India Retail Sector Analysis (2006-2007)

SUMMARY

Indian retailing industry has seen phenomenal growth in the last five years (2001-2006). Organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly to the growth of Indian retail sector. RNCOS’ “India Retail Sector Analysis (2006-2007)” report helps clients to analyze the opportunities and factors critical to the success of retail industry in India.

Key Findings

• Organized retail will form 10% of total retailing by the end of this decade (2010).
• From 2006 to 2010, the organized sector will grow at the CAGR of around 49.53% per annum.
• Cultural and regional differences in India are the biggest challenges in front of retailers. This factor deters the retailers in India from adopting a single retail format.
• Hypermarket is emerging as the most favorable format for the time being in India.
• The arrival of multinationals will further push the growth of hypermarket format, as it is the best way to compete with unorganized retailing in India.

Key Issues and Facts Analyzed

The research report also addresses the issues and the facts that are critical to the success of Indian retail industry in general & organized retail industry in particular.

Evaluation of current market trends. Profile discussion of key players in this sector. Analysis of various challenges and opportunities before the industry.

Key Highlights of the Report

• What is the market size and scope of the Organized Retail in India?
• What and where are the growth prospects and issues related to the industry?
• What are the factors driving growth in this sector?
• Size of organized market segment wise and its growth prospects.
• Who are the major players in Indian Retail Industry, their presence and strategies being used by them and their market positioning?
• What are the opportunities & challenges in front of the retailers in India and emerging trends there?

Key Players Analyzed

This section covers the key players currently operating in the Indian retail industry including Future Group, Trent Ltd, RPG Enterprise, Vishal Retail Ltd, Shoppers Stop Ltd, Bata India Ltd, Provogue India Ltd, Videocon Appliances Ltd., I.T.C. Ltd, Godrej Agrovert Ltd, and DCM - Hariyali Kisaan Bazaar.

Research Methodology Used

Information Sources

Information has been sourced from namely, books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to access to more than 3000 paid databases.

Analysis Method

The analysis methods include the following: Ratio Analysis, Historical Trend Analysis, Linear Regression Analysis using software tools, Judgmental Forecasting and Cause and Effect Analysis.

TABLE OF CONTENTS

1. Analyst View

2. Research Overview

3. Industry Overview

• 3.1 Global Retail Sales
• 3.2 Global Retail Market
• 3.3 Emerging Retail Markets of the World
• 3.4 Comparison of Indian Retail Sector with Worldwide Retail Sector

4. Indian Retail Industry

• 4.1 Unorganized Retail Sector
• 4.2 Organized Retail Sector - Retail Formats
  • 4.2.1 Specialty Stores
  • 4.2.2 Super Markets
  • 4.2.3 Franchisee Outlets
  • 4.2.4 Hypermarket & Convenience Stores - A Critical Evaluation
  • 4.2.5 Shopping Malls - Key to Organized Retail Growth in India
• 4.3 Organized Retail Sector - Product Segments
  • 4.3.1 Organized Retail Sector - Key Facts
  • 4.3.2 Food & Beverages
  • 4.3.3 Apparel & Footwear
  • 4.3.4 Consumer Durables
  • 4.3.5 Health & Body Care Product Segments
  • 4.3.6 Penetration Level of Organized Retail - By Product
• 4.4 Rural Retail
  • 4.4.1 Product Penetration
    • 4.4.1.1 Shampoos
    • 4.4.1.2 Skin Care Products
    • 4.4.1.3 Food & Beverages
    • 4.4.1.4 Household & Consumer Durables
• 4.5 Retail - Advertising & Marketing

5. Industry Analysis

• 5.1 Consumer Behavior
  • 5.1.1 Rural Consumer
    • 5.1.1.1 Consumer Behavior - Low Income Group
  • 5.1.2 Urban Consumer
• 5.2 Drivers
  • 5.2.1 Low Rental Space
  • 5.2.2 Growing Consumer Class
  • 5.2.3 Disposable Income
  • 5.2.4 Growing Economy
  • 5.2.5 Increasing Wage Level
• 5.3 Opportunities
  • 5.3.1 Growing Consumer Class in Urban India
  • 5.3.2 Third Party Manufacturing
  • 5.3.3 Packaged Food/Agricultural Products
  • 5.3.4 Introduction of Private Labels
  • 5.3.5 Mergers & Acquisitions
  • 5.3.6 New Specialty Retail Formats
  • 5.3.7 Growing Urbanization
• 5.4 Challenges
  • 5.4.1 Differences between Urban & Rural Consumers
  • 5.4.2 Fragmented Market
  • 5.4.3 Managing Channel Conflicts
  • 5.4.4 Fraud in Retail is Expensive
  • 5.4.5 Improvement in Infrastructure & Logistics Needed
  • 5.4.6 Store Location
  • 5.4.7 Merchandise
• 5.5 Future Outlook, 2010
  • 5.5.1 Emerging Trends

6. Mergers & Acquisitions

7. Competitive Landscape

• 7.1 Major Players
  • 7.1.1 Future Group
  • 7.1.2 Trent Ltd.
  • 7.1.3 RPG Enterprise
  • 7.1.4 Vishal Retail Ltd.
  • 7.1.5 Shoppers Stop Ltd.
  • 7.1.6 Bata India Ltd.
  • 7.1.7 Provogue India Ltd.
  • 7.1.8 Videocon Appliances Ltd.
  • 7.1.9 I.T.C. Ltd.
  • 7.1.10 DCM - Hariyali Kisaan Bazaar
  • 7.1.11 Godrej Agrovet Ltd.
• 7.2 Competitor Analysis
  • 7.2.1 Comparison of Business Strategy of Major Retailers
    • 7.2.1.1 Emerging Strategic Outlook

