar, the supermarket chain is launched. Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ India’s first seamless mall is launched in Bangalore.
2005
Fashion Station - the popular fashion chain is launched
aLL – ‘a little larger’ - exclusive stores for plus-size individuals is launched
2006
Future Capital Holdings, the company’s financial arm launches real estate funds Kshitij and Horizon and private equity fund Indivision. Plans forays into insurance and consumer credit.
Multiple retail formats including Collection i, Furniture Bazaar, Shoe Factory, EZone, Depot and futurebazaar.com are launched across the nation.
Group enters into joint venture agreements with ETAM Group and Generali
Business & Marketing Strategy of Pantaloon Retail
29
Strategy Snapshot
Point of sale: PRIL has locked in retail estate in major cities Sourcing: PRIL is rationalizing its vendor base to improve sourcing & category management. It is moving closer to source of supply by tying up with manufacturers directly thereby reducing dependency on intermediaries Selling: PRIL has built different formats to cater to different customers.
30
Land Procurement Strategy
? ?
?
Signed on 25 mn sq.ft of retail space to be operational by 2010 Locked in prime real estate locations at a low rate of Rs 45/sq ft on long term lease of 9-25 years. This gives it significant cost advantage when rental costs are rising. Long term strategy is to enter all major cities with a population of 0.5 mn and is targeting 80 cities from its current 32
Proposed Geographical expansion
31
Driving Margins thro Private Labels
?
?
PRIL has private labels across many categories and plans to expand private label initiatives going forward. It is putting various sales promotion initiatives to transform consumers from being brand loyal to store loyal Aims to generate 20% of revenues from private labels
Format
Pantaloons Big Bazaar Food Bazaar
Private Label Share
75% 20% 15%
32
Strategies
?
Expansion plan to increase the retail space under control
? ?
Total retail space at the end of 2006-07 was 3.25 mn sq ft. Plans to add 2.5 mn sq ft in 07-08 Early sign up of retail space at lower lease rental of Rs. 4550 per sq.ft
?
Plans of venturing into restaurant business either independently or though JV?s
? ?
Recently partnered with Starbucks to launch its coffee chains in India Has entered into an agreement with IOC which allows IOC to open petrol pumps at the malls set by PRIL
33
Supply Chain & IT Strategy
34
Sourcing, Manufacturing & Logistics
? ? ? ?
Moving towards better Vendor Realization & rationalization Move closer to the source of supply Tie up with manufacturers directly to minimize intermediation „Logistics? to take care of entire supply chain of PR(I)L
35
Technology driving the Supply Chain
?
?
Largest SAP implementation in the retail sector in Asia SAP implementation would provide complete end to end solution for all businesses of the group – a definite competitive advantage
36
Competitive Analysis
37
Major Players in Various Formats
38
Store Details – Pantaloon & Competitors
39
Competition Analysis
Company PRIL Shoppers Stop 19 dept stores , 33 crosswords & 10 hypercity malls Still has no presence across malls and supermkts/ convenience stores Trent Reliance 20 malls in A class cities expanding to 100 in a short span of time 204 stores in the next 3 yrs.
Expansion plans
17 new stores
Formats
All formats except convenience stores Present in some 30 cities, has targeted 80 tier II cities as well
Present only across dept stores and hypermarket ( star india bazaar) and speciality stores through landmark All possible formats
Cities
10 as of now, plans to reach 22 cities by 2008 Private labels account for 19% of sales about 200 + brands on display , exclusive contracts with some international brands , hypercity for value retailing coming up
Plans to add 17 new stores
National-wide chain of stores in 800 cities & towns
Private Labels
Private labels account for 75% in apparel
Private labels account for 80%- westside, & landmark .
NA
Variety and innovation
yes, large no of brands & continuously adding new ones
Several brands in the apparel section , mostly private
NA
40
Awards and recognition
?
? ?
?
The Reid & Taylor Awards For Retail Excellence 2008 Retail Leadership Award: Kishore Biyani Retail Best Employer of the Year: Future Group Retailer of The Year: Home Products and Office Improvements: HomeTown
Future is Bright But…
Potential Roadblocks: • Real Estate costs
• Distribution costs • Regulatory Aspects • Skilled retail personnel
Other factors to consider:
• Difficult to transplant a successful international format directly. Local conditions & insights have to shape the format choice. • Malls need to be differentiated and specialized • Need for robust & scalable supply chain to facilitate rapid growth
42
doc_790421995.pptx