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RETAILING IN INDIA

Euromonitor International July 2013

RETAILING IN INDIA

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LIST OF CONTENTS AND TABLES


Executive Summary ..................................................................................................................... 1 Increased Per Capita Expenditure Drives Performance ........................................................... 1 Industry Witnesses A Marked Rise in Internet Retailing ........................................................... 1 FDI Approval Makes Future Look Promising ............................................................................ 1 Domestic Players Maintain Their Lead ..................................................................................... 1 Private Label Makes An Impact on Non-grocery Retailing........................................................ 1 Key Trends and Developments .................................................................................................... 2 Increasing Per Capita Expenditure Encourages Growth ........................................................... 2 Internet Retailing Indias Next Big Retail Channel ................................................................. 3 FDI Approval A Big Step Towards Liberalisation ................................................................... 5 Private Label Expands Across Both Grocery and Non-grocery Retailing ................................. 6 Greater Debit and Credit Card Penetration Encourages Consumers To Spend ....................... 9 the Focus on Tier 2 and Tier 3 Cities Continues ..................................................................... 12 Market Indicators ........................................................................................................................ 13 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24 Table 25 Table 26 Table 27 Table 28 Employment in Retailing 2007-2012........................................................... 13 Sales in Retailing by Channel: Value 2007-2012 ....................................... 14 Sales in Retailing by Channel: % Value Growth 2007-2012....................... 14 Sales in Store-Based Retailing by Channel: Value 2007-2012 .................. 14 Store-Based Retailing Outlets by Channel: Units 2007-2012 ..................... 14 Sales in Store-Based Retailing by Channel: % Value Growth 20072012 ........................................................................................................... 15 Store-Based Retailing Outlets by Channel: % Unit Growth 2007-2012 ...... 15 Sales in Non-store Retailing by Channel: Value 2007-2012....................... 15 Sales in Non-store Retailing by Channel: % Value Growth 2007-2012 ...... 15 Sales in Retailing by Grocery vs Non-Grocery: 2007-2012 ........................ 16 Sales in Non-Grocery Retailers by Channel: Value 2007-2012 .................. 16 Non-Grocery Retailers Outlets by Channel: Units 2007-2012 .................... 16 Sales in Non-Grocery Retailers by Channel: % Value Growth 20072012 ........................................................................................................... 17 Non-Grocery Retailers Outlets by Channel: % Unit Growth 2007-2012 ..... 17 Retailing Company Shares: % Value 2008-2012 ....................................... 17 Retailing Brand Shares: % Value 2009-2012 ............................................. 18 Store-Based Retailing Company Shares: % Value 2008-2012 .................. 18 Store-Based Retailing Brand Shares: % Value 2009-2012 ........................ 19 Store-Based Retailing Brand Shares: Outlets 2009-2012 .......................... 19 Non-store Retailing Company Shares: % Value 2008-2012....................... 20 Non-store Retailing Brand Shares: % Value 2009-2012 ............................ 20 Non-Grocery Retailers Company Shares: % Value 2008-2012.................. 21 Non-Grocery Retailers Brand Shares: % Value 2009-2012 ....................... 21 Non-Grocery Retailers Brand Shares: Outlets 2009-2012 ......................... 22 Forecast Sales in Retailing by Channel: Value 2012-2017 ........................ 23 Forecast Sales in Retailing by Channel: % Value Growth 2012-2017 ........ 23 Forecast Sales in Store-Based Retailing by Channel: Value 20122017 ........................................................................................................... 23 Forecast Store-Based Retailing Outlets by Channel: Units 2012-2017 ...... 23 Market Data ................................................................................................................................ 14

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Table 29 Table 30 Table 31 Table 32 Table 33 Table 34 Table 35 Table 36

Forecast Sales in Store-Based Retailing by Channel: % Value Growth 2012-2017 .................................................................................................. 24 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 2012-2017 .................................................................................................. 24 Forecast Sales in Non-store Retailing by Channel: Value 2012-2017 ........ 24 Forecast Sales in Non-store Retailing by Channel: % Value Growth 2012-2017 .................................................................................................. 24 Forecast Sales in Non-Grocery Retailers by Channel: Value 20122017 ........................................................................................................... 25 Forecast Non-Grocery Retailers Outlets by Channel: Units 2012-2017 ..... 25 Forecast Sales in Non-Grocery Retailers by Channel: % Value Growth 2012-2017 ..................................................................................... 26 Forecast Non-Grocery Retailers Outlets by Channel: % Unit Growth 2012-2017 .................................................................................................. 26

Appendix .................................................................................................................................... 26 Operating Environment ........................................................................................................... 26 Cash and Carry....................................................................................................................... 29 Table 37 Cash and Carry: Number of Outlets by National Brand Owner: 20092012 ........................................................................................................... 30

Definitions................................................................................................................................... 30 Sources ...................................................................................................................................... 31 Summary 1 Research Sources ...................................................................................... 31

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RETAILING IN INDIA
EXECUTIVE SUMMARY Increased Per Capita Expenditure Drives Performance
Indias growing economy provided a further boost to the annual disposable income of consumers, encouraging them to increase spending throughout 2012. The end of the review period also witnessed consumers starting to spend more on products other than necessities both in grocery and non-grocery retailing. Awareness regarding brands and the comfort of using credit and debit cards in modern grocery retailing further fuelled the increased expenditure in retailing.

