9105763-Food-Retail-Ppt

Presentation onIndian Food RetailTrends & TasksbyAnand KumarJU07019 NSB School of BusinessNew Delhi : 

Presentation onIndian Food RetailTrends & TasksbyAnand KumarJU07019 NSB School of BusinessNew Delhi

We will talk about… : 

2 We will talk about… Retailing in India Indian economic snapshot Retailing Food retailing Trends Evolving consumer preferences Consumption shift Drivers Tasks Hurdles Tasks for suppliers Reliance Industries Snapshot

Happening times ! : 

3 Happening times ! Indian GDP growth at 9.4 % for 2006-07 is the highest in 18 years Analysts across the globe find Indian growth sustainable Economic outlook for India is positive Indian working population is confident Source: Indian Express

India is growing ! : 

4 India is growing ! India will be the third largest economy by 2040 India will be the 5th largest consumer market by 2025 Source: Economist

Most attractive retail market ! : 

5 Most attractive retail market ! India’s retail market has grown by 10% on average for past 5 years …steadily rising to top position in GRDI Source: AT Kearney Global Retail Development Index (GRDI)

Organized retail is still in its infancy ! : 

6 Organized retail is still in its infancy ! With just 2 % organized retail … ….India is a big opportunity Source: JM Morgan Stanley

Organized Retailing is big opportunity ! : 

7 With robust economy, sustained GDP growth and booming stock exchange, there are several emerging sectors in India waiting to be tapped . . . …Organized Retail is at the forefront of these opportunities Organized Retailing is big opportunity !

Growth in Organized Retail : 

8 Growth in Organized Retail India is in 2nd phase of retail growth Increasing Range, Portfolio and Format options Food retailing leads the growth in Indian organized retail Source: Ernst & Young

Food is the largest segment in Retail ! : 

9 Food is the largest segment in Retail ! At 77 % Food & Grocery is the largest segment in Retail sales Source: Ernst & Young Source: KPMG

Food Retail Sales in India : 

10 Food Retail Sales in India Total food sales to cross US$ 250 billion by 2008

Modern formats in Food Retailing is low ! : 

11 Modern formats in Food Retailing is low ! Lowest among major retail markets... …But growing due to evolving consumer preferences

Evolving consumer preferences ! : 

12 Indian consumers are evolving… From traditional to… … modernized traditional From globalize to… … Indianise From functional to… … lifestyle Evolving consumer preferences !

Evolving consumer preferences ! : 

13 Indian consumers are evolving… From value for money to… … value for time and convenience From cautious to… … experimentation From over-the-counter to… … touch-and-feel Evolving consumer preferences !

Consumption shift ! : 

14 Consumption shift ! Beverages Rise in coffee drinkers More fruit drinks and bottled water Wines and Liquor sales on rise Processed food consumption Increasing ready to eat food Growing premium foods Increasing private label From “packaged as stale” to “packaged is hygienic and high quality” Increased tendency towards disposability Shift from price consideration to design and quality

Consumption shift ! : 

15 Consumption shift ! Lifestyle Frequent eating out Growing health and dietary supplements Growing organic produce Greater focus on looking and feeling good Source: AT Kearney

Drivers of this shift ! : 

16 Drivers of this shift ! Demographic advantage : Young population

Drivers of this shift ! : 

17 Drivers of this shift ! Increasing discretionary income

Drivers of this shift ! : 

18 Drivers of this shift ! Increasing retail space Credit availability is also fuelling this shift

Still there are hurdles ! : 

19 Still there are hurdles ! Local and Global players’ concerns ‘Unorganized’ sector Nascent Supply Chain Low Technology Penetration Infrastructure Bureaucracy …work with these profitably by focusing on following tasks…

Tasks for suppliers ! : 

20 Tasks for suppliers ! Most important task Understand consumers 29 States + 6 Union Territories Even within each state, tremendous diversity in customs, traditions, attitudes 22 official languages and 1600 minor languages and dialects 70% Rural population – India lives in its 600,000 + villages ( < 20,000 population) However, accounts for more than half of sales of many FMCG and Consumer Durable products 35% still illiterate, not accessible by mainstream media India is a not a homogenous market

Tasks for suppliers ! : 

21 Tasks for suppliers ! Innovate & invest Products Not just customize but Indianize McDonalds and Pizza Hut Processing Nestle Marketing Market research Advertising Coca Cola and Pepsi Encourage experiments Kellogg’s Distribution Packaging Sachets & Smaller pack sizes Channels / Network Frito Lays and Anheuser-Busch

Tasks for suppliers ! : 

22 Tasks for suppliers ! New agriculture supply chain is emerging India removing non-value adding intermediaries Partnership with value adding intermediaries of the supply chain Technology transfer Streamline processes Maintain Quality

Slide 23: 

23 Tasks for suppliers ! Participate in Agri Infrastructure: Logistics

Tasks for suppliers ! : 

24 Tasks for suppliers ! Participate in agri related activities

Tasks for suppliers ! : 

25 Tasks for suppliers ! Focus on emerging markets (Tier 3 and 2 cities)

Tasks for suppliers ! : 

26 Tasks for suppliers ! Tap the rural retail market Rural India consists of 720 Million consumers across 627,000 villages 17% of these villages account for 50% of the rural population and 60% of the rural wealth Extensive reach is required as to cover 50% market 100,000 villages must be catered Immense opportunity amounting to US$ 125 billion Rural Retail is growing @ 7% p.a. Rural consumption is also shifting from basic food grains to fruits, vegetables, dairy and poultry products, as well as beverages Demand for better quality food leading to huge demand for basic foods

Tasks for suppliers ! : 

27 Tasks for suppliers ! All these can be done only if you … Establish franchisee Forge joint ventures Licensing agreement Strategic partnerships Explore other avenues … Act & Join !

Slide 28: 

28 Revenues US$ 19.9 billion Cash Profit US$ 2.9 billion Net Profit US$ 2 billion Total Assets of US$ 20.8 billion India and Reliance Revenues equivalent to 2.8% of India’s GDP 8.2% of India’s total exports Contributing 8% India’s indirect taxes 4.7% of the total market capitalization 11.5% weightage in Bombay Stock Exchange Sensex 9.3% weightage in National Stock Exchange Sensex US$ 20 billion enterprise created in 30 years Reliance: Contribution to Indian Economy

Slide 29: 

29 Global Rank Net Sales 342 Net Profit 194 Net Worth 226 Assets 351 Amongst the fastest 25 growing companies in Fortune 500 India’s only private sector company to list in fortune global 500 list 11 19 06 75 Reliance: Global Ranks

Reliance: Recent Major Initiatives : 

30 Reliance: Recent Major Initiatives Exploration & Production Refinery – Jamnagar Special Economic Zones Reliance Retail

Reliance: Retail Vision : 

31 To be the most admired and successful organized retail company in India that materially enhances the quality of life of every Indian By Providing unprecedented affordability, quality and choice Being the partner of choice in creating prosperity for Indian farmers and other vendor partners Unleashing the power of the Indian workforce through the generation of new & attractive employment opportunities Reliance: Retail Vision

Thank you ! : 

Thank you !