22-08-2012, 05:09 PM
The Indian Retail Sector
Indian Retail Formats.ppt (Size: 1.92 MB / Downloads: 35)
Industry Evolution
Traditionally retailing in India can be traced to
The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers
Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission
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. Akbarallys, Apna Bazaar 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
At year end of 2010 the size of the Indian organized retail industry is estimated at Rs. 89,000 crore
Retailing formats in India
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 Lifestyle, Shoppers Stop, Piramyd, Pantaloon.
Major Retailers
India’s top retailers are largely lifestyle, clothing and apparel stores
This is followed by grocery stores – Reliance Fresh and More for Aditya Birla group
Following the past trends and business models in the west retail giants such as Lifestyle, Pantaloon, Shoppers’ Stop and Central are likely to target metros and small cities almost doubling their current number of stores
Future direction: Positives
Recent retail gurus have estimated India’s total retail market at US$ 502.6 billion which is expected to grow at a compounded 30 per cent over the next three years.
Over next two years India will see several Indian retail businesses attaining a critical mass as growth in the industry picks up momentum driven by two key factors:
Availability of quality real estate and mall management practices
Consumer preference for shopping in new environments
Future direction: Concerns
96 million square feet of mall space is expected to be available by end of 2012, which might lead to over-capacity of malls
Lack of differentiation among the malls that are coming up. One option may be to look at specialization.
Poor inventory turns and stock availability measures - retailers clearly need to augment their operations.
Operations of retailers and suppliers are not integrated. Efficient replenishment practices practiced in the Indian auto and auto-component industry can be leveraged to implement efficient supply chain management techniques.
Supplier maturity, in terms of adherence to delivery schedules and delivering the quantity ordered, is an issue
Sales tax laws - lead to retailers having state-level procurement and storage leads to Indian retailers having higher inventories. VAT has helped alleviate this a bit.
Increased adoption of IT and shrinkage management will be a critical area.
Supply chain and customer relations followed by merchandising, facilities management and vendor development are areas which have significant gaps and proactive training is a key imperative for overcoming these.