PRESENTATION ON BIG BAZAAR Presentation by -Gurdeep Singh -Pushpak Pandey -Shaleen Agarwal -Rohan Tandon -Richa Kohli
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
Big Bazaar- Company Profile - Customer Segment - Vision and Mission - Swot analysis - BCG Matrix - Porter 5 Forces Model
Why FDI ?
How FDI ?
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
Weekly MarketsVillage FairsMelas
Convenience StoresMom and Pop/Kiranas
Khadi StoresCooperatives
Exclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping Malls
Traditional/Pervasive Reach
Government Supported
Historic/Rural Reach
Modern Formats/ International
Evolution of Indian retail
Source of Entertainmen
t
Neighborhood Stores/Convenie
nce
Availability/ Low Costs / Distribution
Shopping Experience/Efficie
ncy
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
Evolution of 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
Indian retail
Categories of 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
Classifying Indian retail
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
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
Indian consumer
The changing Indian consumer
†From Euromonitor Retail Survey
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 age100 mn 17-21 year olds*. Tend to spend freely.
Greater levels of education
Indian consumer
The changing Indian consumer
*Data from NCAER
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
Anticipated growth
Anticipated growth
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
Real Estate Costs
Supply Chain Inconsistency
Poor Infrastructure
Lack of Skilled Manpower
issues
Industry dynamics
Growth determining factors Government Policy Infrastructure development GDP growth Employment generation and job
creationIn several new sunrise industriesImplies greater purchasing power
Growth factors
Growth factors
India ranked 1st in the Global A.T Kearney Retail Development Index
India
Russia
China
Advantage India
The Indian advantage
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
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 Retail not
permitted
FDI in Indian retailing
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 pre-1997 Foodworld
51:49 JV between RPG and Dairy Farm International, Leading food retailer in India now
Mc Donalds
Current FDI
FDI in Indian retailing
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HypermarketThe chain of retailstores of thePantaloon Retail(India) Ltd.89 outlets in IndiaHeadquarter inMumbaiFocusing on Valueof 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.
• Future Group shall deliver Everything, Future Group shall deliver Everything, everywhere, every time for every Indian everywhere, every time for every Indian Consumer in the most profitable manner.Consumer in the most profitable manner.
• We share the vision and belief that our We share the vision and belief that our customers and stakeholders shall be served customers and stakeholders shall be served only by creating and executing future only by creating and executing future scenarios in the consumption space leading scenarios in the consumption space leading to economic development to economic development
Mission & VisionMission & Vision
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
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PRICING COMPARISION
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TIME PRICING
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LOW INTEREST FINANCING PSYCHOLOGICAL PRICING
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)
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BANNERS AND POSTERS
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PEOPLE• People Are The Customers Which Are TheBiggest Asset Of A Company.• Well Trained Staff.• Appearance.• Presently Around 10000 Workers Are WorkingAnd Around 500 Workers Are Recruited EveryMonth.• High Security For Safety Of Customers.
Problems ahead
Reduction in consumer spendingSlow construction of mallsDifficulty in raising working capitalHigh rentalsLowering marginsNew emerging competitors
THANK YOU