03-09-2012, 04:33 PM
SUCCESS OF PANTALOONS RETAIL INDIA LIMITED – INDIAN WAL-MART
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ABSTRACT
The thesis is focused on finding out the concept of value retailing followed by the Pantaloons Retail India Limited in India and to do an empirical study and analysis on one of its business lines “The Food Bazaar”. The aim was also to find out that how the concept of private labeling has proved to be beneficial for the growth of the organization. The research was conducted to find out the ways and methods that the company has been following in the business of organized retailing including the hypermarket concept. The research was conducted in NCR region (Noida & Gurgaon) with the sample size of around 300 customers and primary information was collected from them in the form of questionnaire. Also the financial statements of past four years were analyzed to find out the financial performance of the company. After doing the brief analysis about each of the verticals of the Pantaloons Retail India Limited, an in-depth research was conducted on its food bazaar business line in order to find out that from where the modern consumer prefers to shop from and what ratio of his income is he willing to spend on various food items. The objective was to figure out that what are the various parameters that a shopper takes into account before he buys a particular item and how comfortable is he when he is buying from malls rather than the from the local kirana shops. The study was also done on consumer’s perception on the concept of “brand + bargain” and the analysis about the same has been mentioned at the end.
Indian Retail Industry: Strategies, Trends and Opportunities 2007
Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. But because of the heavy initial investments required, break even is difficult to achieve and many of these players have not tasted success so far. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations.
Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail sector in India.
Company Background – Pantaloon Retail India
Founded in 1987, by Mr. Kishore Biyani, Pantaloon Retail in India’s leading Retail Company. It is the flagship company of the future group. Starting its 1st outlet in 1997, Pantaloons in Kolkata, it currently has over 4 mm sq. ft. of area under business. The company operates under multiple formats – hypermarket, apparel stores, specialty stores under various brands including Big Bazaar, Pantaloon, Food Bazaar, Collection, E Zone, etc. The company also operates an online portal, futurebazaar.com.
Pantaloon Retail (India) Limited is today recognized as one of the pioneers in the business of organized retailing in the country with a turnover of over Rs.2,884.43 millions for fiscal 2006, as opposed to a turnover of Rs.1,463.12 million for fiscal 2005 and Rs.881.04 million for fiscal 2004. During the same period Pantaloon profit after tax was Rs.124.75 million, Rs.30.20 million and Rs.3.82 million, respectively. As a result, Pantaloon sales increased between fiscal 2004 and fiscal 2006 at a CAGR of 80.94% and Pantaloon profit after tax increased between fiscal 2004 and fiscal 2006 at a CAGR of 471.44%.
Management of the Company
Pantaloon Retail over a period of time has built a strong management team to drive the company for its high growth phase. Though, Mr. Kishore Biyani is the face of Pantaloon, the company is not a one man show and has built a strong second and third line of management, to fulfill its massive expansion and growth plans. Though there have been concerns regarding lack of talent in the growing retail sector, the company has the best talent in place to drive each business category.
Expansion Plans
The concept of discount store resembles the Wal-Mart strategy. In India and especially in metro cities like Mumbai, Bangalore, Calcutta and Hyderabad, where the population is dense and consists of a high middle-class population, the concept of discount stores is graining a lot of acceptance. The company plans to expand rapidly. The next year it plans to open more stores in Mumbai and Delhi at critical locations.
It has planned to open three Big Bazaars (discount stores) in ‘A-class cities’ like Bangalore. Pantaloon has already bagged substantial retail space in Hyderabad (60,000 sq. ft.), Kolkata (35,000 sq. ft.) and Bangalore (40,000 sq. ft.). In Mumbai it acquired 50,000 sq. ft. area at each of its locations at Lower Parel, Mulund and the western suburbs.