Industry Witnesses A Marked Rise in Internet Retailing


2012 witnessed strong growth in internet retailing due to a surge in use of computers and internet penetration across the country. Trust also grew in the internet as a retailing channel, and television advertising campaigns throughout the year also helped maximise awareness. Value sales through this channel were primarily driven by apparel, footwear, personal accessories and eyewear, media products, books, as well as beauty and personal care products. Consumers still visited stores to get the touch and feel of the product, but increasingly used the internet to get the cheapest deal.

FDI Approval Makes Future Look Promising


After much discussion, the Indian government approved 51% of foreign direct investment (FDI) in multi brand retailing in the last quarter of 2012. This was followed by the decision to allow 100% FDI in single brand retailing. The decision of FDI approval was warmly met by urban consumers as the availability of brands such as Wal-Mart, Prada, and H&M in India was quite exciting for them. However, small grocery retailers, commonly known as kirana stores along with farmers, vehemently protested against the same as this will force out the small domestic players in the future. However, this decisions complete effect will be fully realised in 2013 due to its recent approval.

Domestic Players Maintain Their Lead


With foreign direct investment being allowed only in 2012, the review year did not witness a change of market leaders. Domestic players continued to dominate the market. Seven out of the 10 leading retailers of the country were domestic. However, these players still account for a small percentage of the market as more than 90% of total retailing was dominated by small independent retailers.

Private Label Makes An Impact on Non-grocery Retailing


Private label witnessed strong growth in 2012 especially in non-grocery retailing. This trend is expected to continue with retailers investing more in the packaging and quality of private label products. As India is a highly price-sensitive market, the forecast period will witness strong growth in private label both in grocery and non-grocery retailing, presenting strong competition to national brands.

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KEY TRENDS AND DEVELOPMENTS Increasing Per Capita Expenditure Encourages Growth
Indias economy is one of the fastest-growing economies globally. 2012 witnessed increased annual disposable income of 13% across India and also reached almost 15% in major cities such as Delhi and Chennai. Per capita expenditure on a national level witnessed growth of 12% in 2011-2012. Current impact Higher per capita spending meant that 2012 was a good year for retailing. Retailing overall witnessed growth of 15% in 2012. This growth was higher than the total review period CAGR of 13% for 2007-2012. Consumers in 2012 also enjoyed greater bargaining power. As increased per capita expenditure increased demand in retailing more than supply, the competition among the retailers was high and the consumers had the higher bargaining power. Consumers spent more in hypermarkets, apparel specialist retailers, electronics and appliance specialist retailers and health and beauty specialist retailers which enjoyed very strong growths at 20%, 21%, 17% and 8% respectively. With greater spending power and a willingness to spend, modern grocery retailers concentrated on western grocery items for example in fresh foods, vegetables such as lettuce and zucchini. Consumers became more adventurous and demanded different flavours and cuisines which resulted in manufacturers stocking international items on shelves of supermarkets and hypermarkets. In packaged food, grocery retailers increased the shelf space for items such as peanut butter, salad dressings, fruit yoghurts and more. Non-grocery retailers concentrated international brands, better discounts, larger selling space and improvement of the overall shopping experience at the retail outlets. Outlook The outlook for the Indian economy in the forecast period is strong. GDP will witness a slow and gradual increase, recording 7-8% annual growth on average from 2013- 2017. The increasing GDP growth rate will help to boost consumer sentiments, annual disposable income and expenditure. The unemployment rate is expected to decline over the forecast period in 2012-2017. Furthermore, as retailing is one of the leading contributors to GDP growth in India, employment in retailing is also expected to increase from 2.3% in 2012 to 2.8% in 2017. Future impact The growing economy in the forecast period will fuel the lifestyle that Indians, particularly urban consumers, witnessed in 2012 in terms of changes in eating habits such as eating out, increased consumption of packaged food in grocery retailing and increased awareness of international brands in non-grocery retailing. Stronger consumer confidence will drive growth particularly amongst modern grocery retailers, particularly supermarkets and hypermarkets. Companies such as Tata with its Star Bazaar, Reliance with Reliance Mart and Reliance Fresh, Aditya Birla with More and More Mega among others will expand the number of outlets and product portfolio keeping in mind the growing demand and annual disposable expenditure. Retailers in the forecast period will continue to build larger format stores as it helps to increase the footfall in outlets. Non-grocery retailers will increase the number of international brands stored, improve the look and feel of the outlets and offer higher discounts in order to compete with the growing internet retailing and direct selling retail channels. This will be most

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visible among apparel, electronics and appliance and beauty and personal care specialist retailers. Grocery retailing via the internet is expected to witness growth; however, it will continue to remain small compared to store-based grocery retailing. This will be due to low internet penetration in rural areas of the country where the majority of the population live. Non-grocery retailers will face tough competition from internet retailing in the forecast period due to convenience and better prices offered by this channel. This will be strongly observed in urban areas for apparel, electronics and appliance, beauty and personal care, media, books, and consumer health specialist retailers.

