SECTORAL ANALYSIS

RETAIL
MARKET OVERVIEW
INDIAN RETAIL ON THE MOVE

• Retail is one of the fastest growing sectors in India

• It is estimated to grow from US$ 405 billion to US$ 573 billion

by 2012–13.

• Retail contributes to 14% of the GDP and employs 9-10% of

the population in India.

• Higher disposable incomes, easy availability of credit and

high exposure to media and brands has increased average
propensity to consume considerably over the years.

• India ranked first for the third consecutive year, on the Global
Retail Development Index – 2007, conducted by AT Kearney
across 30 emerging economies
INDIAN RETAIL REVOLUTION

• Indian retail market more than doubled in size to USD 311.7

billion in 2005-2006 and BMI reports indicate that retail
sales will grow from USD 353.6 billion in 2010 to USD 514.7
billion in 2014.

• Market witnessing a migration from traditional retailing to

modern/organized retailing formats, with an explosive
proliferation of malls and branded outlets.

• Organized retail segment contributes to over USD 12.9

billion of retail revenues, with penetration growing from
3% in 2004-05 to 4.15% in 2005-06 and to 7.5% in 2010.

Source: IBEF & DataMonitor

UNORGANIZED v/s ORGANIZED RETAIL
• With the Unorganized retail sector
contributing to over 95% of the total
retail revenue, it still forms the
backbone of the retailing in India

• Unorganized retail is highly

pronounced in small towns and cities
characterized by the presence of
“mandis” and “kirana stores”.
• Modern/Organized retailing is growing
at an aggressive pace in urban India,
fuelled by bourgeoning economic activity.

• New formats such as departmental

stores, hypermarkets, supermarkets,
specialty and convenience stores, and
malls, multiplexes and discount stores are
on rise.
RETAIL : SEGMENTS

Retail Segments Share (%) of

total retail Market Share of Segments
market Food & Beverages
Food& Grocery 74.41
Clothing
Consumer Durables
Clothing and Textiles 9.31 Jewellery &
Consumer Durables 4.87 Watches
Jewelery and Watches 4.3 Home Décor
Home Décor Cosmetics
3.04
Footwear
Beauty Care 2.2
Foot Wear 1.05
Books, Music and Gifts 0.84

Source: Retail: industry profile, March

2009, CRIS INFACRetail
POLICIES
POLICY & REGULATORY FRAMEWORK
Policy Framework

FDI up to 100% allowed under the automatic route for cash and carry wholesale
trading and export trading and FDI up to 51% is allowed, with prior Government
approval for retail trade in ‘Single Brand’ products. However, FDI in retailing of
goods under multiple brands, even if the goods are produced by the same
manufacturer, is not allowed under the current guidelines.
POLICY & REGULATORY FRAMEWORK
Available Routes for Foreign Players to Enter the Retail Sector

Strategic License
Agreement

Distribution

Joint Venture

Franchisee Route

Manufacturing

Cash and Carry

Wholesale
Source: Ministry of Commerce, Foreign investment Promotion Board & IBEF
POLICY & REGULATORY FRAMEWORK
Government liberalizations and opportunities for Retail growth

• Government has established VAT (value added tax) in most states to resolve multi
taxation issues. Octroi has been abolished in most states to further retail.

• Government is releasing large tracts of undeveloped land for retail development in

the Mumbai and NCR regions.

• The labor laws of the land are under review for more efficient functioning of the
retail industry.

• Solutions to problems related to lease rentals and pro-tenancy laws, which

significantly deter international investors, are being pursued by the Government,
with initiatives such as Special Economic Zones (SEZs), allotment of Government
controlled land etc.
KEY TRENDS & DRIVERS
RETAIL HUBS on the UPRISE : TIER I

METROS leading the WAY

• Organized retail penetration to touch

almost 40% in Delhi and 35% in Mumbai.

• Delhi, Bangalore, Hyderabad, Chennai and

Kolkata are growing at an exceptional rate,
with the retail buzz in these cities becoming
more pronounced by the day.

