Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Retail Industry
Contents
1.
Introduction ..................................................................................................................................................................... 3
2.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
2.7.1.
2.7.2.
2.7.3.
2.8.
3.
4.
5.
4.1.
4.2.
4.3.
5.1.2.
5.1.3.
5.2.
5.2.1.
5.2.2.
5.2.3.
5.2.4.
5.2.5.
5.3.
5.3.1.
5.4.
5.4.1.
5.5.
6.
5.5.1.
5.5.2.
5.5.3.
Conclusion ...................................................................................................................................................................... 33
1. Introduction
The Indian Retail Industry is the largest among all the industries, accounting for over 10 per cent of
the countrys GDP and around 8 per cent of the employment. The Retail Industry in India has come
forth as one of the most dynamic and fast paced industries with several players entering the market.
But all of them have not yet tasted success because of the heavy initial investments that are
required to break even with other companies and compete with them. The India Retail Industry is
gradually inching its way towards becoming the next boom industry.
The total concept and idea of shopping has undergone an attention drawing change in terms of
format and consumer buying behavior, ushering in a revolution in shopping in India. Modern
retailing has entered into the Retail market in India as is observed in the form of bustling shopping
centers, multi- storied malls and the huge complexes that offer shopping, entertainment and food all
under one roof.
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 factors in the growth of the organized Retail sector in India. The growth pattern
in organized retailing and in the consumption made by the Indian population will follow a rising
graph helping the newer businessmen to enter the India Retail Industry.
In India the vast middle class and its almost untapped retail industry are the key attractive forces for
global retail giants wanting to enter into newer markets, which in turn will help the India Retail
Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India
could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the
shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business,
growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the
growing of the market, with the government policies becoming more favourable and the emerging
technologies facilitating operations.
India is the country having the most unorganized retail market. Traditionally it is a familys
livelihood, with their shop in the front and house at the back, while they run the retail business.
More than 99% retailers function in less than 500 square feet of shopping space. Global retail
consultants KSA Technopak have estimated that organized retailing in India is expected to touch Rs
35,000 crore in the year 2005-06. The Indian retail sector is estimated at around Rs 900,000 crore, of
which the organized sector accounts for a mere 2 per cent indicating a huge potential market
opportunity that is lying in the waiting for the consumer-savvy organized retailer.
Purchasing power of Indian urban consumer is growing and branded merchandise in categories like
Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming
lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to
advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more
attention to the brand building process. The emphasis here is on retail as a brand rather than
retailers selling brands. The focus should be on branding the retail business itself. In their
preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of
building their own stores as brands to reinforce their marketing positioning, to communicate quality
as well as value for money. Sustainable competitive advantage will be dependent on translating core
values combining products, image and reputation into a coherent retail brand strategy.
Source: Indian journal of research, vol.3, issue 3
2. External environment:
2.1.
Market Size
The Boston Consulting Group and Retailers Association of India published a report titled, Retail
2020: Retrospect, Reinvent, Rewrite, highlighting that Indias retail market is expected to nearly
double to US$ 1 trillion by 2020 from US$ 600 billion in 2015, driven by income growth, urbanisation
and attitudinal shifts.
The report adds that while the overall retail market is expected to grow at 12 per cent per annum,
modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per
cent.
Retail spending in the top seven Indian cities amounted to Rs 3.58 trillion (US$ 53.7 billion), with
organised retail penetration at 19 per cent as of 2014. Online retail is expected to be at par with the
physical stores in the next five years.
India is expected to become the worlds fastest growing e-commerce market, driven by robust
investment in the sector and rapid increase in the number of internet users. Various agencies have
high expectations about growth of Indian e-commerce markets. Indian e-commerce sales are
expected to reach US$ 55 billion by FY2018 from US$ 14 billion in FY2015. Further, India's ecommerce market is expected to reach US$ 220 billion in terms of gross merchandise value (GMV)
and 530 million shoppers by 2025, led by faster speeds on reliable telecom networks, faster
adoption of online services and better variety as well as convenience.
