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