Indian Retail Opportunity - 2005
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IRMC Analysis on India Retail Opportunity
December 16, 2005
© Integrated Retail Management Consulting
INDIA: #1 EMERGING RETAIL GROWTH MARKET A.T. Kearney Global Retail Development Index (GRDI) Most Unsaturated: Modern Retail Penetration:
< 3% Large Market: Retail Market Size:
~US$ 330 billion Source: A T Kearney GRDI
© Integrated Retail Management Consulting 2005
WHY INDIA IS #1 RETAIL GROWTH MARKET
Market Growth: 8 - 10% annual growth with 30% + growth rate for modern format retail. Strong Economy: Fourth largest economy on Purchasing Parity Basis. Market Opportunities: Growing consumer aspirations together with very low penetration of modern format retailing. Infrastructure: Large amount of quality retail space being added.
© Integrated Retail Management Consulting 2005
Market Growth: Overall Growth:
8 – 10% CAGR Modern Format Growth:
25 - 35% CAGR
INDIA RETAIL GROWTH OPPORTUNITY
Tremendous
(% Penetration)
Head Room for
100 90 80
Growth:
75
70
55
60
< 3% 40
50
35
40
Penetration
30 20
30 20
17 2.5
10 0 Taiwan
M alaysia Thailand
Brazil
Indonesia
Poland
China
Taiw an
Malaysia
Thailand
Brazil
Indonesia
Poland
China
India
India
Source: IRMC Research © Integrated Retail Management Consulting 2005
LARGEST RETAIL CHAINS Largest retailers (number of stores) Sector Public Distribution System Post Offices Petrol Pumps KVIC Defense Stores Footwear Health and Beauty care Apparel and textiles Café Watches Food and grocery Restaurants Pharmacies Music Retail Jewellery Consumer Durables Books Retail Department stores
Number Retailer of Stores 46300 16000 1800 7000 3400 Bata 4700 Shahnaz 350 Raymond 320 Café Coffee Day 200 Titan 196 Subhiksha 142 Pizza Hut 120 Apollo 90 Planet M 75 Tanishq 67 Vivek's 50 Crossword 35 Shoppers' Stop 20 Source: IRMC Research
© Integrated Retail Management Consulting 2005
Largest Chains in Public Sector: Large Chains:
Small overall store numbers
INDIA: A NATION OF SHOPKEEPERS
Traditional Indian Retailing Number of retail outlets:
12 million
© Integrated Retail Management Consulting 2005
SHARE OF MODERN RETAIL FORMATS
(US$ billion)
Largest
16.00
Opportunity in
14.00
Food Retailing:
12.00
Size of Food Retail :
10.00 8.00
US$ 151 billion
6.00 4.00
Share of Modern Food Retail:
2.00 0.00
Health and M edical care Home décor beauty and products furnishing
Consumer durables
Jewellery and Books, watches M usic, Gifts
Clothing
Footwear
Traditional Retail Modern Retail Source: IRMC Research © Integrated Retail Management Consulting 2005
< 1%
INDIA NEW MALL DEVELOPMENT
Large Space
Million Sft
Mall Space in Key Indian Cities
Development:
25
Additional Mall
20
Space:
15
47 million
10
sft.
5 0 Mumbai
NCR Q 1 2005
Hyderabad
Pune
Bangalore
Additional Space by 2007
Source: Knight Frank
© Integrated Retail Management Consulting 2005
CHINA Vs. INDIA RETAIL
(US$ per capita)
(US$ billion)
1400
700
1200
600
1000
500
800
400
600
300
400
200
200
100
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
0
China GDP / capita (USD)
India GDP / Capita (USD)
China Retail sales (USD bn)
India Retail sales (USD bn) Source: M+M Planet Retail
© Integrated Retail Management Consulting 2005
Replicating China Retail Success:
Eight year lag
INDIA NEW MALL DEVELOPMENT Large Space Development:
Mall Space in Key Indian Cities
Additional Mall
25
Space:
Million Sft
20 15
47 million
10
sft.
5 0 Mumbai
NCR Q 1 2005
Hyderabad
Pune
Bangalore
Additional Space by 2007
Source: Knight Frank
© Integrated Retail Management Consulting 2005
INDIA RETAIL: REAL ESTATE RENTALS
Low Rentals for
(US$ per sft per month)
Prime Real
90
Estate:
80 70
US$ 5 / sft per month
60 50 40 30 20 10 0 Hong Kong
Singapore Shanghai
Beijing
Bangkok
Jakarta
Delhi
Manila
Source: CBRE Research © Integrated Retail Management Consulting 2005
INDIA RETAIL: SALES PER SQUARE FOOT
Opportunity to Leverage Low Rentals: Rent multiples:
15 X Sales / sft multiples
3X
Source: M+M Planet Retail © Integrated Retail Management Consulting 2005
INDIAN CONSUMER
© Integrated Retail Management Consulting 2005
Unmatched Demography
Large Young Working Class Base: Population below 25 years of age :
55%
Source : Statistical Outline of India
© Integrated Retail Management Consulting 2005
INDIA CONSUMER BOOM
Large
Ramp-up in mobile subscriber base
Consuming
400 350
Class: India
China
New Mobile Connections:
300
Mn Subscribers
250
1.5 million per month
200 150 100
India in Sept 2001 is equal to China’s customers in mid 95
50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: CLSA Asia-Pacific Markets © Integrated Retail Management Consulting 2005
Our Contact Details Bangalore Bikash Kumar Suryodai Complex, 143 Airport Road, Bangalore India Phone: +91-80-51233766 FAX: +91-80-25205097 Mobile: +91-98450 45742 Email: [email protected]
Other Offices: Delhi, Manila, Singapore
To Know More About Us Visit www.integratedretail.com
© Integrated Retail Management Consulting 2005
December 16, 2005
© Integrated Retail Management Consulting
INDIA: #1 EMERGING RETAIL GROWTH MARKET A.T. Kearney Global Retail Development Index (GRDI) Most Unsaturated: Modern Retail Penetration:
< 3% Large Market: Retail Market Size:
~US$ 330 billion Source: A T Kearney GRDI
© Integrated Retail Management Consulting 2005
WHY INDIA IS #1 RETAIL GROWTH MARKET
Market Growth: 8 - 10% annual growth with 30% + growth rate for modern format retail. Strong Economy: Fourth largest economy on Purchasing Parity Basis. Market Opportunities: Growing consumer aspirations together with very low penetration of modern format retailing. Infrastructure: Large amount of quality retail space being added.
