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1 Retailing World’s largest private industry US$ 6.6 trillion sales annually Indian retailing Largest employer after agriculture - 8%* of population Highest outlet density in world Around 12 mn outlets Still evolving as an industry Long way to go An overview Retailing: An overview

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2 Wal-Mart Topmost global Fortune 500 company(3 Consecutive Years) Annual Sales of over US$ 250 bn India’s two largest retail player turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop) Fortune 100 9 Retailers Carrefour, Ahold, Home Depot, Kroger, Metro, Kmart-Sears, Target, Albertsons’ An overview Retailing: An overview

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3 Weekly Markets Village Fairs Melas Convenience Stores Mom and Pop/Kiranas PDS Outlets Khadi Stores Cooperatives Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Traditional/Pervasive Reach Government Supported Historic/Rural Reach Modern Formats/ International Evolution of Indian retail Source of Entertainment Neighborhood Stores/Convenience Availability/ Low Costs / Distribution Shopping Experience/Efficiency

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4 Informal retailing Sector Typically small retailers. Evasion of taxes Difficulty in enforcing tax collection mechanisms No monitoring of labor laws Formal Retailing Sector Typically large retailers Greater enforcement of taxation mechanisms High level of labor usage monitoring Indian retail Evolution of Indian retail

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5 Corporate Houses Tatas: Tata Trent RPG group: Food World, Health and Glow, etc ITC: Wills Life Style Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc. Dedicated brand outlets Nike, Reebok, Zodiac etc Multi-brand outlets Vijay Sales, Viveks etc Manufacturers/ Exporters Pantaloons, Bata, Weekender Indian retail Categories of Indian retail

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6 Modern Format retailers Supermarkets (Foodworld) Hypermarkets (Big Bazaar) Department Stores (S Stop) Specialty Chains (Ikea) Company Owned Company Operated Traditional Format Retailers Kiranas: Traditional Mom and Pop Stores Kiosks Street Markets Exclusive /Multiple Brand Outlets Indian retail Classifying Indian retail

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7 Hypermarket Big Bazaar Giants Shoprite Star Department store Lifestyle Pantaloons Piramyds Shoppers Stop Trent Entertainment Fame Adlabs Fun Republic Inox PVR Indian retailers Large Indian retailers

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8 Greater per capita income Increase in disposable income of middle class households 20.9%* growth in real disposable income in ’99-’03. Growing high and middle income population Growing at a pace of over 10%* per annum over last decade Affordability growth Falling interest rates Easier consumer credit Greater variety and quality at all price points Indian consumer The changing Indian consumer

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9 The urban consumer Getting exposed to international lifestyles Inclined to acquiring asset More discerning and demanding than ever No longer need-based shopping Shopping is a family experience Changing Mindset Increasing tendency to spend Post Liberalization children coming of age 100 mn 17-21 year olds*. Tend to spend freely. Greater levels of education Indian consumer The changing Indian consumer

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10 Market size Current market size is roughly US$ 286 bn* 96% of the 12 Million stores are less than 500 Sq. ft. Forecast Growth rate for the retailing industry is roughly 8.3% for 2003-2008 Sales from large format stores would rise by 24-49%** Formal and modern format retailing would enjoy rapid growth Anticipated growth Anticipated growth

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11 Growth determining factors Government Policy Infrastructure development GDP growth Employment generation and job creation In several new sunrise industries Implies greater purchasing power Growth factors Growth factors

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12 India ranked 5th in the Global A.T Kearney Retail Development Index Second only to China in Asia Least saturated of all global markets studied The least competitive of all global markets studied Implies lower barriers of entry for global players Considering tremendous market size, excellent potential for foreign players India ranked 3rd in the Global A T Kearney FDI Confidence Index in 2004 Improved from Rank 6 in Year 2003 Advantage India The Indian advantage

Employment in retailing is increasing : 

Employment in retailing is increasing 13



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