Internet Retailing Indias Next Big Retail Channel


Internet retailing witnessed strong growth in 2012. It became one of the first points of contact between the retailer and the consumer. Apart from internet retailers, other non-store retailers and store-based retailers started concentrating on their internet portals in 2012. Consumer base in metropolitans and tier 2 cities preferred internet retailing as it provided them with a cheaper and convenient option for shopping. This was also driven by rise in increased internet users which grew by 24% in 2012. Current impact Internet retailing grew by 30% in 2012. Companies such as Flipkart, Myntra, Jabong and eBay aggressively marketed their brands through television commercials, print media and social networking websites. Store-based retailers and other non-store retailers also increased their focus on developing better websites as this was the first point of contact between the retailer and consumer in most cases. Several high-street retailers started online sites but did not allow shopping in 2012. However, the companies allowed consumers to browse the product portfolio and rate and comment on the products. Leading direct selling companies such as Herbalife, Amway, Oriflame, Avon and others provided extremely detailed product portfolio information on their websites and in some cases such as Amway and Oriflame even provided the price of the product. These direct sellers used their internet portals as a brochure for the consumer, where one can go through their website and get in touch with a distributor through the same website to purchase the product. Consumers started to develop trust in the channel due to the introduction of cash on delivery option. This helped the first time buyers to become loyal internet retailing consumers. Jabong by Rocket GmbH launched in 2012 and came with the option of paying by card on delivery in a few cities which was a huge success among most of the urban consumers. Consumers were driven towards this trend due to factors such as convenience, lower price points and the vast variety of brand options which helped the growth of internet retailing in 2012. This was most visible in non-grocery retailing such as apparel, electronics, appliances, beauty and personal care, consumer health, media and books. Consumers in 2012 started practicing show-rooming to get the best bargain on a product post the touch and feel experience at a store-based retailer. Among various websites which provided a comparison between pricing for products, Amazons Junglee.com was quite popular among consumers. Store-based retailers such as Future Values Big Bazaar, Infiniti Retails Croma, K Raheja Corps Shoppers Stop and more increased their focus on their internet retailing arms with www.futurebazaar.com, www.cromaretail.com and www.shoppersstop.com in order to increase sales and reach the consumer. The websites were among the pioneers who launched their internet retailing arm for shopping and product portfolio browsing at the same. These websites provide free shipping and packaging along with cash on delivery options.

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A large number of internet retailers underwent acquisitions and mergers in 2012 as the smaller players found it hard to survive against stronger players. Flipkart acquired letsbuy.com, whilst Zovi.com acquired Inkfruit.com, and Myntra.com acquired Exclusively.in. Pure e-commerce companies dominated the market in 2012 however store-based retailers will soon provide competition to these players. Outlook Internet retailing is expected to grow at a CAGR of 16% in the forecast period. It will witness a slow-down compared to the review period CAGR of 23% as the channel becomes more organised and less dynamic. Internet retailing in India recovered from 2007 with Flipkart becoming the first successful internet retailer. This is why the review period saw such fast growth. Technology will continue to drive retailing in the forecast period as a result of which all retailers in the forecast period will develop their internet portals and increase the amount of information availability. Homeshopping companies in 2012 already developed their websites massively with complete product portfolio; these companies will most likely combine internet retailing along with their homeshopping retail model in order to increase their sales. Internet retailing will also be driven by growing internet penetration in the country. The government of India is working towards the improvement of infrastructure required for computer usage and internet penetration in rural India. The number of personal computer users is expected to witness growth of 14.6% and the number of internet users is expected to grow by 13.4% in the forecast period. Increase in the growth rates will eventually lead to increase in the number of consumers who switch to the internet for shopping in the forecast period. Future impact Store-based retailers, both grocery and non-grocery retailers, will definitely invest in developing their internet retailing arm in addition to cease expansion of their outlets. These retailers will continue to focus on developing better and more informative websites of their retail outlets along with the option of shopping online rather than just browsing the product portfolio. The growth of the retail industry in the forecast period will be fuelled by the growth of internet retailing. In 2012, 49% of the total non-store-based retailing was internet retailing. In the forecast period, retailing is expected to grow at a CAGR of 8% and the highest growth rate for products such as toys and games, personal goods and eyewear, consumer health and tissue and hygiene are expected to be via internet retailing channel. Internet retailing will primarily affect urban retailing in the forecast period. The channel will take a minimum of 10-15 years to affect store-based retailing as in 2012, 99% of the total retailing was store-based. Non-grocery internet retailing of apparel, beauty and personal care, electronics and appliance, consumer health, personal accessories and eyewear will continue to maintain their leading position in the channel in the forecast period. Apparel, footwear, personal accessories and eyewear will particularly be the most crowded product categories for internet retailers as these products have minimum losses after the cost of packaging, free shipping and delivery is taken into account. Websites such as fashionara.com, fashionandyou.com, yepme.com, yebhi.com, myntra.com and jabong.com were already popular in 2012. Grocery retailers will not be affected by internet retailers in the short term however, in the long term, grocery retailing at least for packaged food and tissue and hygiene products will witness a shift towards internet retailing for the urban consumer base.

