Retail Industry Analysis

Industry Outlook - Retail

Organized Vs Unorganized Retail Sector Organized Retail Sector

Unorganized Retail Sector

Organized Vs Unorganized Retail Sector Factor

Organized Retail Sector

Unorganized Retail Sector

Definition

Modern form of retailing

Traditional form of retailing

Examples

Hypermarket, Retail chain etc.

Mom n Pop stores, hand cart, pavement vendors etc

Market Share

3%

97%

Market Growth

35%

6%

Challenges

Poor supply chain management, aggressive expansion etc.

Use of labour intensive technology, lack of government support etc.

Retail Trade – India, USA, China Country

Trade ($b)

Employment Shops (mn) Organized sector

India

180-394

7

1.2

2-3

China

360

12

2.7

20

UAS

3800

12.6-16

15.3

80

Key Growth Drivers • Economic Growth • Demographics • Urbanization • Credit availability

Different Formats

Big Shots of the Industry

1) Pantaloon Retail 2) Raheja Group 3) Reliance Retail 4) Tata Group 5) RPG Group 6) Landmark Group 7) Piramal Group 8) Bharti - Walmart 9) A V Birla Group

Pantaloon Retail  Headquartered in Mumbai 450 stores across the country employing more than 18,000 people.  All India space- 5 mn sq.ft, expecting to reach 30 mn by 2010.  Various segment including food & grocery, home solutions, consumer electronics, Health & Beauty product etc.  Recent Innovations include e-commerce ‘Hybrid Format of ‘Small shops’

Raheja Group

 First Departmental store in India, SHOPPER’S STOP  Member of IGDS  7,52,000 sq.ft. retail space with turnover of 6.75 millions  Crossword, Mothercare, Home stop etc.  MOU with Home retail group of UK  Plan to establish network of 55 hypermarkets across the country with sales turnover of US$ 100 million by2010.

Reliance Retail  More than 300 Reliance fresh store and first Reliance Mart hypermarket in Ahmedabed  Expansion in two tier cities like Vijaywada, Pune, Ludhiana etc  Investment of Rs.30,000 cr to set up new formats of retail , expecting sales of Rs.90,000 cr by 2010

Tata Retail Group  Established in 1998  Trent- subsidies of Tata group operates Westside and Star India Bazaar, Croma  Plans to pen more than 27 stores across its retail formats adding 1.5 mn sq.ft. of space in the next 12 DLF malls

A V Birla Group  Strong presence in apparel- Madura Garments  Owned Brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England  Investment plan – Rs.8000-9000 cr in the first 3 years till 2010  “MORE” range of 15 supermarkets open at Nashik, Pune & other two tier cities

Merger & Acquisition Year Acquired/ JV Company / Target

Acquirer

Nature Business

ofStake Considera tion (US$ million)

2005 Liberty shoes

Future GroupRetail (footwear)

51%

3

2005 Indus- league clothing

Future GroupRetail Clothing

68%

5

2005 Odyssey India

Deccan Chronicle holdings

Leisure Retail chain 100% (books, music, toys)

14

2005 Landmark

Tata Trent

Books, Music, Accessories

74%

24

2006 Bistro hospitality

TGI Friday’s Restaurant

25%

N/A

2006 Indus League clothing

Etam Group, Lingerie & women’s 50% France wear retailing

8

Current Potential & Prospect of Indian Retail Sector

 Growth prospective  Hurdles in growth phenomenon  Supportive measures by Government  Current market meltdown & its impact  Overall scenario about Indian retail industry

Changing face of Indian Consumeris m

Important Trends • The whole concept of shopping …… change • Heavy pockets … • The Mall Mania… • Mall ….. Shopping + Entertainment

Map of India’s Income class 1994 – 1995

1999 – 2000

2007 – 2008

Rich (Annual income >US$ 1 mn household 3 mn HH 4700) Benefit Maximize: Owns CAR, PC

