Transcript Organized Retail

Organized Retail
The Opportunities Ahead
Retail – the largest private industry in world economy
Sales (USD Trillion) 1999
6.6
Retail
5.1
Financial services
3.2
Construction / Engineering
2
Packaged goods
1.4
Chenmicals
1.2
Energy
1.1
Electronics
1
Automotive
0.8
telecom
Pharmaceuticals; diagnostice
0.3
Source : Euromonitor, European Chemical Industry Council: Automotive News; Wall Street Journal; Chemical market
Reporter; IDATE; Global Vantage
Retailing – the largest private industry in the world
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Over 50 of the Fortune 500 companies are retail
companies.
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25 of the Asian top 200 companies are retail
companies.
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The world’s largest company is a retail company.
(Wal-Mart – last valued at Rs 1,091,250 crore)
Current Retail scenario in India
• Retail industry accounts for 35% of our GDP
• Estimated industry size - USD 205 bn (INR 230,000
cr) in 2004.
• Highest number of outlets per capita - 12 million
outlets
• Lowest per capita retail space - 2 sft per person as
compared to 16 sft per person in USA
• Only 4% of the country’s outlets are larger than 500
sft
India’s retail setup is therefore crowded with small outlets, largely
disorganized and primarily owner managed
Source: KSA Technopak
Organized Retail
Organized Retail arrived in India in the 90’s
• 1999
Rs 550 Crore
• 2002
Rs 4,000 Crore
• 2004
Rs 28,000 Crore
• 2005
Rs 35,000 Crore
Organised Retail Penetration
Examples of Growth in Emerging Markets
Years taken for organized retail to grow from <5% to over 20%
INDIA IS STILL AT 2.5%
Source : MG1, team analysis
Forecast 2010
• Organized retail is expected to grow at 30% - 35% p.a. to
become USD 24 bn (INR 100,000 cr) by 2010
• Organized Retail Penetration (ORP) will increase from less than
3% in 2005 to 8% by 2010
• FDI in real estate will accelerate pace of development of retail
infrastructure
• Investments in organized retailing are estimated to touch USD
4,000 Mn (INR 20,000 cr) by end of 2010
Source: KSA Technopak, HSBC Report
Development Curve of Organised Retail
Growth Drivers - Young & rapidly evolving
consumers
India is one of the most
youthful countries in the
world with 53% of the
population less than 25
yrs of age
Within a decade the number of people in age group of 20 – 49 would
increase 30% from 395mn in 2000 to 510 mn in 2010
Growth Drivers – Middle Class Population
Currently estimated at 92 Mn the middle class (family income
between INR 200,000 – 10,00,000 p.a.) is expected to be around
153 Mn by 2010
Growth Drivers – Retail Infrastructure
• India will have 225 malls by 2007 spread over 50 cities
• Relaxation in FDI in Real Estate to give further impetus
• Real Estate Mutual Funds ( REMFs) & Real Estate Investment
Trusts ( REITs) comes to India
Organized Retail
Emerging Opportunities
Retail – Largest Employer in the World
Increased employment opportunities
- The annual employee turnover of WalMart is more than the entire workforce of
General Motors
- 18% of the US workforce is employed in
retail
Socioeconomic Impact of McDonalds on the
US Job Market
McDonalds captures 1 out of every 6 restaurant visits in the US market
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Employs more than 5,00,000 people
Largest employer of High School Students
12.5 % of the US workforce has worked for McDonalds
1 out of 15 American got his/her 1st Job at McDonalds
Nations largest Job Training Organisation -Bigger than
the US Army – teaching the future US workforce “ work
routines,job discipline and organisational teamwork
Retail – Opportunities for Entrepreneurs
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World of Franchising
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Specialized retail formats
Bangles, Candy, Kite,
immense !!
-
opportunities
are