• These cities have considerable latent

demand of branded products.

• The presence of IT/IT es has increased the

demand of products.

Source: Datamonitor
RETAIL HUBS on the UPRISE : TIER II & III

• Ahmedabad, Pune, Kanpur, Nagpur, Surat, Ludhiana, Coimbatore, Chandigarh,

Lucknow, Kochi, Jaipur, Vadodara, Vizag, Indore, Vijayawada, Trivandrum, Bhopal,
Nashik and Madurai contribute to US$ 15,619 million worth total retail activity.

• Pune is the fastest emerging destination for the services sector, closely followed by
Ahmedabad. These cities are now among the chosen business destinations by
corporate houses.

• Consuming class accounts for over 60% of the total households, offering potential in
the food and grocery, consumer goods and apparel verticals.

• These cities currently are exposed primarily to the “Value” retail formats.

• Total mall space availability in the metros and other cities are on the rise
GROWING URBANISATION

Higher Disposable Growing

Income Urbanization
• Disposable incomes are on the rise with • The urban population is projected to
the average currently being $800 per increase to 468 million, constituting
annum. 33.4% of the total projected population of
1,200 million by 2010-11
• Employers are offering attractive
compensation packages. • Change in the thinking pattern of young
executives is also boosting retail.

Source: Reserve Bank of India

KEY PLAYERS
KEY PLAYERS
Pantaloons Retail India Limited

• Pantaloon retail, a Future group venture, started in VERTICALS

1993 and has emerged as the retail giant with over
5 million square feet of retail space.

• PRIL (Pantaloon Retail India Ltd.) has many brands

like Brand Factory, Sports Bar and HomeTown, Food
Bazaar etc.

• The USP of PRIL is that it caters to both the “value”

segment as well as the “luxury” segment.

• Into a Joint Venture with many foreign companies

like Staples inc.
KEY PLAYERS
Shoppers Stop Limited

• Shoppers Stop, established in 1991 with its flagship VERTICALS

store- Shoppers Stop, has now expanded to over
100 retail outlets spread across 1.1 million square
feet of built-up area.

• Private labels account for more than 21% of their

total revenue.

• Strategic agreements with multinational brands

like MotherCare is adding to their niche market
segments.

• Aggressive expansion plans are in the pipeline for

their brands.
KEY PLAYERS
TATA Trent Limited

• Established in 1998 with net revenues now crossing US$53 VERTICALS

million in 2006.

• Includes brands like Landmark, WestSide, and Star India

Bazaar.

• Its retail sector activites include apparels, books and

general merchandise.

• Planned a new venture named Infiniti Retail Pvt. Ltd which

includes the brand Croma.
KEY PLAYERS
RPG Enterprises Limited

• Established retail section in 1996 with revenues VERTICALS

crossing $182 million in 2006.

• Includes brands like Spencer’s, Music World, Food

World and RPG Cellucom.

• Current store formats are based on hypermarkets,

stores and supermarkets.

• It had 279 outlets across the country by 2006 and

Music world had 350 affiliates nationwide.
SOME OTHER KEY PLAYERS
PLAYERS ACROSS VERTICALS
Food and Grocery Clothing and Textiles

Jewelry and Watches Footwear

Source: Industry Sources & IBEF

PLAYERS ACROSS VERTICALS
Home Décor and Furnishings Electronics

Beauty Care Books and Music

Source: Industry Sources & IBEF

KEY OPPORTUNITIES
RETAILING OPPORTUNITIES

Growing Economy

Growing Young Population

Untapped Organized market

Untapped rural market

Online Retailing

Emergence of India as Retail Hub

Low Cost of Operations

OTHER RETAILING OPPORTUNITIES

Transit Retailing( Railways Stations, Metros & Airports)

Tourism Retailing ( Dilli Haat etc )

Leisure & Entertaiment Retailing ( Cinema Halls )

Luxury & Premium Retailing ( Premium Brands )

Rural Retailing ( Choupal Sagar by ITC )

THANK YOU