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FDI Approval A Big Step Towards Liberalisation


In 2012, after lengthy discussions regarding foreign direct investment in multi-brand retailing, the government finally allowed 51% FDI in multi-brand retailing, a significant move which drew both positive and negative responses from retailers and consumers alike. FDI in both single and multi-brand retailing was allowed with the condition that 30% of all sales should be sourced from domestic small and medium enterprises. Foreign direct investment witnessed growth of nearly 33% in terms of inflows in 2011-2012. The decision to allow 100% and 51% foreign direct investment in single and brand retailing will further help to boost retailing in India in the forecast period. Current impact The decision of 51% FDI in multi-brand retailing encouraged major multinational companies to enter India and to invest larger amounts in local operations. It allowed international companies especially in apparel and footwear such as adidas, Louis Vuitton, Gucci and others to have 100% ownership for their Indian operations. Companies such as Wal-Mart which was operating in India in partnership with Bharti Airtel announced its plans to open new Wal-Mart outlets across the country in 2013-2014. The decision was met with a vehement response across the country with political parties along with farmers and small grocery shop retailers, commonly known as kirana stores in India. The retail environment in India witnessed an on-going paradigm shift throughout the decade. The luxury retailer Genesis Luxury which started in 2008 entered into partnerships and joint ventures and launched international brands such as Armani, Bottega Veneta, Canali, Crabtree and Evelyn, Etro, Furla, Jimmy Choo, Luxxe Box, Paul Smith and Tumi. However, the presence of these brands in India pre-FDI permission was based on partnerships. Post-FDI allowance in India these companies and others such as Prada, Hennes & Mauritz (H&M), Banana Republic and more plan to enter India with 100% ownership in their single brand retail outlets. As the approval for FDI in India means easy availability of international players especially in apparel, footwear, personal accessories and eyewear, beauty and personal care and more in the country, the FDI decision was met with enthusiastic response from the young urban consumers. Most of the international brands have larger format stores. Therefore, domestic and international retailers are moving towards larger format stores as it gives the look and feel of big retailers and attracts larger footfall. As the decision to allow FDI 51% in multi brand retailing and 100% in single brand retailing was taken only in the last quarter of 2012, its affect whether in greater or restricted growth was still not evident at the time of writing. FDI in multi-brand and single brand retailing allow Indian consumers to experience retailing unlike the standard Indian retailing in big outlets and try brands which were earlier accessible only if one visits western countries. Consumers, especially the affluent ones, were quite excited about the decision. However, the less affluent consumer base was not happy as the small kirana stores, which are considered cheaper and have a more personal relationship with their clientele, will lose ground to the new hypermarkets and supermarkets entering the country. FDI in India is still in its nascent stages in the first quarter of 2013. FDI will start to show its growth in the next fiscal year of 2013-2014. Majority of the retailers are planning their entry strategy in India. IKEA in January 2013 finally got the approval to enter with its full global stock after being refused the first time by the government of India. IKEA was among the first players to make a move after FDI was allowed in India. FDI in retail was one of the biggest decisions taken by the government in 2012. This is expected to change the face of retailing in India in the next 2-3 years ie by 2014-2015. However, how much it will affect the domestic retailers is still unknown as the international retailers are still paving the way, getting approvals and getting paperwork done to enter the country.

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Outlook After the approval of 100% and 51% FDI in single and multi-brand retailing, how much it affects the domestic retailers will decide whether the government makes any amendments to the legislation in the forecast period. If the domestic players, especially the small kirana stores, are negatively impacted by the decision to a very large extent, the government will most likely amend the legislation in order to help these retailers. The decision was extremely politicised by the opposing government in order to overthrow the ruling government. Hence, one can expect changes to occur in the next fiscal year 2013-2014, especially as national elections will be held in 2014. Indias large consumer base, increasing per capita income and awareness regarding international brands makes it a much sought-after market in Asia. FDI inflows in India are expected to witness stronger growth in 2013. Future impact As modern grocery retailers such as hypermarkets, supermarkets and convenience stores provide the comfort of shopping for fresh food, packaged food, home care, tissue and hygiene, beauty and personal care, alcoholic beverages, non-alcoholic beverages, consumer health and more all in one location with a clean, hygienic environment, India will witness a shift towards modern grocery retailing in the forecast period. However, since in terms of numbers of outlets, traditional grocery retailers continued to contribute more than 90% of the total grocery retailers in India, the change will take a longer time. In the long term, the number of international, modern grocery and non-grocery retailers will definitely increase due to the increasing demand and preference for this channel over the traditional channel by consumers. Entry of FDI in India will give a boost to store-based retailing in the next fiscal year of 20132014. Store-based retailers will not be affected by the growth of internet retailers in the short term. This is because more than 95% of the total retailing is contributed by store-based retailing hence the effect of internet retailing on store-based retailing will be visible only in the long term. The approval of FDI in India will help to introduce new store-based retailing concepts in India, some of which were already adopted by domestic players such as large selling space per outlet in order to increase footfall, increased acceptance of cards and in some cases the store design. Hence retailers will invest in the store-based retailers keeping in mind these developments. However, as internet retailing will most likely witness strong growth, most retailers will invest in a strong internet retailing arm in the future.

Private Label Expands Across Both Grocery and Non-grocery Retailing


Private label products in packaged food, beverages, tissue and hygiene, home care and others performed strongly in 2012. Similarly, in non-grocery channels items such as apparel, electronics and appliance witnessed impressive acceptance among consumers in 2012. Current impact Private label products in India are still in their infancy, especially among grocery items. However, they accounted for substantial percentage value share amongst all store-based and non-store-based retailing in non-grocery items. Consumers preferred private label apparel as it was cheaper with almost the same quality as the national brands. However, since private label is still in the growth stages in India, the three tier private label was still not available in retailing. The growth of private label in overall retailing was driven by the increased sale of private label products in non-grocery items especially for apparel in both store-based and non-store-based

