Evolution of Retail
Barter System was known as the first form of retail.
As time passed currency was exchanged with goods and services.
Hawkers carried out the first Retailing in Push Carts
Followed by Kirana Stores …….. Mom and Popup Stores
Finally Manufacturing era necessitated the small stores and
It was a seller market still than this point of time with the limited
no of brands available
Barter chain Single brand franchise chain Standalone large
Chain of large stores And Finally Malls
EVOLUTION OF RETAIL
• Economist says that Boom Has Started of
Retail due to more spending Capacity of
• Emerging of retail started in brief in patterns
like changing face of the Indian retail sector
• Provide customers with 3 V‟s i.e. Value, Variety
What is Retail?
“A retail is one who stocks the producers goods and is involved in
the act of it to the individual consumer, at the Margin of Profit “.
As such retailing is the last link that connects the individual
consumer with the manufacturing and distribution chain.
Selling Directly to consumer selling in smaller units / quantities
Very high numbers near to neighborhood
Reorganized by the service levels
Retail Sector today is worth of 394 Billion Us $
2005 -06 :-PictureGDP -$700 bn :-
PFC -$220 bn (30%) Investment -$480 bn (70%)
2012 -13 :- PictureGDP -$1200 bn :-
PFC -$600 bn (50%) Investment -$600 bn (50%)
29 states,12 different languages, 72 festivals
Internet era, not industrial
Young country -60% below 30 years of age
Within the city, not suburbanIndian Retail-Ground
Consumption = Development
avenues for BUSINESS
CONSUMERS to opportunities for
want to spend their our PARTNERS &
Different products involved in Retailing
Books & Magazines
Fashion & Clothing
Optical Consumer Electronics
Sport & Leisure
Footwear & Leather
Toys & Games
Jewellery & Watches
Types of Retail Sectors
Convenient / Departmental stores
Factory outlets and discounts Market
Company and Franchises showroom
Disadvantages Of Retail Industry in
Margins are low
High property cost
Expertise in logistics
Couple of firms in retail sector have turn over more
than Rs 100 cr
Factors that attracted major industry
players to enter the retail sector
Phenomenal success of certain players in retail
Eg: Shopper‟s Stop
Hype created by management consultants and
Phenomenal growth of service sector and down
turn in manufacturing sector
A good way to leverage existing property
Eg: Primals started developing Crossroads after
closing of Roche factory they have acquired on
prime property in Mumbai
Success of organized retail sector in developed
Changes in Consumer behavior and increase in their
Ever green demand for basic things like food
Negative working capital ; Companies buy on
credit and sell for cash
Largest and fastest growing sector in India.
Modern retailing forms one point stop for all shopping.
Consumer gets a large product variety of brands to choose
from one roof.
First it was a sellers market and now its changing to buyers
By 2010 Indian retail sector would be generating 10 million
Retail Sector in India
Some of the Key Players in
Analysis of Growth by ASSOCHAM
Organized retail growing at estimated 25%
It is expected that retail in India could be worth US$ 175-200 billion by
2008-09 Total retails contribution to GDP is between 8% which would
further jump up to nearly 12% in next few years. By 2010, retails
contribution to national GDP in totality is likely to be 22%.
2008 – Retail Growth rate – 25-28%, Unorganized and organized
retail size – 300 billion US$
Opening 10 to 15 outlets by 2015, it plans to employ about 5,000
people selling groceries, consumer goods, fruits and vegetables. India's
retail industry is worth $300bn (£148bn)
Eg: Bharti has invested 60 Billion with the largest retail Walmart (last year)
GROWTH OF INDIAN RETAIL SECTOR
Retail Sector contribution to GDP sector is 8%-10%.
Elasticity of Demand for Luxury and
0 0.5 1 1.5 2 2.5 3 3.5
The retail industry in India is growing at a significant pace. However, there are
several problems faced by the industry. The major challenges for the organized
Taxation laws that favor small retailers.
Multi-point octroi collection.
According to analysts, for this industry to thrive, Indian retailers need to
emulate worldwide retail practices such as accuracy in financial reporting,
increased levels of corporate governance and greater accountability
Foreign Equity does not go beyond 51 percent.
Additions to the product categories to be sold under „single brand‟ require
fresh govt. approval.
