Transcript File

PRESENTATION ON
BIG BAZAAR
Presentation by
-Gurdeep Singh
-Pushpak Pandey
-Shaleen Agarwal
-Rohan Tandon
-Richa Kohli
Agenda
Retailing : An overview
Indian retail
The change factor
FDI in Indian retailing
Why FDI ?
How FDI ?
Big Bazaar- Company Profile
- Customer Segment
- Vision and Mission
- Swot analysis
- BCG Matrix
- Porter 5 Forces Model
Retailing: An overview

Retailing
 World’s largest private industry
US$ 6.6 trillion sales annually

Fortune 100
 9 Retailers
 Carrefour, Ahold, Home Depot, Kroger,
Metro, Kmart-Sears, Target, Albertsons’
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

Evolution of Indian retail
Historic/Rural
Reach
Traditional/Pervasiv
e Reach
Government
Supported
Modern Formats/
International
Exclusive Brand
Outlets
Hyper/Super Markets
Department Stores
Shopping Malls
Khadi Stores
Cooperatives
Convenience Stores
Mom and
Pop/Kiranas
Weekly Markets
Village Fairs
Melas
Source of
Entertainment
Neighborhood
Stores/Convenience
Availability/ Low
Costs /
Distribution
Shopping
Experience/Efficiency
Evolution of Indian retail

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
Categories of Indian retail

Indian retail



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
Classifying Indian retail

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
Large Indian retailers

Hypermarket





Department store

Indian
retailers





Big Bazaar
Giants
Shoprite
Star
Lifestyle
Pantaloons
Piramyds
Shoppers Stop
Trent
Entertainment




Fame Adlabs
Fun Republic
Inox
PVR
The changing Indian consumer

Indian
consumer


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
†From Euromonitor Retail Survey
The changing Indian consumer
Indian
consumer

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


*Data from NCAER
Anticipated growth

Anticipated
growth
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
Industry dynamics

Low domestic competition
 Because of fragmented nature of industry

Lack of exposure to global best practices
 Low entry barriers for unorganized retailing
 Moderate
entry barriers for organized
retailing

Wholesale system under-invested leading to
20-40% wastage

Non level playing field issues
 Wide differences in treatment of small and
large retailers
Industry
dynamics
Industry dynamics
issues

Real Estate Costs

Supply Chain Inconsistency

Poor Infrastructure

Lack of Skilled Manpower
Growth factors

Growth
factors
Growth determining factors
 Government Policy
 Infrastructure development
 GDP growth
 Employment generation and job creation
In several new sunrise industries
Implies greater purchasing power
The Indian advantage

Advantage
India
India ranked 1st in the Global A.T Kearney
Retail Development Index

India

Russia

China
THE SIZE OF THE OPPORTUNITY
Products
Total Retail
Organised
Organised
Rs. Billion
Retail
Retail as %
Rs. Billion
of Total
Food & Grocery
6422
50
1
Textiles & Apparel
980
185
19
Jewelry & Watches
554
30
5
Consumer durables
415
43
10
Pharmaceuticals
364
10
3
Home Solutions
351
32
9
Books, Music & Gifts
115
15
13
Others
1159
111
10
10360
476
5
Total
FDI in Indian retailing

FDI in Retail
not permitted
Current Indian FDI Regime
 FDI not permitted in retail trade sector,
except in:
 Private labels
 Hi-Tech
items / items requiring
specialized after sales service
 Medical and diagnostic items
 Items sourced from the Indian small
sector (manufactured with technology
provided by the foreign collaborator)
 For 2 year test marketing (simultaneous
commencement of investment in
manufacturing facility required)
FDI in Indian retailing
Current FDI

Metro Group of Germany
 Cash-and-carry wholesale trading
 Proposal faced strong opposition

