Big bazaar: SCM
- 1. PRESENTATION ON BIG BAZAAR Presentation by -Gurdeep Singh -Pushpak Pandey -Shaleen Agarwal -Rohan Tandon -Richa Kohli
- 2. Agenda Retailing : An overview Indian retail The change factor FDI in Indian retailing Big Bazaar- Company Profile - CustomerSegment - Vision and Mission - Swot analysis - BCG Matrix - Porter5 Forces Model Why FDI ? How FDI ?
- 3. 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 Retailing: An overview
- 4. Weekly Markets Village Fairs Melas Convenience Stores Mom and Pop/Kiranas Khadi Stores Cooperatives Exclusive Brand Outlets Hyper/SuperMarkets Department Stores Shopping Malls Traditional/Pervasive Reach Government Supported Historic/Rural Reach Modern Formats/ International Evolution of Indian retail Source of Entertainment Neighborhood Stores/Convenience Availability/Low Costs /Distribution Shopping Experience/Efficiency
- 5. Informal retailing Sector Typically small retailers. Evasion of taxes Difficulty in enforcing tax collection mechanisms No monitoring of laborlaws Formal Retailing Sector Typically large retailers Greaterenforcement of taxation mechanisms High level of laborusage monitoring Indian retail Evolution of Indian retail
- 6. 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 Indian retail Categories of Indian retail
- 7. Modern Format retailers Supermarkets (Foodworld) Hypermarkets (Big Bazaar) Department Stores (S Stop) Specialty Chains (Ikea) Company Owned Company Operated Traditional Format Retailers Kiranas: Traditional Momand Pop Stores Kiosks Street Markets Exclusive /Multiple Brand Outlets Indian retail Classifying Indian retail
- 8. Hypermarket Big Bazaar Giants Shoprite Star Department store Lifestyle Pantaloons Piramyds Shoppers Stop Trent Entertainment Fame Adlabs Fun Republic Inox PVR Indian retailers Large Indian retailers
- 9. Greaterpercapita 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 overlast decade Affordability growth Falling interest rates Easierconsumercredit Greatervariety and quality at all price points Indian consumer The changing Indian consumer †FromEuromonitorRetail Survey
- 10. The urban consumer Getting exposed to international lifestyles Inclined to acquiring asset More discerning and demanding than ever No longerneed-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. Greaterlevels of education Indian consumer The changing Indian consumer *DatafromNCAER
- 11. 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% for2003-2008 Sales from large format stores would rise by 24-49%* * Formal and modern format retailing would enjoy rapid growth Anticipated growth Anticipated growth
- 12. Low domestic competition Because of fragmented nature of industry Lackof exposure to global best practices Low entry barriers forunorganized 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
- 13. Real Estate Costs Supply Chain Inconsistency PoorInfrastructure Lackof Skilled Manpower issues Industry dynamics
- 14. Growth determining factors Government Policy Infrastructure development GDPgrowth Employment generation and job creation In several new sunrise industries Implies greaterpurchasing power Growth factors Growth factors
- 15. India ranked 1st in the Global A.T Kearney Retail Development Index India Russia China Advantage India The Indian advantage
- 16. THE SIZE OF THE OPPORTUNITYTHE 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 Total 10360 476 5
- 17. Current Indian FDI Regime FDI not permitted in retail trade sector, except in: Private labels Hi-Tech items / items requiring specialized aftersales service Medical and diagnostic items Items sourced from the Indian small sector (manufactured with technology provided by the foreign collaborator) For2 yeartest marketing (simultaneous commencement of investment in manufacturing facility required) FDI in Retail not permitted FDI in Indian retailing
- 18. Metro Group of Germany Cash-and-carry wholesale trading Proposal faced strong opposition Entities established priorto 1997 Allowed to continue with their existing foreign equity components. No FDI restrictions in the retail sector pre- 1997 Foodworld 51:49 JV between RPG and Dairy Farm International, Leading food retailerin India now Mc Donalds Current FDI FDI in Indian retailing
- 20. QuickTime™ and a decompressor are needed to see this picture. Hypermarket The chain of retail stores of the Pantaloon Retail (India) Ltd. 89 outlets in India Headquarter in Mumbai Focusing on Value of Money
- 21. 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.
- 22. • 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.
- 23. 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.
- 24. • Future Group shall deliver Everything,Future Group shall deliver Everything, everywhere, every time for every Indianeverywhere, every time for every Indian Consumer in the most profitable manner.Consumer in the most profitable manner. • We share the vision and belief that ourWe share the vision and belief that our customers and stakeholders shall be servedcustomers and stakeholders shall be served only by creating and executing futureonly by creating and executing future scenarios in the consumption space leadingscenarios in the consumption space leading to economic developmentto economic development Mission & VisionMission & Vision
- 25. 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
- 26. 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
- 27. 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
- 28. Contd… • BARGAINING POWER OF CONSUMERS • PRICE SENSITIVE CONSUMERS • MORE AVAILABLE CHOICES • THREAT OF SUBSITUTES • UNORGANIZED RETAIL
- 29. BCG MATRIX QuickTime™ and a decompressor are needed to see this picture.
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- 32. PRICING §Value Pricing (EDLP) § Promotional Pricing • Low Interest Pricing • Psychological Pricing • Special Event Pricing (Republic Day) § Differentiated Pricing • Time Pricing § Bundling
- 33. QuickTime™ and a decompressor are needed to see this picture. PRICING COMPARISION
- 34. QuickTime™ and a decompressor are needed to see this picture. TIME PRICING QuickTime™ and a decompressor are needed to see this picture.
- 35. QuickTime™ and a decompressor are needed to see this picture. QuickTime™ and a decompressor are needed to see this picture. LOW INTEREST FINANCING PSYCHOLOGICAL PRICING
- 36. 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 (Seasona QuickTime™ and a decompressor are needed to see this picture.
- 37. QuickTime™ and a decompressor are needed to see this picture. BANNERS AND POSTERS QuickTime™ and a decompressor are needed to see this picture.
- 38. 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.
- 39. Problems ahead Reduction in consumer spending Slow construction of malls Difficulty in raising working capital High rentals Lowering margins New emerging competitors
- 40. THANK YOU