International Retail: At a Glance
3% 2% 9%
USA EU Japan China
India Russia Others
Share of Organized Retail
USA = US$ 2,350 Bn UK = US$ 406 Bn China = US$ 313 Bn
Highly evolved US market has WalMart taking only 8% market share
UK market has Tesco with only 13.4% market share
China market still does not have a clear leader
Increasing demand driven by the country’s young working
Increase in per capita income which in turn increases the
Create win-win situation for all links in value chain (
suppliers, producers, retailers and customers).
Improvement in the standard of living.
Technology intensive industry
Lack of expertise in Supply Chain Management
Stringent Labor Laws
Lack of specialized professionals in Industry
Lack of industry status.
Government Restrictions on FDI
Non-Availability of Government Land.
Change in consumer behavior pattern and increase in
It is estimated that 15 million people would be
engaged in Retail and Retail support activities by
Indian rural markets offer a sea of an opportunity for
the retail sector.
Upcoming international Players
Healthy prospect for the fashion industry.
Indian taxation system favors small retail business.
Competition from unorganized Sector to the organized Sector.
Middle class Psychology.
Increasing Real Estate prices
Factors which the new entrant into
retail sector failed to verify
For FMCG giants the proposition of their sales
through organized retail remains small
Failed to learn from the failures in organized
retailing like TVS group‟s Stop & Shop.
Growth rate of small retailers.
Trading Inefficiencies which forces the manufactures
to increase the price
Small retailers can compensate this by personalized
services like credit and free home delivery.
Unsupportive nature of few manufactures like not
printing the bar codes, despite this being so
important for retail logistics.
International retailers in India:
International company gives name and
technology to local partner. Gets royalty in
How they are return
present In case master franchise is appointed for
region or country, he has right to appoint
Nike, Pizza Hut, Tommy Hilfiger, Marks
and Spencer, Mango
Company sets up Indian arm for production
Bata India. It also has right to retail in
International retailers in India:
International company sets up local
Supply products to Indian retailers to sell
How they are
Also set up franchised outlets for brand
Swarovski, Hugo Boss
Cash and Carry operations
100% FDI permitted
Metro Cash n Carry
Develop the market
Greater level of exports due to increased
Benefits of sourcing by major players
Sourcing by Wal-Mart from China improved
multifold after FDI permitted in China
Similar increase in sourcing observed for
Metro in India
Provides access to global markets for
Investment in technology
Cold storage chains solve the perennial problem
Greater investment in the food processing sector
Benefits of technology
FDI Better operations in production cycle and
Greater level of wages paid by international
More product variety
Newer product categories
Economies of scale to help lower consumer price
Increased purchasing capacity of consumers
How FDI ?
FDI should be allowed in stages
Initial stages: 26% FDI
Establishment Phase: 49% FDI 2 yrs
How FDI ?
Mature Phase: 100% FDI 2 yrs
No incentives needed to attract FDI
Market size and potential are sufficient
No need for costly tax breaks, import duty
exemptions, land and power subsidies, and
Wal-Mart‟s Productivity Loop
Consequences of Wal-Mart‟s
Step 1: Reduce Costs
A. Squeeze suppliers
1. Extracts producer revenues
2. Relocated manufacturing overseas
3. Increase foreign debts
B. Erodes Wages and Benefits
1. Low wages in a low-wage sector
2. Working off the clock
3. Skimps on benefits, e.g., health care
Consequences of Wal-Mart‟s
Step 2: Reduce Retail Prices
A. Improves consumer living standards
1. Increases consumer purchasing power
B. Displaces existing retailers
1. Drives out small chains and independent producers
C. Displaces existing suppliers
1. Excludes local businesses from internal Wal-Mart supply
D. Triggers retail price wars
1. Pressures industry rivals to imitate its operative behavior
2. Extends to national and global markets
Consequences of Wal-Mart‟s
Step 3: Increase Sales
A. Increases efficiency of supply systems
1. Higher sales volume means greater economies of scale
B. Facilitates additional consumer debt
Kishore Biyani and Big Bazaar
Starts with his family business in textile.
1987 he launched frist ready-made trousers brand-
1992 Pantaloon Fashion went public.
Started manufacturing garments under two more
brands – John Miller and Bare.
