Indian Organized Retail Industry (2005-2007)

Publication Date	March 2006
Publisher	RNCOS
Product Type	Report
Pages	60
ISBN Number	not applicable
Product Code	RCS00093

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Summary

India represents an economic opportunity on a massive scale, both as a global base and as a domestic market. Indian Retail sector consists of small family-owned stores, located in residential areas, with a shop floor of less than 500 square feet. At present the organized sector accounts for only 2 to 4% of the total market although this is expected to rise by 20 to 25% on YOY basis.

Retail growth in the coming five years is expected to be stronger than GDP growth, driven by changing lifestyles and by strong income growth, which in turn will be supported by favorable demographic patterns and the extent to which organized retailers succeed in reaching lower down the income scale to reach potential consumers towards the bottom of the consumer pyramid. Growing consumer credit will also help in boosting consumer demand.

The structure of retailing will also develop rapidly. Shopping malls are becoming increasingly common in large cities, and announced development plans project at least 150 new shopping malls by 2008. The number of department stores is growing much faster than overall retail, at an annual 24%. Supermarkets have been taking an increasing share of general food and grocery trade over the last two decades.

However, distribution continues to improve, but it still remains a major inefficiency. Poor quality of infrastructure, coupled with poor quality of the distribution sector, results in logistics costs that are very high as a proportion of GDP, and inventories, which have to be maintained at an unusually high level. Distribution and marketing is a huge cost in Indian consumer markets. It's a lot easier to cut manufacturing costs than it is to cut distribution and marketing costs.

Also, government has relaxed regulatory controls on foreign direct investment (FDI) considerably in recent years, while retailing currently remains closed to FDI. However, the Indian government has indicated in 2005 that liberalization of direct investment in retailing is under active consideration. It has allowed 51% FDI in "single brand" retail.

The next cycle of change in Indian consumer markets will be the arrival of foreign players in consumer retailing. Although FDI remains highly restricted in retailing, most companies believe that will not be for long. Indian companies know Indian markets better, but foreign players will come in and challenge the locals by sheer cash power, the power to drive down prices. That will be the coming struggle.

This report discusses the scenario of organized retail industry in India and the opportunities available for companies based on key statistics. We have answered Key questions like:

What is the market size and scope of the Organized Indian retail industry?
What are the Political, Social, Economic & Technological factors influencing the Indian Retail Industry?
What and where are the growth prospects and issues related to the industry?
What are the factors driving growth in this sector?
What is the size of organized market segment wise & its growth prospects?
Who are the major players of Indian Retail Industry, their presence and strategies being used by them to improve profitability?

We have attempted to answer these questions, through the RNCOS Industry Information Service on Indian Organized Retail Industry. Our analysis and outlook of Organized Retail Industry would serve as a key input for your business decisions and performance evaluation.

Report Features

The report gives an in-depth coverage of the Indian Organized Retail Industry. Chapter 1 gives the economic overview of the industry. Chapter 2 covers the FDI regulations & government policies. Demographic profile & consumer behavior of the industry has been discussed in chapter 3. Chapter 4 gives the overview of the Indian Retail Market. Chapter 5 covers the size and growth of organized market by segment. Mergers & Acquisition activity, Opportunities & Challenges and Pest Analysis has been discussed in chapter 6, 7 & 8 respectively. Chapter 9 discusses the emerging trends & forecast whereas chapter 10 talks about recent developments & issues. Finally, Chapter 11 provides company profiles of major players of the retail industry.

