Home ____ Home Home is where the ____ is _____ home

More than just a building Place where you feel safe A place that is yours Reflects your personality & binds a family together

Love, appreciation, happiness, hope, enthusiasm, vitality, confidence, trust, optimism = HOME

Home Retail An emerging category Bagful of emotions to manage

Content Organized Retail in India –Size and Potential –Evolution Home Furnishing retail –Current Status –Market Status –Growth Drivers Key competencies for driving growth

Organized Retail in India Evolution and Potential

Organized Retail in India Total retail size becomes $570+ bn in 5 years time Organized retail becomes $120+ bn from $35+ bn close to 40% CAGR Source:- India retail Market, Changing with changing times, Deloitte

Inflection point in Indian retail Evolution of Organized Retail: Leading the Growth… Unorganized Market Create Awareness Increase customer expectation Strengthen OfferingConsolidation Prior to 1980s 1980s 1990sPost and beyond US Market Very few national chains Local/un-organised players Active housing market New entrants New formatsIncrease in store sizeM&A Prior to till now Indian Market Very few national chains Local/un-organised players Steady increase in housing market Emergence of new players Higher consumer spend Increased customer sophistication Source:- India Retail, BCG study

Home Furnishings Market Overview and Structure

The Indian Home Furnishing Market 20010Market Size INR 12,000 CR 2012E Market Size INR 00 CR CAGR (08-12E) Home Furnishing: 21% Organized Retail: 95% Unorganized Retail: 8% Share of organized retail in India at only6% of total market Is a relatively new phenomenon in Home Furnishing Currently at a stage where apparel retail was around 10 years ago Highly evolving segment with apparel retailers and manufacturers entering the fray Continues to remain a commodity in the minds of the customer Organized Retail remains a fairly new phenomenon in home furnishing. Home furnishing, consisting of bed, bath, kitchen, dining and living accessories is expected to grow over the next few years. Urban Market Size and Growth Segmental Break –up of Home Furnishing Market Bed products remain the dominant category followed by bath – together they account for 66% of the entire market The growth is expected across all segments in the market Source:- Technopak Advisers

The Retail Market Structure The market is dominated by the unorganized sector. In the organized sector, the dominant players remain hyper markets and departmental stores. Home Furnishing Market Organized Sector (6%)Unorganized Sector (94%) Specialty Home retailers Big Box retailers Departmental Stores Large Format home Retailers Multi Brand Outlets (MBOs) Un-organized Players Small Niche Players Street Markets Welspun Retail Store Formats: Evolving in terms of size, display and sale, location Entry of manufacturers and apparel retailers into the business Specialty Home Homestop, Atmosphere, Welhome, Good Earth, BombayDyeing, Portico, Kurlon, Maspar, Carmichael house, Roseby etc Big-box (Soft + Hard Home): Home Stop, Home Centre, Home town Departmental Stores: Big Bazaar, Shoppers Large format home retailers MBOs:- Jagdish Store, Bharat Furnishing etc Market Structure

Growth drivers Demographics Product Perception Distribution Model Customer Purchasing Power Younger v/s Ageing Population Lower Income & Higher saving Levels V/s Higher Income & Higher Spending HouseholdsJoint Families V/s Nuclear Families Commodity V/s Fashion Style Statement and Brands Mom & Pop V/s LFS, EBOs V/s Big Box 85% Women V/s Increasing Male Buyers Buying DecisionWomen v/s Men V/s Kids Household SizeFamilies V/s Singles

Key competency areas for success in home retail Obsessive Customer focus Understand and Focus on target audience Tailored customer marketing Enhanced customer experience Catering to life cycle value

Key competency areas for success in home retail Brand F rom commodity to brands continuous innovation Brand Value proposition and articulation

Key competency areas for success in home retail Process Focus Front end and backend Capabilities to manage Farm to Consumer Efficiency Execution and excellence focus Retail is about detail People Attract Recruit Retain

Home furnishing retail in India is a large, high growth market Increasing number of high income households Disposable income increasing at 10-13% annually Increase in residential real estate Lac houses expected to be added annually Increasing competition, with number of retailers with different formats entering the fray Huge potential for growth owing to big unorganized market 1200 Cr of Market [ only 6% organized] CAGR of 20-30% Organized players are growing at a higher pace 5 Source:- India Retail, BCG study

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