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retailing. The main reason for the success of private label in a country like India was its pricing. These products offer similar quality and quantity as a national brand however they are cheaper. In apparel, companies such as Lifestyle, Pantaloon, and Fashion at Big Bazaar among others focussed majority of their sales through private label. The cost of manufacturing, packaging and delivery together for private label was cheaper for the retailer compared to the national brands. In electronics and appliances, Croma aggressively marketed and promoted its appliances in all its stores. All the Croma appliances were priced much lower with higher warranty and guarantees offered on all products in order to attract consumers. Private label in 2012 was most successful in apparel internet retailing. Companies such as Myntra.com, a leading online apparel retailer, acquired exclusively and continued to promote private label brand Sher Singh. Myntra is in the process of steadily increasing its private label sales in order to attract a higher consumer base. In the case of products which directly affect their health, consumers avoided private label products. This was particularly evident for beauty and personal care, baby products and consumer health. These categories did not attract any private label buyers as a result of which the options of private label for these products were very low. Consumers continued to prefer to pay an extra amount but purchased the best brand that they can afford within their range for products which directly affect their health. The biggest challenge companies faced from these private label products was the copy of design and packaging which was practiced by retailers for private label. Packaging of products was very similar with minor differences in spellings and tag lines. As a result, consumers did not realise the product was private label and after realising they found little to no difference in quality at a cheaper price and therefore switched to private label. Hence, companies focussed on packaging and differentiating their products from private label in 2012. Non-grocery retailers both store-based and non-store-based led the advance of private label in 2012. Retailers in 2012 increased their private label line to a very large extent. The attraction of private label in 2012 was the low pricing; hence the entire focus by retailers on private label products was on low pricing. A large number of retailers, especially in apparel in 2012, focussed on their existing private label range along with increased concentration on introducing new private label products. Retailers such as Pantaloon, Westside, Croma, Jabong, Myntra among many others focussed on private label as these brands provided higher margin of profit to them. However, in order to attract customers to these brands, the retailers priced them low, provided a much larger variety for the same and maintained little to no difference in quality. However, these practices were easily mirrored by retailers in the same channel. For example: Star Bazaar by Tata Group has private label sugar, salt and other grocery items whose prices are almost the same as the private label products of Spar (Auchan). Outlook Private label will witness a paradigm shift in the forecast period, especially in non-grocery retailing. As consumers gradually shift towards internet retailing for apparel, footwear, personal accessories and eyewear shopping, these internet retailers will increase their private label products and range both in pricing and variety. Private label will most likely perform the best for sugar, salt and other grocery items, as well as consumer appliances. As consumers look for high warranty and guarantee for the home appliance they purchase, most of the consumer appliance retailers will follow suit with Croma and start pushing the sales of private label products with lower pricing compared to national brands in addition to warranty and guarantee. Private label contributed a larger portion in sales for non-grocery retail. Therefore, the growth rate for non-grocery retailing in the forecast period will be steadier compared to grocery retailing.

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For grocery retailing, private label contributed a minuscule portion of the total sales, therefore the growth of private label in grocery retailing in the forecast period will most likely be exponential initially and then become steady over a period of time. Pricing was the primary motivation for consumers moving towards private label. This will give tough competition to the national brands especially for products in packaged food, beverages, tissue and hygiene and home care among others. For non-grocery retailing products such as apparel, footwear, accessories and apparel pricing will continue to be maintained lower than the national brands in order to build a solid ground for private label in retailing in India. Future impact There is plenty room for expansion of this trend. Consumers, especially the upper middle class and higher, continued to prefer the national brands as the trust factor is still low for private label products. As private label slowly becomes popular among consumers for various product categories, retailers will continue to push private label products and consumers will eventually trust them more. Retailing in the forecast period will witness a clear demarcation between national brands and private label products. With increased acceptance of private label, more evolution and improvement will be witnessed in private label in the future. The concept of good, better, best private label pricing will also be introduced. With foreign direct investments allowed in single and multi-brand retailing, India will be the new and emerging market for international large retailers such as Wal-Mart, Tesco, Carrefour and others. As these companies are known across the globe for their large sale of private label products, they will mostly likely increase the marketing of their private label products in India as well. Wal-Marts private label, Great Value, was present in India through its outlets which were opened in partnership with Bharti Airtel. Private label in grocery retailing will witness growth in the forecast period. This will be evident for packaged food, beverages and home care products. Consumers in 2012 started experimenting with private label home care products such as floor cleaners and laundry products amongst others. With the increase of awareness regarding private label, consumers will most likely shift towards these brands which will eventually encourage the retailers to improve on quality and packaging of their private label products. In the forecast period, private label will contribute nearly 50-60% of total apparel, footwear and accessories sales in store-based retailing and even higher in non-store retailing as consumers have fewer doubts about experimenting in these categories. In order to benefit from this trend, retailers will most likely expand the private label ranges, improve the variety of brands, price range and quality. Private label in India in 2012 in total retailing contributed a small percentage. Therefore, there exists a huge potential for retailers to expand and improve on private label in order to increase overall revenue. In order to maintain the trend, retailers in the forecast period will succeed if they focus and organise the manufacturers of the private label products, increase the number of options the brands provide the customer, improve the quality so that it is on par with national brands and finally promote and market these brands in order to increase the brand awareness amongst consumers. Private label in the forecast period will be primarily driven by the younger urban population in the age group of 20-35 years old. Consumer base of this age group in urban areas of the country will have increased disposable income and hence will be more willing to experiment with the newer brand. Among this consumer base, the younger population of the age group between 20-25 years old, whether working or studying, will drive the sales of apparel, footwear and accessories as private label is cheaper and provides them with larger number of options for designs.

