Industry Outlook - Retail

Organized Vs Unorganized
Retail Sector
Organized Retail Sector Unorganized Retail Sector
 Organized Vs Unorganized Retail Sector
Factor Organized Retail Unorganized Retail
Sector Sector

Definition Modern form of Traditional form of

retailing retailing

Examples Hypermarket, Retail Mom n Pop stores,

chain etc. hand cart, pavement
vendors etc
Market Share 3% 97%

Market Growth 35% 6%

Challenges Poor supply chain Use of labour intensive

management, technology, lack of
aggressive expansion government support
etc. etc.
 Retail Trade – India, USA,
China
Country 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 Retail
2) Raheja Group
3) Reliance Retail
4) Tata Group
5) RPG Group
6) Landmark Group
7) Piramal Group
8) Bharti - Walmart
9) 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
Acquirer Nature ofStake Considera
Year Acquired/ JV Business tion
Company / Target (US$
million)
2005 Liberty shoes Future GroupRetail (footwear) 51% 3

2005 Indus- league Future GroupRetail Clothing 68% 5

clothing
2005 Odyssey India Deccan Leisure Retail chain 100% 14
Chronicle (books, music, toys)
holdings
2005 Landmark Tata Trent Books, Music, 74% 24
Accessories
2006 Bistro hospitality TGI Friday’s Restaurant 25% N/A

2006 Indus League Etam Group, Lingerie & women’s 50% 8

clothing France wear retailing
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
Indian
Consumeris
m
 Important Trends
• The whole concept of shopping ……
change

• Heavy pockets …

• The Mall Mania…

• Mall ….. Shopping + Entertainment

 Map of India’s Income class
1994 – 1995 1999 – 2000 2007 – 2008

Rich (Annual income >US$ 1 mn household 3 mn HH 6 mn HH

4700)
Benefit Maximize: Owns CAR, PC

Consuming (US$ 1000- 4700) 29 mn HH 55 mn HH 75 mn HH

Cost-benefit optimizer: have
bulk of branded consumer
goods, 70% of 2-wheelers,
refrigerators, washing machine

Climbers (US$ 500-1000) 48 mn HH 66 mn HH 78 mn HH

Cash-constrained benefit
seekers: have at least one major
durable(mixer, sewing machine,
television)
Aspirants (US$ 350-500) 48 mn HH 32 mn HH 33 mn HH
New entrants into
consumption: have bicycle,
radio, fans

Destitute (Less than US$ 350) 35 mn HH 24 mn HH 17 mn HH

Hand to mouth existence: Not
buying

ource: 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

Search for retail positions

• 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
 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.
COMPANY CONSULATN
ATS

• 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
APPLICANT seekers to find each other!
S
 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 & Remunerations
Serial no. Particulars Salary

1 Technical Engineer 20000

2 Accounts Manager 15000
3 Accounts Assistance (Back 10000
Office, HR, Recovery, Bills)

4 Sales & Marketing Manager 25000

5 Sales & Marketing Executive 20000
6 Front Desk Customer Care 8000
Executive

7 Technical Supervisors (MST) 15000

8 Bouncers / Supervisors 12000
9 Store Manager 35000
10 Merchandise Manager 25000
Strengths weakness

Technology Incentive Low conversion level

Super Market Stocks Customer Loyalty
Rising Disposable Income Underdeveloped supply chain
Increase in number of people in Lack of adequate utilities
earner category

opportunity threat

Large consumer market High market share of unorganized

Growth of Organized sector market
Rural Retailing Shopping Culture
Potential for Investment Poor inventory turns & stock
availability measures
Inflation