1. Overview of Retail in India
KRITHIKA G.K
Asst. Professor
FMS

2. Evolution of Retail in India
Barter System
Unique needs, due to size & complexity
Special feature - Haats, Melas & Mandis

3. Haats Periodic markets (fixed times & locations)
Public gathering of buyers & sellers
Avg.sale per day: Rs.2.25 lakhs
300+ sale outlets per haat
4500+ visitors per haat
Rs.900 avg. sale per outlet
Approx villages
Source: BW Marketing Whitebook, pp )

4. Melas Fairs (commodity / religious) 25000 annual melas across India
Avg. outlets – 800
Avg sale per mela – Rs 143 lakh
Source: BW Marketing Whitebook, pp )

5. Mandis Markets set up by State Govt.
Direct sale of agricultural produce from farmers
Avg. 600 mandis
Population catered to 1.36 lakhs
Source: BW Marketing Whitebook, pp )

6. India’s Largest Retail Chains
PDS
(Rationing System – British – WW )II
463,000
Post Offices
160,000
KVIC (1957)
7,000
CSD Stores
(Canteen Stored Dept.)
3400
Source: Business World, Marketing Whitebook, 2005, pp.238)

7. Exclusive Retail Stores Hyper Markets Internal Retail
Emerging Formats
Exclusive Retail Stores
Hyper Markets
Internal Retail
Malls/Speciality malls
Multiplexes
Rural Oriented Formats
Fast Food Outlets
Service Galleries
Etc.
Established Formats
Kirana Shops
Convenience /
Departmental Stores
Company / Multi-brand
Showrooms
PDS/Fair Price Shops
Co-operative Stores
Pan/Beedi Shops
Traditional Formats
Itinerant Salesman
Haats
Melas
Mandis, etc.
Source: Retailing Management, Swapna Pradhan, Retail in India. Pp.23

8. Indian Retail Industry Overview….

9. Changing customer profile Changing Income Profiles
Diminishing difference b/w Urban & Rural
Change in Consumption Patterns
Average consumer today is richer, younger and more aspirational in his / her needs
Explosion of organized retail formats
Investment in retail more than 12 times that was invested during the last one decade.
(Source: KPMG India analysis &

10. Retailing in India is was estimated to be a US$ 200 billion industry, of which organized retailing made up 3 percent or US$ 6.4 billion.
By 2010, organized retail is projected to reach US$ 231 billion.

11. Retail landscape in India
Indian retail market is US$ billion (Rs 1330,000 crore)
Growing at 10.8 % p.a.
Expected to grow to US$ 590 billion in 13%p.a. (Source: – 13/07/09)
Organised retail – 5.9% (US$19.6 billion) - expected to touch US$ 57.5 billion in 2010 i.e 13% of the total retail market.
Source: Images F&R Research Estimates; Images Retail; May 2008

12. Investment Climate Economic Growth of 9% p.a
Can exceed China by 2015; Britan by 2022; Japan’s by 2032
Can become third largest economy after US & China
Second largest economy after China by 2050
Source: Images F&R Research Estimates; Images Retail; May 2008

13. Contd…… FDI inflow in 2007 – US$ 19.16 billion
72% increase from US$ billion in 2006
US$ 5 billion into retailing Industry (infrastructure, systems & shop-fit)
Largest English speaking population than whole of Europe
Source: Images F&R Research Estimates; Images Retail; May 2008

14. Cont’d… 300 million odd – middle class
According to estimates 70 million Indians earn a salary of over USD 19,500 p.a.
Middle class predicted to rise to 140 million by 2011
Expected consumers to swell to 600 million
Will establish India as one of the largest consumer markets of the world.
Source: Images F&R Research Estimates; Images Retail; May 2008

15. During the current financial crisis….
Dip in growth rate of GDP from an avg. of over 9% in the last three fiscal yrs. To 6.7%
Sharp rise in wholesale price index to nearly 13% in Aug 2008 & sharp fall to close at)0% in March 2008
Gross capital flows peaked at 9% in before the global financial crisis
Source: Images Retail; May 2009

16. India’s Retail Trade Not To Be Opened Any Further: Govt. (http://www

17. The Retail Revolution
15 million retailers & a rapidly evolving retail market
280 hypermarkets, 3200 supermarkets, 400 departmental stores and 1200 mega speciality stores & exclusive brand outlets across various retail categories by 2011
200 million sq ft. of gross leasable quality retail space (GLA) in Malls by 2011
Source: Images F&R Research Estimates; Images Retail; May 2008