© Integrated Retail Management Consulting 2005
Market Growth: Overall Growth:
8 – 10% CAGR Modern Format Growth:
25 - 35% CAGR
INDIA RETAIL GROWTH OPPORTUNITY
Tremendous
(% Penetration)
Head Room for
100 90 80
Growth:
75
70
55
60
< 3% 40
50
35
40
Penetration
30 20
30 20
17 2.5
10 0 Taiwan
M alaysia Thailand
Brazil
Indonesia
Poland
China
Taiw an
Malaysia
Thailand
Brazil
Indonesia
Poland
China
India
India
Source: IRMC Research © Integrated Retail Management Consulting 2005
LARGEST RETAIL CHAINS Largest retailers (number of stores) Sector Public Distribution System Post Offices Petrol Pumps KVIC Defense Stores Footwear Health and Beauty care Apparel and textiles Café Watches Food and grocery Restaurants Pharmacies Music Retail Jewellery Consumer Durables Books Retail Department stores
Number Retailer of Stores 46300 16000 1800 7000 3400 Bata 4700 Shahnaz 350 Raymond 320 Café Coffee Day 200 Titan 196 Subhiksha 142 Pizza Hut 120 Apollo 90 Planet M 75 Tanishq 67 Vivek's 50 Crossword 35 Shoppers' Stop 20 Source: IRMC Research
© Integrated Retail Management Consulting 2005
Largest Chains in Public Sector: Large Chains:
Small overall store numbers
INDIA: A NATION OF SHOPKEEPERS
Traditional Indian Retailing Number of retail outlets:
12 million
© Integrated Retail Management Consulting 2005
SHARE OF MODERN RETAIL FORMATS
(US$ billion)
Largest
16.00
Opportunity in
14.00
Food Retailing:
12.00
Size of Food Retail :
10.00 8.00
US$ 151 billion
6.00 4.00
Share of Modern Food Retail:
2.00 0.00
Health and M edical care Home décor beauty and products furnishing
Consumer durables
Jewellery and Books, watches M usic, Gifts
Clothing
Footwear
Traditional Retail Modern Retail Source: IRMC Research © Integrated Retail Management Consulting 2005
< 1%
INDIA NEW MALL DEVELOPMENT
Large Space
Million Sft
Mall Space in Key Indian Cities
Development:
25
Additional Mall
20
Space:
15
47 million
10
sft.
5 0 Mumbai
NCR Q 1 2005
Hyderabad
Pune
Bangalore
Additional Space by 2007
Source: Knight Frank
© Integrated Retail Management Consulting 2005
CHINA Vs. INDIA RETAIL
(US$ per capita)
(US$ billion)
1400
700
1200
600
1000
500
800
400
600
300
400
200
200
100
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
0
China GDP / capita (USD)
India GDP / Capita (USD)
China Retail sales (USD bn)
India Retail sales (USD bn) Source: M+M Planet Retail
© Integrated Retail Management Consulting 2005
Replicating China Retail Success:
Eight year lag
INDIA NEW MALL DEVELOPMENT Large Space Development:
Mall Space in Key Indian Cities
Additional Mall
25
Space:
Million Sft
20 15
47 million
10
sft.
5 0 Mumbai
NCR Q 1 2005
Hyderabad
Pune
Bangalore
Additional Space by 2007
Source: Knight Frank
© Integrated Retail Management Consulting 2005
INDIA RETAIL: REAL ESTATE RENTALS
Low Rentals for
(US$ per sft per month)
Prime Real
90
Estate:
80 70
US$ 5 / sft per month
60 50 40 30 20 10 0 Hong Kong
Singapore Shanghai
Beijing
Bangkok
Jakarta
Delhi
Manila
Source: CBRE Research © Integrated Retail Management Consulting 2005
INDIA RETAIL: SALES PER SQUARE FOOT
Opportunity to Leverage Low Rentals: Rent multiples:
15 X Sales / sft multiples
3X
Source: M+M Planet Retail © Integrated Retail Management Consulting 2005
INDIAN CONSUMER
© Integrated Retail Management Consulting 2005
Unmatched Demography
Large Young Working Class Base: Population below 25 years of age :
55%
Source : Statistical Outline of India
© Integrated Retail Management Consulting 2005
INDIA CONSUMER BOOM
Large
Ramp-up in mobile subscriber base
Consuming
400 350
Class: India
China
New Mobile Connections:
300
Mn Subscribers
250
1.5 million per month
200 150 100
India in Sept 2001 is equal to China’s customers in mid 95
50 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: CLSA Asia-Pacific Markets © Integrated Retail Management Consulting 2005
Our Contact Details Bangalore Bikash Kumar Suryodai Complex, 143 Airport Road, Bangalore India Phone: +91-80-51233766 FAX: +91-80-25205097 Mobile: +91-98450 45742 Email: [email protected]
Other Offices: Delhi, Manila, Singapore
To Know More About Us Visit www.integratedretail.com
© Integrated Retail Management Consulting 2005
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