Indias direct selling industry increased 6.5 per cent in FY2014-15 to Rs.7,958 crore (US$ 1.19 billion)
and is expected to reach a size of Rs.23,654 crore (US$ 3.55 billion) by FY2019-20, as per a joint
report by India Direct Selling Association (IDSA) and PHD.
2.2.
Investment Scenario
The Indian retail industry in the single-brand segment has received Foreign Direct Investment (FDI)
equity inflows totalling US$ 344.9 million during April 2000September 2015, according to the
Department of Industrial Policies and Promotion (DIPP).
With the rising need for consumer goods in different sectors including consumer electronics and
home appliances, many companies have invested in the Indian retail space in the past few months.
Amazon India expanded its logistics footprint three times to more than 2,100 cities and
towns in 2015, as Amazon.com invested more than US$ 700 million in its India operations
since July 2014.
Adidas AG, reknowned for its Adidas and Reebok sports brands, has become the first foreign
sports company to get government approval to open 100 per cent foreign-owned stores in
India.
Walmart India plans to add 50 more cash-and-carry stores in India over the next four to five
years.
Aeropostale, an American teen fashion retailer, has chosen to enter India over China, and
expects India to be among its top three markets over the next four years with revenue target
of Rs 500 crore (US$ 75 million).
Opinio, a hyperlocal delivery start-up, has raised US$ 7 million in a Series-A funding from
Gurgaon-based e-commerce fulfilment service firm Delhivery along with investment from
Sands Capital and Accel Partners.
Textile major Arvind Limited has announced a partnership with Sephora, owned by LVMH
Moet Hennessy Louis Vuitton, a French luxury conglomerate, in order to enter into the
beauty and cosmetics segment.
Mobile wallet company MobiKwik has partnered with Jabong.com to provide mobile
payment services to Jabongs customers.
DataWind partnered with HomeShop18 to expand its retail footprint in the country. Under
the partnership, HomeShop18 and DataWind would jointly launch special sales programmes
across broadcast, mobile and internet media to provide greater access to the latters tablet
range.
FashionAndYou has opened three distribution hubs in Surat, Mumbai and Bengaluru to
accelerate deliveries.
Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 375 million) in a fruit and
vegetable processing unit, an integrated meat processing unit, and a modern shopping mall
in Hyderabad, Telangana.
Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and the fourth-largest
supermarket retailer in the country, acquired Total hypermarkets owned by Jubilant Retail.
With an aim to strengthen its advertising segment, Flipkart acquired mobile ad network
AdiQuity, which has a history of mobile innovations and valuable experience in the ad space.
US-based Pizza chain Sbarro plans an almost threefold increase in its store count from the
current 17 to 50 over the next two years through multiple business models.
2.3.
Trend 1: Consumer buying behaviour is evolving faster than before; buyers expect not only a
frictionless but also a real experience.
Todays consumer is socially empowered, tech-savvy, information rich and time starved. The
resulting level of disruption driven by this generation of consumers is unprecedented. Their ability to
influence fellow consumers and companies alike is magnified well beyond that of previous
generations. As a result, these consumers expect the world to be at their fingertips, at a place and
time of their convenience. They dont go shoppingthey are shopping 24X7. Further, they want an
authentic shopping experience that is customised to their needs
Trend 2: Competitive intensity is on the rise like never before; the growth of well-funded ecommerce companies coupled with hyper-local regional players can lead to consolidation in store
footprints for many retailers.
The rise in e-commerce is forcing traditional brick-and-mortar retailers to rethink their store formats
and numbers. At present, e-commerce is confined to the metro-dwelling, web-savvy, computer-and
smartphone-using professional class. It is the same class that is also being served by big corporaterun stores. Right now, this retail segment, more than small shopkeepers, faces a threat from ecommerce. Sales per sq ft for big Indian retail stores has been declining due to this competition. The
decline is particularly noticeable in segments like music, electronics, books and apparel. For the past
three years, many big retailers have cut down on their new store openings as a result of competition
from e-commerce.