8. Annexure I: Government Initiatives and Regulations

• 8.1 FDI in Retail
• 8.2 Taxes
  • 8.2.1 Direct Taxes
  • 8.2.2 Indirect Taxes

List of Figures:

• Figure 3-1: Worldwide - Retail Sales (in Trillion US$), 2001-2006E
• Figure 3-2: Worldwide - Retail Sales by Geographical Region (in Trillion US$), 2006E
• Figure 3-3: Worldwide - Comparative Penetration of Organized Retail (%), 2006
• Figure 4-1: India - Market Value of Organized & Unorganized Retailing (in Billion US$), 2006
• Figure 4-2: India - Rural & Urban Retail Market (in Billion US$), 2006
• Figure 4-3: India - Retail by Segment (%), 2006
• Figure 4-4: India - Fastest Growing Retail Formats (%), 2006
• Figure 4-5: India - Number of Shopping Malls (Operational + Under Construction), 2005 & 2007E
• Figure 4-6: India - Area Covered by Shopping Malls (in Million Sq. ft.), 2001-2005
• Figure 4-7: India - Numbers of Shopping Malls in Major Cities, 2007E
• Figure 4-8: India - Shopping Malls Establishment by Region (%), 2007E
• Figure 4-9: India - Space Distribution of Shopping Malls by State (%), 2007E
• Figure 4-10: India - Organized Retail Sales Breakup by Product (%), 2005
• Figure 4-11: India - Forecast for Retail Food Industry (in Billion US$), 2007-2010
• Figure 4-12: India - Food Retail Industry Segmentation by Retail Format (%), 2005
• Figure 4-13: India - Forecast for Food, Beverages & Tobacco Sales (in Billion US$), 2007-2011
• Figure 4-14: India - Forecast for Apparel Industry (in Billion US$), 2007-2010
• Figure 4-15: India - Forecast for Footwear & Leather Industry (in Billion US$), 2007-2010
• Figure 4-16: India - Footwear Industry Segmentation (%), 2006
• Figure 4-17: India - Share of Branded & Non-Branded Footwear Industry (%), 2006
• Figure 4-18: India - Share of Organized & Un-Organized Footwear Manufacturing (%), 2006
• Figure 4-19: India - Share in Global Leather & Non-Leather Footwear Industry (%), 2006
• Figure 4-20: India - Refrigerator & Television Sales by Volume (in Million), 2001-2006
• Figure 4-21: India - Ownership Share of Consumer Durables (%), 2006
• Figure 4-22: India - Penetration Level of Organized Retail by Product (%), 2006
• Figure 4-23: India - Forecast for Per Capita Income in Rural Region (in Rs.), 2006-2012
• Figure 4-24: India - Number of Households in Rural Region (in Million), 2001-2009F
• Figure 4-25: India - Penetration Level of Shampoo Retailing in Rural Region (%), 2000 & 2005
• Figure 4-26: India - Retail Marketing & Advertising Attractiveness Index
• Figure 4-27: India - Key Retail Marketing Concern
• Figure 5-1: Rentals Rate Comparison (in US$/ Sq. ft.), 2005
• Figure 5-2: India - Growing Consumer Class & Number of Household (in Million), 1995-98, 2001-02 & 2006-07
• Figure 5-3: India - Disposable Income (in Billion US$), 2001-2006
• Figure 5-4: India - GDP Growth Rate (%), 2003-2006E
• Figure 5-5: India - Change in Nominal Wages (%), 2001-2006
• Figure 5-6: India - Urban Consumer Population (in Million), 2006-07 & 2009-10E
• Figure 5-7: India - Degree of Challenges to be Faced in Retail Industry
• Figure 5-8: India - Forecast for Retail Market (in Billion US$), 2007-2015
• Figure 5-9: India - Forecast for Retail Industry Segmentation (in Billion US$), 2010 & 2015
• Figure 5-10: India - Forecast for Organized Retail Industry (in Billion US$), 2007-2010

List of Tables:

• Table 3-1: Worldwide - Top 10 Retailers by Net Sales (in Billion US$), 2005
• Table 3-2: Worldwide - Top 10 Emerging Retail Markets, 2006
• Table 4-1: India - Urban Retail Market Split (%), 2006
• Table 4-2: India - Major Formats of In-Store Retailing
• Table 4-3: India - Retail Formats Adopted by Key Players
• Table 4-4: India - Major Specialty Store Players by Brand, 2006
• Table 4-5: India - Major Supermarket Players by Brand, No. of Stores & Sales, 2005
• Table 4-6: India - Comparison of Hypermarkets with Convenience Stores
• Table 4-7: India - Major Product Categories in Organized Retail Sales, 2006
• Table 4-8: India - Health & Body Care Products Market Value (in Million US$), 2005-2008E
• Table 6-1: India - Major M&A/JV & Alliances in Retail Industry (2005 & 2006)
• Table 7-1: Future Group - Income Statement (in Rs. Lakh), 2006
• Table 7-2: Trent Ltd. - Income Statement (in Million Rs.), 2005 & 2006
• Table 7-3: Shoppers Stop Ltd. - Income Statement (in Million Rs.), 2005 & 2006
• Table 7-4: Bata India Ltd. - Income Statement (in Million Rs.), 2005 & 2006
• Table 7-5: Provogue India Ltd. - Income Statement (in Million Rs), 2005 & 2006
• Table 7-6: Videocon Appliances Ltd. - Income Statement (in Million Rs.), 2005 & 2006
• Table 7-7: I.T.C. Ltd. - Key Financials (in Rs. Crore), 2005-06
• Table 7-8: India - Retailers & Future Plans