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For grocery retailing, private label products will be driven by the entry of companies such as Wal-Mart. Wal-Mart with its well-established brand name of its private label such as Great Value will help to increase the awareness and use of private label products in grocery items to a very large extent. Lack of time and convenience were the two most important guiding forces when it came to shopping, both grocery and non-grocery. As a result of this, internet retailing is expected to witness a huge growth in the forecast period. New retailing concepts will be observed with the development of non-store retailing channels such as vending, direct selling and homeshopping apart from internet retailing. Due to the increased market share of private label products, retailers themselves are entering into manufacturing or taking over small manufacturers under their own brands in order to increase their private label portfolio. The balance of power between retailers-manufacturers was at a crux in 2012; however, the power is likely to shift towards the retailer in the forecast period, as the market share of private label increases.

Greater Debit and Credit Card Penetration Encourages Consumers To Spend


In the review period the attitude of consumers towards use of cards witnessed a massive change with majority of consumers shopping in modern grocery retailing in cities and metropolitan areas and making payments by cards. Card payment transactions excluding commercial transactions witnessed growth of 35% in 2011-12. The CAGR for card payment transactions witnessed growth of 27% in the review period and is expected to increase to 33% in the forecast period. Current impact India is primarily a country that uses cash. However, the review period witnessed a shift in the use of cards. The shift was primarily driven by the increased acceptance of cards by retailing across all the major cities and to a certain extent to tier 2 cities. The number of point of sale terminals witnessed an increase of 16% at 717,000 units. This increased number of point of sale terminals increased the use of cards across all retailing outlets in India. This trend is in line with the governments efforts to encourage the use of cards and plastic money in general and it costs less for the government compared to cash transactions whose costs are borne by the central bank ie Reserve Bank of India. The grocery shopping experience for the urban consumers in the age group of 16-50 years witnessed a massive change in the review period. The change was due to firstly increased number of modern grocery retailers which allowed consumers to have access to brands and products which were not easily available and secondly the concept of grocery shopping in general. Instead of going to the local kirana store whenever something is required, most urban consumers in the review period changed the practice to doing grocery shopping once a week. This resulted in one large bill one time every week which 35-40% of all consumers paid for with cards. In non-grocery shopping similar change in payment method was observed. Consumers preferred to pay by card as it was convenient, accountable and did not require the consumer to carry cash around all the time. Use of cards in retailing was prevalent across both grocery and non-grocery retailing channels. The need for more point of sale terminals in order to make the shopping experience more convenient for the urban consumer was quite prevalent among all retailers. Even the nonstore retailers, such as internet retailers, came up with payment by card option on delivery in order to increase the consumer base.

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Retailers are increasing the total number of point of sale terminals across all their outlets. Furthermore, non-grocery retailers such as consumer electronics and appliance retailers have links with finance companies which allow consumers to make payments with credit cards or take the EMI option with minimum rate of interest. Retailers who practiced this extensively in 2012 were Croma, Next, eZone, Pai Electronics and others. This trend is also being followed by nonstore retailing where a few of the internet retailers such as Jabong and consumer food service companies such as Dominos in 2012 allowed consumers to pay by card on delivery. This option was met with a huge positive response from consumers as it made the exercise of online shopping faster, comfortable and convenient. The use of cards increased to such an extent that a large number of kirana stores lost a portion of their business to modern grocery retailers as consumers did not carry cash all the time. In non-grocery retailers such as beauty and personal care specialist and consumer health specialist retailers in order to maintain both traditional and cash paying consumer base they maintained a minimum order amount to accept cards, for example Rs100, below which one needs to pay by cash. This method was still prevalent as a certain proportion of the consumer base, particularly the elder generation of the age group 50-65 years, preferred using cash. This was quite prevalent for consumer health products. Majority of retailers, however, in both grocery and non-grocery channel accepted cards in 2012 which was a welcome change for consumers. Use of cards provided consumers with the independence to spend more without the actual act of handing over cash. As a result consumers felt it more convenient to spend more. The average spend per transaction witnessed an increase of 13% in 2012. This is expected to continue to grow in the forecast period. The independence of using a card allows consumers to spend without feeling guilty, especially the use of credit card allows consumers to purchase goods which otherwise would not have been possible. The trend has a lot of room to grow as the major consumer base, nearly 60% of the total population of India, is in rural India. The rural consumer base does not have access to credit and debit cards, also low literacy rate, banking facilities and per capita income did not allow the rural consumer base to practice the use of plastic money. However, the government of India through financial inclusion continued to focus on increasing the banking population and providing no frills accounts with ATM-cum-debit cards. Retailers need to exploit this trend and encourage the use of cards among consumers by giving discounts on payment through card and speeding up the process of billing and use of cards. Retailers across all the products both store-based and non-store-based whether grocery retailers such as hypermarket, supermarket, convenience stores or non-grocery retailers such as apparel and footwear, consumer electronics and appliance, beauty and personal care, consumer health specialists amongst others increased the number of point of sale terminals and will continue to encourage consumers to use cards in the forecast period. Outlook The banked population in India above the age of 15 was nearly 80% of the total population in 2012. However, the use of cards for retailing was nowhere close to being that high among consumers inclusive of urban and rural population. As the economy grows, the GDP is expected to grow by 7-8% with employment rate expected to grow by nearly 2% over the forecast period. This will help to increase and encourage consumers even in tier 3 and rural areas of the country to use cards for shopping. Also, retailers will most likely focus on the untapped rural consumer base by increasing their outlet reach to these parts of the country. The trend will last and grow steadily until the majority of the urban population and the affluent and literate rural population start using cards primarily for all their retailing purposes. The trend is here to stay as the use of cards is firstly convenient and fast for the consumers, secondly helps to increase the average spend per person for retailers and thirdly the government is