Trend 3: Birth of the experience store will set new benchmarks in overall customer and brand
experience
While the purchase journey is still centered on the physical store, the practice of omnichannel
retailing has helped transcend physical boundaries for both the customer and the retailer. Over a
relatively short period of time, Indian customers seem to have comfortably embraced multichannel
shopping. This change has also come about as a result of the smartphone revolution in the country.
Trend 4: Indians are learning to look beyond products and are ready to invest in services
One of the key drivers in the growth of online retail is going to be the onset of services which will
bring in a whole new arena of business that was not perceived as retail into the purview of this
business. Services associated with the product such as installation, insurance, extended warranty,
annual maintenance contract (AMC), etc. did not qualify as key differentiators, now Indian
consumers are looking beyond the product and are expecting organisations to understand their
needs and offer end to end solutions.
Trend 5: Curation, localisation, and reimagining the overall value proposition of products is needed
for retailers to woo customers
The retail industry is facing an explosion of creativity and retailers are pulling out all the stops to woo
their customers. Brands like Chumbak, Happily Unmarried and India Circus have carved a niche for
themselves with their quirky design themed lifestyle products. Retailers like Forever 21 and Zara,
also considered as pioneers in fast fashion, have seen meteoric success with their unique fresh off
the ramp style and youthful appeal. Similarly, gourmet food retailers and several fashion and
apparel retailers have gathered their most loyal followers on the basis of their specially-curated
collections. Apparel and fashion retailers are increasingly launching collections which have been
handpicked by youth icons and fashion designers at affordable prices. Recently, a popular restaurant
aggregator application added a list of restaurants curated by popular celebrity chef George
Calombaris to their collection.
Product exclusivity, which has traditionally been a forte of luxury retailers, has caught on as a
marketing strategy across categories and prices ranges. Food and beverage products, electronics,
and the fashion and apparel segment saw several exclusive product launches through their online
channel as a strategy to attract maximum consumers in the past year. Retailers are becoming
extremely conscious of maintaining exclusivity in their product portfolios.
Trend 6: Supply chain management will see a fair amount of shake-up; goods and services tax
(GST) and collaborations across the supply chain will define what it takes to reach the consumer
The three key value propositions of price, assortment and service offered by online stores are
changing the reasons to shop at a traditional brick-and-mortar store. The traditional supply chains
are simply not set up to handle this demand for variety, speed and convenience. Although many
online retailers are able to promise a wider assortment of products and faster deliveries at highly
discounted prices, most of them are still grappling with building lean processes to create a resilient
and responsive supply chain that is cost-effective.
Trend 7: Managing risks will become critical, giving rise to tougher security standards
Fraud can be a pressing challenge for the retail industry, with the potential to impact finances, erode
customer trust and impact brand value. Retail companies tend to have several third-party
touchpoints such as vendors/suppliers, transporters, manufacturers/subcontractors, packers,
stockists, distributors, or other service providers, that can significantly increases the risk of collusive
frauds that are difficult to detect.
Trend 8: Store skills will improve; investments in training will increase to create retail employees of
the future
With the concept of retail in India changing from a product focussed to a consumer-focussed
industry, people management will play a critical role. Retailers will therefore take renewed and
focussed approaches to engage and train their store employees.
Trend 9: New high streets will emerge and with extensive data available, including shopping
patterns of the underserviced, newer physical stores will come up in Tier II cities to cater to their
requirements better
We have seen the steady rise of Tier II and tier III cities as new hubs for retail consumption. Ecommerce players now have tangible data which proves that regions beyond metros have been
driving sales comparable to traditional consumption centers. The increasing sale of smartphones and
the consequent increase in Internet user base has led to the emergence of small towns as eommerce hubs, while physical retailers continue to face challenges like high real estate costs, labour,
sourcing and supply chain management, along with the conditions applicable for multi-brand and
single-brand retail trading in India. Retailers who were interviewed as part of our survey also
vouched for the growing demand from Tier II and Tier III cities and omnichannel assistance to
overcome any infrastructural inefficiency. The increasing demand will lead to higher confidence
among retailers to invest in real estate in these cities.
Source: pwc report
2.4.