Content

1. Economic Overview
2. FDI Regulations & Government Policies
3. Demographic Profile & Consumer Behavior
- 3.1 India's Demographic Advantage
- 3.2 Consumer Behavior
4. Indian Retail Market - An Overview
- 4.1 Structure of Organized Retail Industry
- 4.2 Modern Retail Formats in India
  - 4.2.1 Hypermarkets
  - 4.2.2 Supermarkets
  - 4.2.3 Discount Stores
  - 4.2.4 Convenience Stores
  - 4.2.5 Department Stores
  - 4.2.6 Specialty Stores
  - 4.2.7 E-tailing
  - 4.2.8 Malls
5. Organized Market Size & Growth, by Segment
- 5.1 Fastest Growing Retail Segments in India
  - 5.1.1 Food, Beverage & Consumer Goods
  - 5.1.2 Apparel & Footwear
  - 5.1.3 Consumer Durables
  - 5.1.4 Health & Beauty Products
  - 5.1.5 Home Furnishing & Household Goods
  - 5.1.6 Leisure & Personal Goods (Music & Books)
6. Mergers & Acquisition Activity
7. Opportunities & Challenges
8. PEST Analysis
9. Emerging Trends & Forecast
- 9.1 Organized Retailing, 2010
10. Recent Developments & Issues
11. Company Profiles
- 11.1 Pantaloon
- 11.2 Trent Limited
- 11.3 Shoppers' Stop Ltd
- 11.4 Archies
- 11.5 Bata India Ltd.
- 11.6 Liberty Shoes Ltd.
- 11.7 Titan Industries
12. Appendices
List of Figures:
- Figure 1-1: India - FDI Drivers (%), 2004
- Figure 3-1: Percentage of Population aged 65 and Older (2000, 2025 & 2050)
- Figure 3-2: India - Mapping of Income Classes (1994-95, 1999-00 & 2005-06)
- Figure 3-3: India - Composition of Average Household Consumption (%), 2002-03
- Figure 4-1: Asia - Retail Growth across Countries (%)
- Figure 4-2: India - Structure of Retail Industry
- Figure 4-3: India - Organized Retail as a Percentage of FMCG Sales by City
- Figure 4-4: India - Fastest Growing Formats (% of Respondents)
- Figure 4-5: India - Mall Scenario (Area in Million Sq ft), 2001-2005
- Figure 4-6: India - Projected Breakup of Mall Spaces by City (%), 2007
- Figure 4-7: India - Projected Breakup of Mall Spaces by Region (%), 2007
- Figure 5-1: India - Breakup of Products Sold in Organized Retail (%), 2005
- Figure 5-2: India - Survey Results of Fastest Growing Retail Segments (%)
- Figure 5-3: India - Market Share of Urban vs Rural Regions, 2005
- Figure 5-4: India - Forecast of Consumer Goods in Retail Sales Growth (%), 2004-2009
- Figure 5-5: Total Retail Sales by Sectors (in Billion $), 1998-2008(e)
- Figure 5-6: India - Apparel Retail Sales Segmentation by Product Type (%), 2005
- Figure 5-7: India - Home Furnishing Retail Value (%), 2001-2004
- Figure 9-1: Organized Retail Forecast, 2012
- Figure 11-1: Pantaloon - Stock Chart
- Figure 11-2: Shoppers' Stop Ltd. - Stock Chart
- Figure 11-3: Archies - Stock Chart
- Figure 11-4: Bata India Ltd. - Stock Chart
- Figure 11-5: Liberty Shoes Ltd. - Stock Chart
- Figure 11-6: Titan Industries - Stock Chart
List of Tables:
- Table 1-1: Macroeconomic Indicators (1991 & 2004)
- Table 1-2: India - GDP & CPI (%), 2001-2007
- Table 2-1: Government Policies and Issues Checklist for Private Sector Development
- Table 3-1: Urban Rural Split (%), 1998, 2003 & 2008F
- Table 4-1: India - Retail Format Breakup in Organized Retail Outlets (2003 & 2004)
- Table 4-2: India - Major Hypermarket Players (by Brand, No. of Stores & Sales), 2005
- Table 4-3: India - Major Supermarket Players (by Brand, No. of Stores & Sales), 2005
- Table 4-4: India - Major Discount Store Players (by Brand, No. of Stores & Sales), 2005
- Table 4-5: India - Major C-Store Players (by Brand & No. of Stores)
- Table 4-6: India - Major Department Store Players (by Brand, No. of Stores & Sales), 2005 & Future Plans
- Table 4-7: India - Major Specialty Store Players (by Brand & No. of Stores), 2005
- Table 4-8: India - Operational Malls/Shopping Centre, 2005
- Table 5-1: India - Growth of Organized Retail (1999, 2002 & 2005)
- Table 5-2: India - Major Product Categories in Organized Retail Sales, 2004
- Table 5-3: India - Growth Estimates in Food & Grocery Segment (2005-2009)
- Table 5-4: India - Value Forecast of Body Care Products (2003-2008)
- Table 6-1: Mergers & Acquisition Activity in Retail Industry (2004 & 2005)
- Table 9-1: India - Industry Projections Retail Growth (2002 & 2010)
- Table 11-1: Pantaloon - Financial Summary (in Million Rs), 2004 & 2005
- Table 11-2: Pantaloon - Key Management Profiles
- Table 11-3: Trent Limited - Financial Summary (in Million Rs), 2004 & 2005
- Table 11-4: Trent Limited - Key Management Profiles
- Table 11-5: Shoppers' Stop Ltd. - Financial Summary (in Million Rs), 2001-2005
- Table 11-6: Shoppers' Stop Ltd. - Balance Sheet (in Million Rs), 2001-2005
- Table 11-7: Shoppers' Stop Ltd. - Key Management Profiles
- Table 11-8: Archies - Financial Summary (in Million Rs), 2004 & 2005
- Table 11-9: Bata India Ltd. - Financial Summary (in Million Rs), 2004 & 2005
- Table 11-10: Bata India Ltd. - Key Management Profiles
- Table 11-11: Liberty Shoes Ltd. - Financial Summary (in Million Rs), 2004 & 2005
- Table 11-12: Liberty Shoes Ltd. - Key Management Profiles
- Table 11-13: Titan Industries - Financial Summary (in Million Rs), 2004 & 2005
- Table 11-14: Titan Industries - Key Management Profiles
- Table 12-1: Breakup of Total Monthly Per-capita Consumer Expenditure (MPCE) by Broad Groups of Items for Households in different MPCE Classes by Rural Sector
- Table 12-2: Per 1000 Distribution of Households and Persons (by MPCE Class) & Average Number Per 1000 Households of Adults and Children (by Sex) in different MPCE Classes
- Table 12-3: Average Expenditure (Rs) per Person per 30 days on Groups of Items of Consumption for Rural Areas of Selected States/UTs