The business seems unviable due to high distribution
cost and margins.
1997 – opened his first store at Kolkata.
Store did a business worth Rs 100 million.
2001 he introduced the hypermarket concept
adapted to Indian conditions in the form of Big
For further expansion Biyani went for a loan of Rs
Was able to pull out over1,00,000 people within
1st week of its operation.
Gave the Indian customers the feel of local market
place – narrow lanes, crowded market place and
customers bumping into each other and into
He understood that Indian like the hustle-bustle of
the market place, which gives them a feeling that
the goods are sold at a lower price.
Exploited the Economics of scale.
Tie up with manufactures to bring down the selling
price of products.
2002 Biyani started Food Bazaar within Big
Focused on “Farm To Plate“ concept in Food Bazaar
(Farm next to the store).
Sold In House products.
Used traditional supply chain management.
His principle was “KIS” Keep It Simple; ie not
making the operations complex.
CONSUMPTION IDEAS INVESTMENT
WHO? FUTURE RETAIL Everyone that constitutes
WHERE? FUTURE SPACES Creating property &
public retail infrastructure everywhere in India
WHAT? FUTURE BRANDS Identify, mentor, invest
and grow INDIA centric brands Plan
HOW? FUTURE CAPITAL Property, Brands,
Insurance & most importantly easy access to money
LINE OF BUSINESS
HEALTH, BEAUTY & WELLNESS
Pantaloon Retail (I) Limited
Pantaloons 25,000(sq.ft.) Lifestyle(format)
Central 1,25,000(sq.ft.) Lifestyle
Big Bazaar 50,000(sq.ft.) Value
Fashion Station 15,000(sq.ft.) Value
FoodFood Bazaar 10,000(sq.ft.) Lifestyle & Value
GMBig Bazaar 50,000(sq.ft.) Value
Books & MusicDepot 1,000-6,000(sq.ft.) Lifestyle &
Type Health, Beauty & Wellness
Star & Sitara(Beauty Products) 1,000-2,000(sq.ft.)
Star & Sitara(Beauty Salons) 2,500(sq.ft.) Value
Health Village 25,000(sq.ft.) Lifestyle & Value
Gen M500-1,000 (sq.ft.) Lifestyle
M Port 1,500-2,000(sq.ft.) Lifestyle
M Bazaar 250-500(sq.ft.) Value
Electronic Goods & Consumer Appliances
E-Zone 12,500 (sq.ft.) Lifestyle
Electronics Bazaar 3,000-6,000 (sq.ft.) Value
Furniture, Furnishings & Accents Collection I10,000
Furniture Bazaar3,000-6,000 (sq.ft.) Value
Home Improvement Home Town1,25,000 (sq.ft.)
Lifestyle & Value
Restaurants, Leisure & Entertainment
Blue Foods (50:50) --Fine Dining Restaurants
Galaxy Entertainment (15.73 % stake)
Bowling Company 30,000Lifestyle
F123-Arcade & Games 7,000-20,000 Lifestyle
Sports Bar 2,500 Lifestyle
Chamosa 100 Value
Footwear Retailing –Foot Mart Retail (I)
LimitedLiberty Shoes (51:49)Shoe Factory 6,000-
Fashion & SportswearPlanet
GJ Future Fashions Limited (50:50)
Health, Beauty & Wellness :-
ManipalHealth Systems ManipalCure & Care
(50:50)Lifestyle & Value
Leveraging Future Group‟s presence across 70% of
Objective is to create the experience of
26thJanuary on the net.Futurebazaar.comto focus on
deals, gifting and trust.
Beta testing underway
•73% HSRIL (Home)
•74% FCH (Capital)
•100% F/Media (OOH)
•100% F/Bazaar (E-Tailing)
•100% F/Logistics (SCM)
•100% PFP (Sourcing)
•100% Pantaloon Food Solutions (F&B)
•49% Planet Retail
•50% Blue Foods
•50% CapitalLand(REIT & MM)
•50% Alpha GroupConsolidated
Huge Scope for Development
Organized retail is fast growing at a rate of 30%
Greater opportunity for employment
Offering more & more special discounts.
The Great Indian Shopping Festival.