Retail Revolution in India & Retail Revolution in India & its impact in the Middle Eastits impact in the Middle East

Presented by:

Mr. B. S. NageshCustomer Care Associate & MD

India Retail Report 2005 – HighlightsImages Retail Study 2006 (collation from various data sources)

Share of Organized Retail

2%

USD 198 Bn

Consumption ExpenditureUSD 310 Bn

The Entire Retail Sector

Organized Retail Sector

USD 3.96 Bn

3.4%

USD 226 Bn

The Entire Retail Sector

Organized Retail Sector

USD 7.68 Bn

Share of Organized Retail

2001 2005

14%

Consumption ExpenditureUSD 410 Bn

32%

93%

Organized Retail - 2010

2005 2010

USD 7.68 Bn USD 31 Bn

Organized Retail

304%

Organized Retail

Share of Organized Retail

3.4% 10%

Share of Organized Retail

Rising Consumer IncomeKey Driver

The very rich

The consuming class

The Climbers

The aspirants

The destitute

1995 -96 2001 - 02 2006 - 07

1.2 (7)

32.5 (186)

44.0 (253.9)

54.1 (312.2)

33.0 (190.4)

2.6 (15)

46.4 (265)

74.4 (429)

33.1 (192)

24.1 (140)

5.2 (30)

75.5 (432)

81.7 (472)

20.2 (117)

16.5 (95)

4.0 (23)

40.8 (230)

13.7 (77)

0.7 (4)

0.9 (5)

1.9 (11)

26.5 (150)

17.4 (98)

3.9 (22)

2.6 (16)

7.1 (40)

5.3 (30)

0.8 (5)

16.6 (93)

16.8 (94)

URBAN

Figures in Mn: Households (Population) Source: BW Marketing Whitebook 2003-04

Future Outlook of the Organized Retail Market(Images Retail Study 2006)• The next 3 years will see

– US $560m investment for retail expansion nationwide.

– Result in 50 Hyper Markets.– 305 large Department Stores.– 1500 Super Markets.– 10,000 exclusive retail showrooms– One third through conversion from multi-

brand to exclusive outlets.

• Largest growth in the field of entertainment with or without shopping.

• Volumes in Food & Grocery, Office & Home Utilities.

• Organized and traditional formats will co-exist.

Gold & Jewellery market in India(Source: India Retail Report, 2005)

• Jewellery market, the largest market in the world is estimated at US$ 9.7 bn.

• Gold contributes 98% of the above (approx. US$ 9.5 bn).

• 65% of jewellery bought during weddings with 5 – 6 mn weddings happening in the country every year.

• Organized jewellery retailing is at 2% of the total market.

Branded Jewellery market in India(Source: India Retail Report, 2005)

• Branding of Jewellery commenced in 1996 with Tanishq.

• Branded jewellery retailing stands at US$ 0.26 bn and is growing at 40% p.a.

• Other major players are Nakshatra, Orra, Oyzterbay, Gili, Asmi, Carbon, D’Damas.

• Brands sold at stand alone specialty stores and department stores.

• Huge potential as 98% of market is still unorganized.

Branded Jewellery market in India(Source: India Retail Report, 2005)

• Key to the success of branded jewellery

– Huge footfalls in modern formats due department stores being destination stores.

– Comfortable & attractive shopping experience.

– Reliability & quality from the perspective of the customer.

– Brand exclusivity & wide range of designs.– Malls are the preferred choice– Recent phenomenon is the launch of

Specialty Jewellery, Gold Souk, near Delhi.

Jewellery Sales by Shoppers’ Stop

Indian Retail & Impact in the Middle East

• India is still the largest gold consuming country in the world.

• Consumers are gradually shifting towards branded jewellery but Gold continues to remain high on the consumers’ fascination.

• A shift in preference to Department Stores and specialty stores for purchases.

• With organized retail in India growing at 30% per annum, the trend towards purchase of Gold & Jewellery by Indians is shifting to Malls & Specialty stores in India.

Impact on the Middle East

• Outbound tourism impact– Will continue to attract tourists from India as

Middle East Gold (retailer) more trusted than Indian Gold (retailer).

– With Modern retail evolving at a fast pace in Middle East, will attract more Indian tourists for shopping.

• Indian retail would be fully evolved in the next 5 yrs, products likely to be cheaper in India by way of local sourcing & tax reforms.

• Many Middle East retailers being of Indian origin, a lot of Middle East business houses would enter India.

• A reverse drain of people from Middle East to India expected, Middle East will feel the heat of manpower shortage & cost escalation.

Conclusion

• Emerging India to boost Middle East retail for the next 5 years.

• The same emerging India to take away a share from Middle East in the next 5 to 10 years.

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