V INDIA - Most attractive retail destination

V $ 320 billion now -- $637 billion by 2015

V CAGR ² 5%
V Highly Fragmented ² ´A nation of shopkeepersµ
V 14% to India·s national GDP
V Jobs for 7% of workforce
 RETAIL
INDUSTRY

ORGANIZED UNORGANIZED
98% 2%

V v
 
 ² officially licensed retailers Eg. Large
privately owned retail company, retail chains etc.
V 4
 
 ² hand cart vendors, convenience
stores, paan/beedi shops, local kirana stores
 Increase in
Shift in Indian
purchasing po er Market flooded
population
hence consumer ith global brands
demographics
spending

Demand for
e ersed the erceptible qualit
branded and
sa ing habit to and ariet of
luxur goods
habitual spending choice
increased

‡Large number of
orking outh (median age 24)

‡Large number of orking outh (median age 24)

‡Gro ing number

 of orking omen
‡Gro ing number of orking omen

Consumer 
‡Nuclear families li ing in urban areas
‡Boom in ser ices sector
demanded ‡Nuclear families li ing in urban areas
organized retail ‡Boom in ser ices sector
experience
V Huge investment in retail infrastructure
V Traditional markets replaced by new formats
V Development of mall culture, supermarket,
hypermarket, and departmental stores.
V Food entertainment shopping under one roof
V SPENCERS
V RPG
V Reliance
V TATA
V Future group
V Lack of efficient supply chain
V Inefficient Third part logistics services
V Absence of proactive channels
· Cold chains

· Logistics infrastructure

· warehousing

V Lack of skilled employees

V Inade uate uality control
V Variation in policy regimes across different states
V Stringent labour laws
V Lack of status as an industry therefore difficult to raise capital for expansion
V Violent protests by small retailers for closure over illegal shops
V Established in 1969. Top of Fortune 500 list in 2007
V 3 subsidiaries :
· üal-Mart International
· Sam·s Club

· üal-Mart Stores Division US

V 9 Different retail formats
V Pricing Strategy
· Low Pricing Strategy ² ¶ Always low Prices·
· General merchandise prices ² set after price checks of K-Mart and Target
stores
· Food Prices ² set on basis of zones corresponding to food distribution
centres
 Economical Transportation
Prices Cost Savings

Faster
Huge Volume
replenishment
of Purchases Better of merchandise
Discounts
to
Customers
V IT in Supply Chain Management
· Bar codes for inventory tracking
· Satellite communication for co-ordination
· Electronically order placing to suppliers
· Use of RFID tags
V Think Global Act Local
· üal-Mart international : international operations
· 3000 stores in 13 countries
· Succesful in North and South America but not in
Germany and South Korea
· Restricted International approach : discriminatory in
entering international markets
V ühy Bharti ?
· Market leader in Indian telecom market
· Thorough understanding of distribution in Indian
markets
· Fully aware and capable to succeed in complex
environment of Indian market
· Capability to attract FDI
V Joint Venture
· 2 different formats : franchised retail company &
wholesale cash and carry joint venture
· 50-50 venture for back end SC management
and wholesale cash and carry operations
· Also different contract ² üalmart sharing
technology & expertise to support retail stores
built by Bharti
· Aim to link farmers directly to retailers
· Strong back end infrastructure ² Cold chain
logistics
V ðr tests s ll e i l c l si esses
V riticise f r t ei s ci ll res si le
c
V Wi el criticise f r r ctises s c s : re t r
rici , iscri i ti i st e , sq ee i
s liers
V e li it I i ·s iq e c lt r l f ct rs
V l i e e t c lle es
· 4
er
e el e
sic l i fr str ct re
· ðr q lit f r
s, tr c i , rel ct ce t 
t

er tec l
· tti  t i

le  l
crete re siti
V Emergence of organised retail sector
V üal-Mart·s joint venture with Bharti aimed at
capitalizing growing middle class
V Bharti ideal partner for üal-Mart
V Many uni ue challenges in India to overcome
V If challenges tackled , this partnership could
transform Indian retail