India was ranked fifth in 2012 on the Global Retail Development Index, by AT Kearney, highlighting it
as one of the key foreign investment destinations worldwide. However, in 2013, the rank fell to
fourteenth possibly due to slow spending and general economic slowdown, along with policy
concerns over approval of multi-brand retail across several states in India. This trend is expected to
reverse soon supported by factors such as improving demographics, rising disposable income levels,
expansion of organised retail sector into Tier 2 and 3 cities, changing consumer habits, etc. This
could provide a wide window of opportunities for national and international players in the next five
to ten years.
Indian advantage
Demand potential
Healthy
Innovation in financing
Collective
Increasing investments
Foreign
Policy support
About
2.5.
The Union budget has been rolled out by the new government, with promotion of overall economic
growth as a key objective. FY15 has witnessed policy continuity and pursuit of certain reform
measures aimed at reviving growth and surmounting structural constraints in the economy. On the
other hand, the level of interest rates is still viewed by the markets to be on the higher side and a
key factor in stifling investment commitments by industry.
Near term issues notwithstanding the organized retail opportunity in India continued to attract
interest from both large Indian business houses and multinational retailers. It is our belief that over
the medium to long term, most of the earlier arguments in favour of the sector continue to be valid.
Consistent with the coverage in earlier reports, the following constitute the principal arguments in
favour of organized retailing.
Penetration of Organised retail:
About 8% of the total retail market in India is accounted for by the modern/ organized retail
sector. The remaining market is served by small, independent retailers with an average of 500 sq.
feet trading space, fragmented across sub-segments and offering limited shopping conveniences
to customers. They are supported by a network of manufacturers, distributors and wholesale
traders who operate with many global and local brands. This is in contrast to an average of 80%
plus penetration of organized retail in many developed nations. Further, 69% of Indias
population lives in rural areas & this population contributes just 54% of the total retail
consumption. In the recent years we have seen increasing traction for organized retail not only in
tier 1 and tier 2 cities but in tier 3 cities as well.
Demographics
India is a young nation, with two third of the population under 35 years of age. While the global
median age for population is 33 years, Indias median age is around 23 years. The high
percentage of youth population should drive the demand for more fashionable clothing as well as
for ready meals & processed food due to their increased propensity to consume. The increasing
desire to look good & presentable influenced by western culture and exposure to online & social
media have boosted the organized retail markets. Immense scope is seen for banners offering an
innovative product range to meet the aspirations of the brand conscious consumers with evolving
preferences.
The demographics coupled with less than 10% of the work force being directly employed by the
organized sector seems to contribute to a constant shift upwards in the reference point of the
average consumer in terms merchandize aspired for. Besides the huge untapped market and the
opportunity afforded by the demographics, the following factors/ trends are seen contributing to
growth in spending overall, and particularly for organized retail over the medium term:
Changing family level organization/ role definitions and exposure
More nuclear families
Increase in the number of working women
Kids being more informed and demanding
Increasing exposure to and influence of cosmopolitan media; consequent adoption of Western
habits and markedly higher brand consciousness
Easier availability of jobs (especially Outsourcing & IT related); BFSI & related employment is
expected to increase to over 12 million in the coming decade
Increased availability of credit/ social acceptance of consumption aided by borrowings; it is
estimated that about 15% of the people in urban cities are currently making monthly payments for
loans
2.6.
Cost pressures there has been significant inflation in energy costs and common area
maintenance charges in malls in the last few years
Availability of retail talent the last few years have seen challenges related to paucity and
retention of trained talent
Quality real estate there is limited availability of quality real estate. This, coupled with high
rentals and non-adherence to committed schedule by builders pose significant challenges to
deployment of strategic plans related to expansion
Local legislations multiple local legislations across the country make it challenging for any
organization with pan-India presence
Supply chain management multiple issues with respect to infrastructure pose obstacles in
ensuring availability for customers
Complexity in taxation inconsistent tax regime across various states makes it difficult to
manage a pan-India network of stores
2.7.