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constantly focussing and encouraging consumers across the country to use cards and decrease the number of cash transactions. The trend is likely to stay as India is one of the fastest-growing emerging markets and will become one of the most sought-after markets for international retailers. With the approval of foreign direct investment in retailing and expected increase in average per capita disposable income, there will be a change in the total retailing experience in India. Consumers are moving towards more organised and westernised forms of retailing, as a result of which use of cards for grocery/non-grocery and store/non-store-based retailing will witness massive growth. Future impact The use of debit cards, especially for every day expenses such as for store-based grocery retailing, will witness substantial growth in the forecast period as Indians prefer the no-credit form of payment as the mind-set of Indian population avoids having debt. The use of credit cards will witness an increase for products with higher replacement cycle such as consumer electronics and appliances particularly for mobile phones, cameras and camcorders, tablets, e-readers, television sets, refrigerators and more. The use of closed loop and open-loop pre-paid cards will be utilised by retailers in order to retain customers. Companies such as ValueCloud Ltd introduced Cloud Card. The company has links with 15 retailers which include restaurants, fashion brands, spas and salons such as Clarins, Jimmy Choo, Caf Noir, Bay Leaf and more where these closed loop cards can be used. This will eventually be mirrored by other companies and retailers as well in order to obtain a loyal customer base. Companies and retailers will need to focus on encouraging consumers to use cards for their payments, as in 80% of cases the use of cards makes a customer have higher average spend per transaction compared to cash. Retailers especially will most likely provide discounts if consumers use cards and especially for those who hold the particular retail channel loyalty card such as for Westside, Pantaloon, Star Bazaar and more. This emerging trend will drive the urban population towards modern retail channels as consumers already started to prefer cards for transactions and local small players did not have point of sale terminals for cards in 2012. This is where the modern retailers leveraged the smaller retailers and will most likely continue to do so, unless the smaller players start to mirror the same strategies as the bigger modern retailers. The increased use of cards will affect every retail channel. However, the trend will be easier for store-based retailers to use to their advantage. Non-store retailing will take longer time to benefit from this trend as the country is in the development phase of proper infrastructure and machines such as portable card swiping machines and will take a minimum of 2-3 years before technology is strong enough for portable card usage to take over the consumer payment methodology. As the use of cards increases in the forecast period, the trend will take over retailing in urban parts of the country. Retailing at the end of the forecast period will be substantially different compared to 2012. The use of technology for any kind of shopping whether grocery or nongrocery will be very high. Use of cards for payments and internet retailing for shopping will be two key aspects of retailing by 2017 as it will combine the two most common requirements for shopping among consumers ie low pricing and convenience. In order to maintain the momentum for the trend and benefit from it retailers will need to encourage and be open to technological changes, provide customers with strong customer care service in order to encourage them to use the technology and constantly keep in touch with new payment methodologies in order to make the entire experience of shopping as fast and convenient as possible.

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the Focus on Tier 2 and Tier 3 Cities Continues


Urbanisation as a phenomenon is moving very fast among Indian consumers. The concept of shopping in malls, hypermarkets, supermarkets, convenience stores and other similar modern retailers took a strong hold in retailing in metropolitan areas such as Mumbai, Delhi, Bangalore, Chennai and Kolkata. However, retailers are in the process of realising the large potential of the consumer base present in the tier 2 and tier 3 cities of India. Both companies and retailers will continue to focus on these cities in the forecast period in order to capture the untapped market. Current impact Tier 2 and Tier 3 cities in India are defined based on the population of the city. These cities are generally less urbanised compared to the big tier 1 cities such as Mumbai, Delhi, and Bangalore amongst others. However, urbanisation is picking up fast in the tier 2 and 3 cities. The primary reason behind this trend was firstly as the real estate prices increase, retailers find it more cost effective in the tier 2 and tier 3 cities to expand and open new outlets with larger selling space and secondly, the consumer base in these cities was not exploited by modern retailing as it did in tier 1 or metropolitan cities. The latter provides retailers with more possibilities to expand and reach out to a larger consumer base. Consumers in tier 2 and tier 3 cities welcomed this change with an increasing consumer base, with those equipped with computers and internet connection shopping online as well. Increasing disposable income was evident in these cities as well, as a result of which consumers in these cities were in the process of undergoing a mind-set change and moving towards modern retailing such as convenience stores and supermarkets for grocery retailing, department stores, consumer electronics and appliance specialists for non-grocery retailing and internet retailing for various products. Beauty and personal care specialists such as MAC Cosmetics expanded their outlets to cities such as Amritsar, Gurgaon, Ludhiana and Pune as well as tier 1 cities. Big Bazaar is present across the country among all the cities. Similarly, apparel and footwear stores such as Shoppers Stop and Lifestyle have presence in tier 2 cities such as Pune, Aurangabad, Bhopal and more. Domestic and international retailers and companies in the forecast period will focus on tier 2 and tier 3 cities. This trend will continue to drive retailing as the tier 1 or metropolitan cities will be exhausted in terms of real estate, consumer base and brands. The tier 2 and tier 3 cities will take a minimum of 5-7 years to reach their complete potential which will be tapped by the retailers. The trend was still in its initial stages in 2012 with a few retailers such as Big Bazaar by Future Value Retail Ltd, Reliance Retail by Reliance Industries Ltd and Lifestyle by Landmark Group amongst others who made the move and were among the first retailers to do so. India will witness a large number of retailers moving towards tier 2 and tier 3 cities in the forecast period. Outlook The growth rate for business establishments in finance, real estate, insurance, business services, transport, communication, trade, hotels and restaurants in tier 1 cities witnessed a decline overall in 2012. This will continue in the forecast period as these cities are close to saturation in terms of population, brands and companies. However, this is not the same for the tier 2 and 3 cities. Retailers will exploit the wide array of opportunities available in terms of land and price, low competition as compared to the tier 1 cities and enjoying the first mover advantage. The trend will last in the forecast period with cities such as Pune, Amritsar, Chandigarh, Bhopal and more becoming the next big retailing destinations. The limitation of store-based retailing is the lack of infrastructure in these cities therefore the trend will be more prevalent in non-store-based retailing as brands which are not available yet in these cities will make their