Entities established prior to 1997
 Allowed to continue with their existing
foreign equity components.
 No FDI restrictions in the retail sector pre1997
 Foodworld
 51:49 JV between RPG and Dairy Farm
International,
 Leading food retailer in India now
 Mc Donalds
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Hypermarket
The chain of retail
stores of the
Pantaloon Retail
(India) Ltd.
89 outlets in India
Headquarter in
Mumbai
Focusing on Value
of Money
COMPANY PROFILE
•
Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one
of India’s leading business houses with multiple businesses spanning
across the consumption space. While retail forms the core business activity
of Future Group, group subsidiaries are present in consumer finance,
capital, insurance, leisure and entertainment, brand development, retail real
estate development, retail media and logistics.
•
Led by its flagship enterprise, Pantaloon Retail, the group operates over 12
million square feet of retail space in 71 cities and towns and 65 rural
locations across India. Headquartered in Mumbai (Bombay), Pantaloon
Retail employs around 30,000 people and is listed on the Indian stock
exchanges. The company follows a multi-format retail strategy that captures
almost the entire consumption basket of Indian customers. In the lifestyle
segment, the group operates Pantaloons, a fashion retail chain and Central,
a chain of seamless malls. In the value segment, its marquee brand, Big
Bazaar is a hypermarket format that combines the look, touch and feel of
Indian bazaars with the choice and convenience of modern retail.
•
In 2008, Big Bazaar opened its 100th store, marking the fastest ever
organic expansion of a hypermarket. The first set of Big Bazaar stores
opened in 2001 in Kolkata, Hyderabad and Bangalore.
•
The group’s speciality retail formats include, books and music chain,
Depot, sportswear retailer, Planet Sports, electronics retailer, eZone,
home improvement chain, Home Town and rural retail chain, Aadhaar,
among others. It also operates popular shopping portal.
•
Future Capital Holdings, the group’s financial arm provides investment
advisory to assets worth over $1 billion that are being invested in
consumer brands and companies, real estate, hotels and logistics. It
also operates a consumer finance arm with branches in 150 locations.
Customer Segment
• Big Bazaar target to upper middle class
and higher customers.
• The large and growing young working
population is a preferred customer
segment.
• Big Bazaar specially target working
women and home maker who are the
primary decision maker.
Mission & Vision
• Future Group shall deliver Everything,
everywhere, every time for every Indian
Consumer in the most profitable manner.
• We share the vision and belief that our
customers and stakeholders shall be served
only by creating and executing future
scenarios in the consumption space leading
to economic development
SWOT ANALYSIS
• STRENGTHS
•
•
•
•
•
EVERY DAY LOW PRICING
GOOD INFRASTRUCTURE
CONSUMER PREFERENCES
DIVERSE MARKET COVERAGE
AWRENESS ABOUT THE BRAND HIGH AMONG
MASSES
• OPPORTUNITIES
•
•
•
•
SUB URBAN UNTAPPED MARKET
“ONE STOP” CONCEPT UNKNOWN YET
EVOLVING CONSUMER ORIENTATION
CO BRANDING AND FRANCHISING FOR
FASTER GROWTH
SWOT ANALYSIS
• WEAKNESS
• LOW PERCEPTION AMONG CONSUMERS
• LESS AVAILABILITY OF STORES
• SUPPLY CHAIN BOTTLENECKS(FRAGMENTED MARKETS)
• THREATS
• NEW ENTRANTS AND FOREIGN PLAYERS
• UNORGANISED RETAIL MARKET
5 FORCES PORTER MODEL
• RIVALRY AMONG COMPETITORS
• RELIANCE,MORE,VISHAL,NEXT,SPENCERS
• NEW ENTRANTS
• WALMART,CARREFOUR,METRO,IKEA
• FOREIGN PLAYERS ALLOWED TO SOME
EXTENT
• BARGAINING POWER OF SUPPLIERS
• SUPPLIERS HAVE A HUGE UNORGANISED
SECTOR TO CATER TO
Contd…
• BARGAINING POWER OF
CONSUMERS
• PRICE SENSITIVE CONSUMERS
• MORE AVAILABLE CHOICES
• THREAT OF SUBSITUTES
• UNORGANIZED RETAIL
BCG MATRIX
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MARKETING
‘7 P’s ANALYSIS
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PRICING
§Value Pricing (EDLP)
§ Promotional Pricing
• Low Interest Pricing
• Psychological Pricing
• Special Event Pricing (Republic Day)
§ Differentiated Pricing
• Time Pricing
§ Bundling
PRICING COMPARISION
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TIME PRICING
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LOW INTEREST FINANCING
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PSYCHOLOGICAL PRICING
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PROMOTION
•“SAAL KE SABSE SASTE 3 DIN”
• FUTURE CARD (Discount Upto 3%)
• SHAKTI CARD
• JUNK SWAP OFFER
• BRAND AMBASSADOR: M.S. DHONI
• ADVERTISMENT (Print Ads, T.V., Radio)
• POINT OF PURCHASE PROMOTION
• GIFT TO EVEY 100th CUSTOMER (Seasonal
BANNERS AND POSTERS
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PEOPLE
• People Are The Customers Which Are The
Biggest Asset Of A Company.
• Well Trained Staff.
• Appearance.
• Presently Around 10000 Workers Are Working
And Around 500 Workers Are Recruited Every
Month.
• High Security For Safety Of Customers.
Problems ahead
Reduction in consumer spending
Slow construction of malls
Difficulty in raising working
capital
High rentals
Lowering margins
New emerging competitors
THANK YOU