18. …..
Most of retail growth may come from more than 1000 tier II towns of India.
Striking features of Indian Retail:
At Subhiksha, 40 per cent of revenues and space come from cities that are not state capitals.
At Vishal Megamart, 80 per cent of revenues come from tier II and III cities
Around per cent of visitors end up buying from retail outlets in smaller places, whereas, in large cities, it is around per cent
Retail Operations in smaller cities result in extra 3 – 4 percent margin
(Source: Nitin Srivastava)

19. Rural Retailing
Corporate retailers (ITC, Godrej, Reliance, AV Birla, Pepsico) – Farm Linkages
Loan wavier from Indian govt. of Rs.60,000 to farmers to lighten their debt.
Consumer spending – urban : rural = 9 :11 i.e Rural India accounts for 55% of pvt. Retail consumption.
Half of growing retail market in Rural India
Source: Images F&R Research Estimates; Images Retail; May 2008

20. Growing at 10% of India’s GDP
New Assocham study “The Rise of Rural India” – rural retail mkt. = 40% of total size of retail market in India
Growing at 10% of India’s GDP
Currently 10,000 of the 6 lakh+ villages have access to organised retail
Source: Images Retail; May 2009

21. Rural Marketing
According to National Council of Applied Economic Research (NCAER) Reports –
There are 720 million consumers in 627,000 villages.
17% of these villages account for 50% of rural population & 60% of rural wealth!
Leading to ‘bottom of the pyramid’ marketing
Egs. DCM Hariyali Kisaan Bazaar, ITC Chaupal Sagar, Godrej Aadhar, Tata Kisan Sansar, Reliance Fresh, Naya Yug Bazar etc.
Source: Images F&R Research Estimates; Images Retail; May 2008

22. Indian Retail Market Size

23. Overall Retail Market
Overall Retail market size – US$ 332.8b (Rs.1330,000cr)
Food & Grocery – 59.5% (Rs.792,000cr)
Clothing & Accessories – 9.9% (Rs. 131,300cr)
Catering Services – 5.4% (Rs. 71,300cr)
Jewelry (Rs. 69,400cr)
Consumer Durables – (Rs.57,500cr)
Health & Pharma – (Rs 48,800cr)
Entertainment – (Rs. 45,600)
Furniture, furnishings & kitchenware – (Rs.45,500cr)
Mobiles & Accessories - (Rs.27,200cr)
Leisure Retail - (Rs.16,400cr)
Footwear - (Rs.16,000cr)
Health & Beauty Care Services - (Rs.4,600cr)
Watches & Eyewear - (Rs.4,400cr)
Source: Images F&R Research Estimates; Images Retail; May 2008

24. Overall Retail Market
Fastest Retail Growth (2007) over the previous year in the following categories …
Mobile & Accessories – 25.6%
Out-of-home Food (Catering Services) – 25.1%
Books, Music & Gifts – 23.3%
Source: Images F&R Research Estimates; Images Retail; May 2008

25. Organized Retail Segment
Organized Retail Size – US$ 19.6b (Rs. 78,300cr)
Clothing & Fashion Accessories – 38.1% (Rs.29,800)
Food & Grocery – 11.5% (Rs.9,000cr)
Footwear – 9.9% (Rs. 7,750cr)
Consumer Durables – 9.1% (Rs. 7,100cr)
Out-of-Home Food (Catering Services )
Services & Furniture
Furnishings & Kitchenware …
Source: Images F&R Research Estimates; Images Retail; May 2008

26. Organized Retail Segment
Fastest Growth in 2007 over previous yr. recorded in…
Tiny Health & Beauty Care Services – 65% (Rs. 660cr)
Entertainment – 53.8%
Mobile & Accessories – 55.2%
Food & Grocery – 55.2%
Source: Images F&R Research Estimates; Images Retail; May 2008

27. Other Emerging Sectors……
Jewelry Retail (Branded)
Footwear Retail
Time Wear
Eye Wear
Fuel / Petrol Retail

28. Comparative Growth in Both Categories
Overall Retail Market
Organized Retail Segment
2006
26.1%
41.7%
2007
25%
37%
Source: Images F&R Research Estimates; Images Retail; May 2008

29. “ India is an important growth market with tremendous long-term potential for our company……”
Richard H. Lenny
President & CEO
The Hershey Company