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, ChinaCountry 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 Retail2) Raheja Group3) Reliance Retail4) Tata Group5) RPG Group6) Landmark Group7) Piramal Group8) Bharti - Walmart9) 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 of Business Stake

Consideration(US$ million)

2005 Liberty shoes Future Group Retail (footwear) 51% 3

2005 Indus- league clothing Future Group Retail Clothing 68% 5

2005 Odyssey India Deccan Chronicle holdings

Leisure Retail chain (books, music, toys)

100% 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, France

Lingerie & women’s wear retailing

50% 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 IndianConsumerism

Important Trends

• The whole concept of shopping ……change

• Heavy pockets …

• The Mall Mania…

• Mall ….. Shopping + Entertainment

Map of India’s Income class1994 – 1995 1999 – 2000 2007 – 2008

Rich (Annual income >US$ 4700)Benefit Maximize: Owns CAR, PC

1 mn household 3 mn HH 6 mn HH

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

29 mn HH 55 mn HH 75 mn HH

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

48 mn HH 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)Hand to mouth existence: Not buying

35 mn HH 24 mn HH 17 mn HH

Source: 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

• 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

Search for retail positions

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.

• 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.

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

COMPANYCOMPANY

APPLICANTSAPPLICANTS

CONSULATNATSCONSULATNATS

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 & RemunerationsSerial no. Particulars Salary

1 Technical Engineer 20000

2 Accounts Manager 15000

3 Accounts Assistance (BackOffice, HR, Recovery, Bills)

10000

4 Sales & Marketing Manager 25000

5 Sales & Marketing Executive 20000

6 Front Desk Customer CareExecutive

8000

7 Technical Supervisors (MST) 15000

8 Bouncers / Supervisors 12000

9 Store Manager 35000

10 Merchandise Manager 25000

Strengths weakness

Technology IncentiveSuper Market StocksRising Disposable IncomeIncrease in number of people in earner category

Low conversion levelCustomer LoyaltyUnderdeveloped supply chainLack of adequate utilities

opportunity threat

Large consumer marketGrowth of Organized sectorRural RetailingPotential for Investment

High market share of unorganized marketShopping CulturePoor inventory turns & stock availability measuresInflation