Regulatory Environment
Increase in
employment
Infrastructure
investment
Sector
Source: ibef.org
Removing
middlemen
Benefitting
Indian
manufacturers
Technological
advancement
Entry Route
Automatic
Foreign investment
and promotion board
Foreign Investment
and Promotion board
FDI Limit
100%
100%
51%
Source: IMF
2.8.
The modern format, on the other hand includes supermarkets, hypermarkets, department stores
and specialty chains.
In discussing about the structure of the retail sector in India we cannot forgo forecourt retailing and
trade parks.
Trade parks
Trade parks are basically business complexes that promote international trade. The global players
here have access to the top Indian exporters. To the buyers this would prove to be a boon since they
do not have travel to far off towns to enter into business deals with the exporters, especially in
places where infrastructure is very poor. By this the exporters not only enhance their visibility but
they also enjoy a host of other advantages. They can design libraries, studio etc, in order to attract
potential customers.
Forecourt Retailing
This type of retailing is done by the oil companies in order to increase their revenue. They not only
deliver fuel but also offer other services to its customers.
4. Competitive landscape
4.1.
4.2.
Retail
Departmental
stores
Supermarkets/
convenience
stores
Hypermarkets
Pantaloon Retail is
the leader in this
format, with 512 Big
Bazaar stores and
online franchisees
HyperCITY (16
stores), Trent,
Spencers (Spencer
Hyper), Aditya Birla
Retail, and Reliance
are other players
Specialty stores
Titan Industries is
a large player, with
430 World of Titan,
174 Tanishq, and
336 Titan Eye+
shops
Vijay Sales,
Croma, and EZone
are into consumer
electronics
Landmark and
Crossword focus
on books and gifts
4.3.
Threat of new
entrants (High)
Bargaining
power of buyers
(High)
Competitive
rivalry
(Moderatehigh)
Bargaining
power of
suppliers (Low)
Threat of
substitutes
(Low)
1. Competitive rivalry
Entry of foreign players in the market and e-retailers have intensified competition
Customers low switching cost increases competition
The Indian retail sector is highly fragmented, which increases competition
With India being an attractive retail market, there is a high level of competition.
Competition is characterised by many factors, including assortment, products, price,
quality, service, location, reputation, credit etc. Aggressive e-commerce and digital
retailing coupled with new entrants such as business houses and international players are
intensifying the competition at a rapid pace.
Aditya Birla Fashion & Retail Ltd (ABFRL) (erstwhile Pantaloons Fashion & Retail) is Indias leading
fashion lifestyle entity. It includes endearing brands and retail businesses of Madura Fashion &
Lifestyle (Madura) and Pantaloons, respectively. ABFRL has the largest retail footprint of 5.4 million
square feet. Further, it owns a network of over 2,100 exclusive brand stores.
FY18E. Thus, we expect Pantaloons revenue to grow at a CAGR of ~27% over FY15-18E with
EBITDA margin growing to 5.5% in FY18E.
Source: FundsIndia
5.2.
Future Retail is the flagship company of Kishore Biyanis Future Group, Indias retail pioneer catering
to the entire Indian consumption space. It is Indias leading retailer, it ensures trust through quality
products, innovative offerings & affordable prices which help customers to achieve better quality of
life every day. It serves customers through over 10 million square feet retail space in 95 cities across
the country.
Through multiple retail formats, it connects a diverse and passionate community of Indian sellers,
buyers and businesses. Each year over 300 million customers walk into Future Retail stores and
choose products and services supplied by over 30,000 large, medium and small manufacturers and
entrepreneurs from across India. Company operates multiple retail formats in the hypermarket,
supermarket and home segment of the Indian consumer market including:
Big Bazaar A unique Indian hypermarket chain.
Fashion at Big Bazaar Affordable fashion destination aimed to make India thoda aur stylish.
Food Bazaar A hitherto unseen blend of a typical Indian bazaar and International supermarket
atmosphere.
Foodhall A premium lifestyle food destination.
eZone eZone brings to you the latest in electronics at the lowest prices.
Home Town Onestop destination for every need of the aspirational Indian home owner.