6 mn HH

Consuming (US$ 1000- 4700) 29 mn HH Cost-benefit optimizer: have bulk of branded consumer goods, 70% of 2-wheelers, refrigerators, washing machine

55 mn HH

75 mn HH

Climbers (US$ 500-1000) 48 mn HH Cash-constrained benefit seekers: have at least one major durable(mixer, sewing machine, television)

66 mn HH

78 mn HH

Aspirants (US$ 350-500) New entrants into consumption: have bicycle, radio, fans

48 mn HH

32 mn HH

33 mn HH

Destitute (Less than US$ 350) 35 mn HH Hand to mouth existence: Not buying

24 mn HH

17 mn HH

ource: Ernst & Young

Consumer Dynamics • Youngest population on the globe • Growth pace of the Indian economy • 97% retail market is untouched by organized retailers • Food & Grocery …………………. 55% • Consumption is moving out of the home • Indian consumers has grown richer…

The process of recruitment followed in India in organized retail industry For Junior level

Search for retail positions

• Junior level, required in a mass number. →go ahead with paper ads for walk-ins •

Requirement is less for junior level

→ go ahead with consultants and reference recruitments

For Junior level • The recruitment process starts with an interview taken by → department managers → followed by store manager → HR → team leaders.

What is the process of recruitment followed in India in organized retail industry? For Middle level

•

Middle level, then

→ consultants → Job - portals → news paper ads of walk-ins.

For Middle level • The recruitment process starts with first short listing by HR then interview is conducted with → department head → Store Manager → Zonal Manager → HR

Recession- hit- recruitment strategies • Optimizing staff potential • Adopt a scientific method in their recruitment policies, • Laying more emphasis on quality than quantity. • Aim to hire people in large numbers to shortlist the ones that are 'best available' geographically. • The PAC test to decide from “where to hire” and “where to locate the firm

Why does Company hire Placement Consultants • To help them to find the right candidate to join their organization. • Job Seekers contact Recruitment firms to help them identify and then apply for the right job.

The role of recruitment agents and consultants vis-à-vis employment with organized retail in India. CONSULATN ATS

COMPANY •

Who are Placement Consultants in the Job & Recruitment Industry

→ an entity that works towards reducing clutter → streamlining the manpower requirements of Companies, big and small.

APPLICANT S

→ These firms serve as middlemen and help organizations and job seekers to find each other!

How It Works: • Consultants work for a number of different Companies, small and large. • These head hunter groups receive details about the job vacancy such as job responsibilities, desired experience, remuneration etc. • Next, Consultants go through their present database of job seekers registered with them. This database of aspiring candidates is a Placement Consultant's resource built over a period of time. • Job seekers contact recruitment firms either through phone, email or walk ins and register their Resumes with them. • Next, the wait begins - candidates hope to be informed of good openings and prepare themselves for interviews.

How to apply for a job through Placement Consultants:

• Identifying a Placement Firm • Contacting them • Following Up • Jobs and Career Websites  

Positions & Remunerations Serial no.

Particulars

Salary

1

Technical Engineer

20000

2

Accounts Manager

15000

3

Accounts Assistance (Back Office, HR, Recovery, Bills)

10000

4

Sales & Marketing Manager

25000

5

Sales & Marketing Executive

20000

6

Front Desk Customer Care Executive

8000

7

Technical Supervisors (MST)

15000

8

Bouncers / Supervisors

12000

9

Store Manager

35000

10

Merchandise Manager

25000

Strengths

weakness

Technology Incentive Super Market Stocks Rising Disposable Income Increase in number of people in earner category

Low conversion level Customer Loyalty Underdeveloped supply chain Lack of adequate utilities

opportunity

threat

Large consumer market Growth of Organized sector Rural Retailing Potential for Investment

High market share of unorganized market Shopping Culture Poor inventory turns & stock availability measures Inflation