As Indias leading retailer, Future Retail Ltd inspires trust through innovative offerings, quality
products and affordable prices that help customers achieve a better quality of life every day. It serve
customers in 95 cities across the country through around 10 million square feet of retail space.
Future Retail is the flagship company of Future Group, Indias retail pioneer catering to the entire
Indian consumption space. Through multiple retail formats, it connect a diverse and passionate
community of Indian buyers, sellers and businesses. The collective impact on business is staggering:
Around 300 million customers walk into the stores each year and choose products and services
supplied by over 30,000 small, medium and large entrepreneurs and manufacturers from across
India.
Source: http://www.futureretail.co.in/
1987
2002
2007
2010
2013
Future Group officially launched India's largest State of the Art Logistical
Distribution Hub at Nagpur
Revenues expanded at a CAGR of 2.4 per cent during Future Retail sales growth (USD billion)
FY0815
Hypermarket and supermarket formats have a network of nearly 319 stores, encompassing
an area of over 10 million square feet
Under Future Fashion, the company owns a portfolio of 24 leading brands and covers more
than 98 cities
Big Bazaar is ranked the third most trusted brand and the most trusted retailer of 2014 for
providing quality services
Future Group and Bharti Retail combine retail business to create one of India's biggest retail
conglomerate and will create chain of 570 stores in 243 cities across India in next 3 to 5
years
gives the format the ability to respond faster to consumers and yet maintain a high consistency and
market leadership in pricing, positioning, availability and experience. Apart from its existing stable of
winning brands like DJ&C, Knighthood, Shristi, Lee Cooper Originals and Chalk, a number foreign
brands like Converse and Champion were introduced within the store.
: 13,000 + pincodes
: 3 Lac tonnes per month
: 214
: 1050+ (leased)
: Warehouse box space of 3.6 million sq ft
across India
Terminals/Parks
: Logistics Parks in Bhiwandi, Nagpur,
Hyderabad, Haryana and Logistics Terminals
in the top 14 locations of India
Number of Client
: 500+ clients with turnovers ranging upto
USD $ 40 bn
Key Clients
: ITC, Tata Motors, Mondelez, McCain,
Jubilant Foodworks, Pantaloons, Reliance
Comm, Clarks Footwear, P&G, Kelloggs,
Future Retail, Skechers, Future Lifestyle
Fashions, Reckitt Benkiser, , NEI, AGS
Transact, Hitachi, FCEL
Range of commodities
: FMCG, QSR, Food Processors, Dairy,
Poultry, Apparel & Lifestyle, ATM,
Healthcare & Life Sciences, Refrigerators.
Air Conditioners, Compressors, Toys,
Kitchen accessories, Furniture, Industrial
products, Plasticware, Stationary, Pumps &
Pipes, Fragrances & Flavours, Cables
Range of services including basic and value-added services (VAS): 4PL Consulting, Contract
Logistics, Express & FTL, VAS (Kitting & reverse Logistics), Marketplace, International Logistics, ECommerce, Temperature Controlled & Cold Chain
5.3.
Shoppers Stop
Shoppers Stop Ltd (SSL) is Indias prominent retail group and a pioneer in the organised retail
industry in India. From a single store in 1991, the company today is one of the largest chain of
department stores in the country. Shoppers stop offers customers an international shopping
environment and a world-class shopping experience with a wide assortment of national and
international brands across categories such as fashion apparel, accessories, cosmetics, perfumes,
home and kitchenware.
Over the years, Shoppers Stop has continued to introduce exciting new brands and collections and
has created a differentiator through its exclusive and non-exclusive retail arrangements with worldclass brands.
With a strong business model, the company is well equipped for a stable growth trajectory. In FY
201415, Shoppers Stop Ltd achieved a gross retail turnover of Rs 34.05 billion (US$ 544 million).
Source: http://www.shoppersstop.com
Shoppers Stop: The leader in diversified market strategy
2015
Awarded Most Admired Retailer of the Year Department Store at the IRF 2015
2014
Shoppers Stop received Energy Efficiency Initiative Award at Global Green Leadership
Awards 2014
2010
2008
Wins Emerging market retailer of the year award at the World Retail Congress
2005
2003
2000
Felicitated at the India Fashion Forum with 16th Images Most Admired Fashion Retailer: Omni
Channel Initiative: Multi Brand Award.
Opportunities
Geographical Reach: The Company continues to increase its Pan-India footprint. The Companys
strategy to increase the number of departmental stores, and therefore improve city wise
penetration in new cities, increase market share in existing cities through additional new stores in
those cities, and new stores in tier II cities, remains unchanged. Over the last five years the
Companys retail space has increased from 2.3 million square feet for the year ended 31st March,
2011 to 4.28 million square feet for the year ended 31st March, 2016 which is an impressive
increase of 86%.
Format Diversification and Expansion: The Company, in its constant endeavour to capture wallet
share, has diversified into multiple formats viz., HomeStop which retails hard and soft furnishing,
M.A.C., Bobby Brown, Estee Lauder & Clinique which retail high end makeup & skin care
products, Mother Care which retails infant and kids merchandise and airport retailing, by tying up
with the Nuance Group AG of Switzerland. The Company has also made a successful foray into
Internet retailing through its e-retailing portal. The Company continues to expand these formats
successfully and will maintain a focus on them.
Private & Exclusive Brands: The Private Brand Business is at a new phase of growth the journey
has started from being just fashion Labels to becoming National Brands with high customer
traction and Brand recall. The first step has been to move to a Brand lead vertical and give each
brand its own DNA and Brand identity. The financial growth has been mapped season-overseason so as to increase the share of Private Brand contribution to the Chain. The Product, Trend
mapping, Visual merchandising, in-store Presentation, Brand building, discounting and phasing
strategy is being worked upon at a category level so as to bring a diverse and unique assortment
and experience for the consumer. Through Brand building and engagement of loyalty customers
we are pushing for analytics driven sales and are also working closely with Marketing to increase
footfall and get more new customers to the store.
Omni Channel: Shoppers Stop embarked on a 3 Year omni-channel journey last year to tap into
the exponential e-commerce growth in India. The Company has plans for focused investments in
technology & operations set-up over the next few years to provide seamless shopping
experiences online & in-store for our customers and drive profitable revenue growth through
digital. As part of the Year 1 phase we have re-launched our website and introduced brand new
mobile apps in both Android PlayStore & iOS AppStore based on the SAP Hybris platform. This
year your Company will be investing in a CRM (Microsoft Dynamics) and a WMS (JDA) to build on
cross-channel customer service, supply chain & operations capabilities enabling customer
journeys such as Click N Collect, Endless Aisle & Ship From Store. Your Company believes more
consumers across the country will embrace Shoppers Stop through its digital shopping channels
due to the convenience of shopping our full assortment at best prices across channels viz. stores,
mobile, website with the added advantage of being able to return, exchange anytime, anywhere.
Threats
Economic Slowdown: Economic slowdowns have a direct impact on consumption. Retail being
the end service provider of consumption in the supply/value chain, is bound to face difficulties in
an environment of economic slowdown. The Company continuously looks at stepping up the
marketing activities and strong cost control to protect the Companys profitability.
Threat of New Entrants: With India continuing to be an attractive retail market, the Company
expects many new entrants into the sector, thus increasing competition. However, the
nationwide footprint, excellent customer service levels, look & feel of the stores, competitive
product offerings & capability of its management team to execute the business operations &
expansion are the few factors amongst many which would certainly help the Company to retain
its market share.
Competitive Rivalry in the Industry: There is intense rivalry among leading national retailers for
new locations and quality real estate. The Company believes that it has a robust pipeline of stores
for future expansion. Growing competition from online players, price war among e-tailers for
ramping up sales by offering steep discounts, attractive deals and lucky draws on a range of
products, has brought disruption to the traditional retail sector. Availability of quality real estate
space at commercially viable cost and at desired locations is a greatest challenge and will impact
the growth of the Company.
Source: Annual report
5.4.
The inception of the KKCL group dates back to the 1980s when there was no global denim brand in
India. The brands goal was to create unique best fits at the best prices. Since then, it has been a
constant endeavour of the Company to bring value to a fashion conscious generation of customers
in-spite of the challenges in the economy like rising prices, slow growth and high interest rates.
The major brands under KKCL are Killer, LawmanPg3, Integriti and Easies. They design, manufacture
and market jeans, casual wear, smart-formals, formals and accessories. K-Lounge and Addictions are
the Exclusive Brand Outlets as well as retail formats which operate in many cities in India and the
Middle East. The total store count is 316 with presence in 192 cities across 25 states in India.
5.5.
Trent Ltd.
Trent is a retail operations company established in 1998 that owns and manages a number of retail
chains in India. The company runs lifestyle chain Westside, one of Indias largest and fastest growing
chains of lifestyle retail stores; Star Bazaar, a hypermarket chain; Landmark, a books and music
chain; and Fashion Yatra, a complete family fashion store.
Westside is the mainstay of the retailing business of Trent. It has a number of stores in India, which
offer clothes, footwear and accessories for men, women and children, along with furnishings, artifacts and a range of home accessories. Star Bazaar offers a wide choice of products, including staple
foods, beverages, health and beauty products, vegetables, fruits, dairy and non-vegetarian products.
Landmark has a range of over 100,000 titles in books and music, and also stocks movies, toys, gift
items and stationery. Fashion Yatra represents the stores that bring quality fashion at low prices to
value conscious customers in towns across India.
Source: http://www.tata.co.in/company/profileinside/Trent
2013
2011
Westside gets into gourmet retailing, added gourmet and chocolate section
2008
front list adult & childrens books, tech accessories and stationery. The Company is still faced with
the challenge of establishing Landmark as a viable the family entertainment format.
Deep discounting by online retailers: Several online players have sought to disrupt the retail
market, especially in the last year, with deep discounting funded by overseas shareholders. The
sustainability of such deep discounting is debatable but we need to nevertheless handle the
onslaught and continue to be relevant to our target audiences.
Indirect taxation: The indirect tax regime with its multiplicity of charges and levies continues to
be an issue (should be addressed at least partly when the proposed GST regime is implemented
but even on that account both the rate and mechanics would still have material implications for
our operations). The primary negatives being the increase in the service tax has contributed to an
increase in the already high cost of occupancy and there is continuing litigation in this regard.
This is a significant financial charge to an industry which already faces pronounced challenges.
6. Conclusion
The retail industry in India is one of the most promising sectors in the Indian economy, with a high
level of innovation and disruption being witnessed along decades. The post liberalisation era
provided lucrative opportunities to businesses to spread their wings take a flight of success they had
been patiently waiting for. With the proliferation of retail businesses in India there arose intense
competition which compelled organisations to innovate in their product offerings to stand out of the
crowd. Suddenly the Indian market also started flooding with competition from foreign market and
Indian players were finding it difficult to sustain the pace of growth they had experienced until then.
Since then the Indian retail market has been seeing turbulence considering the highly competitive
scenario driving organisations crazy in the bid to prove themselves and increase their market share.
Today it is difficult than ever to sustain your success in the Indian retail scene and even the biggest
corporations strive hard to get their piece of the pie.
But, with government envisioning a truly global market in India and reforms like 100% FDI, The
Indian retail scene became livelier than ever before. Such reforms paved the way for many business
to introduce new products and business models into the industry thus fuelling competition and a
cycle of intense business innovation.
The macro environment suggests that theres lot of room new businesses to take root into the
Indian retail market, but the fact to observe here is that the overall competitive landscape projects
an antithetic scenario where every organisation is on its feet and is ready to counter any lurking
threat, whether it be a new product or a completely different customer experience. Such an
environment requires organisations to do their homework to the best of their capabilities and enter
the retail arena having a good taste of the ever volatile Indian customer behaviour. The only thing
that rules in the retail industry the degree of customer satisfaction you can provide and the level of
customer experience you can provide to your customer to lure them into buying your products and
services and creating a long-lasting relationship.