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way into the city with the help of internet retailing. Hence, internet retailing will most likely witness an increased area of delivery in order to cater to this increased demand for brands. Also, direct selling will increase its presence across these cities as companies such as Avon, Oriflame, Amway and Herbalife amongst others will continue to focus on strengthening their distributor network especially in these cities as the consumer base in tier 2 and 3 cities do not have clear access to international brands. Future impact In 2012, majority of domestic retailers either planned to enter the tier 2 and tier 3 cities or were already in the process of entering these markets in 2012. In first quarter of 2013 saw Future Value Retail post its sale of Pantaloon to Aditya Birla Nuvo Ltd and was in the process of entering the tier 2 and 3 cities with a new brand named Future Lifestyle Fashion which was formed in 2012 by combining all the fashion portfolios of the group. The company plans to enter the tier 2 and tier 3 cities with a new format selling primarily private label products. The company will be listed in the middle of 2013. The entry of one of the biggest retail giants of India in these markets will make other grocery and non-grocery retailers follow suit. Smaller cities will be the centre of attention for most retailers as they will provide the retailers with the opportunity to increase their consumer base, cheaper real estate prices to set up their outlets and strong need for international brands which will give a push to internet and direct sellers. Retailers in the forecast period, especially the large domestic players, will move towards these cities. With the FDI being approved, international brands will first set up their outlets and increase presence in metropolitan areas and will eventually move towards the tier 2 and tier 3 cities towards the end of the forecast period. Retailers, both store-based and non-store-based, will succeed and benefit from this trend in the forecast period if they keep in mind the new and different consumer base, requirements, preferences, price points and quality in tier 2 and 3 cities. The shift to tier 2 and tier 3 cities will affect grocery and non-grocery retailing equally as the issues for which the shift will happen will be applicable to all retailers. Internet retailing will benefit from this trend faster than store-based retailers as the cost required to increase the reach to these cities is lower for internet retailers, where they have to primarily concentrate on increasing their distribution network. Metropolitan areas and tier 2 and tier 3 cities are expected to undergo substantial changes by 2017 compared to 2012. Brands which were easily available in metropolitan areas both in grocery/non-grocery and store-based/non-store-based will have a much stronger presence in the tier 2 and 3 cities and the metropolitan areas will be dominated by foreign companies due to the FDI and increased demand for western brands and products in tier 1 cities. Retailers need to understand the consumer base based on literacy, education, exposure, need and annual disposable income of the tier 2 and tier 3 cities in order to benefit from the trend and maintain its momentum which will eventually help in the improvement of their sales.

MARKET INDICATORS
Table 1 Employment in Retailing 2007-2012 2007 Total employment ('000 people) Employment in retailing ('000 people) 386,174.5 37,768.4 2008 388,706.6 38,596.0 2009 398,664.2 39,224.0 2010 404,730.8 40,008.5 2011 414,842.3 40,808.6 2012 420,719.2 41,735.1

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Employment in retailing (%) (% of total employment)


Source:

9.8

9.9

9.8

9.9

9.8

9.9

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews

MARKET DATA
Table 2 Sales in Retailing by Channel: Value 2007-2012

Rs bn, retail value rsp excl sales tax 2007 Store-based Retailing Non-Store Retailing Retailing
Source:

2008 13,351.1 67.3 13,418.4

2009 14,808.2 83.3 14,891.5

2010 16,541.0 103.7 16,644.7

2011 18,512.9 135.7 18,648.6

2012 20,943.0 174.6 21,117.6

11,945.2 54.0 11,999.2

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 3

Sales in Retailing by Channel: % Value Growth 2007-2012

% current value growth, retail value rsp excl sales tax 2011/12 Store-based Retailing Non-Store Retailing Retailing
Source:

2007-12 CAGR 11.9 26.5 12.0

2007/12 Total 75.3 223.4 76.0

13.1 28.7 13.2

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 4

Sales in Store-Based Retailing by Channel: Value 2007-2012

Rs bn, retail value rsp excl sales tax 2007 Grocery Retailers Non-Grocery Retailers Store-based Retailing
Source:

2008 9,580.5 3,770.5 13,351.1

2009 10,637.3 4,170.9 14,808.2

2010 11,838.2 4,702.8 16,541.0

2011 13,157.8 5,355.1 18,512.9

2012 14,608.0 6,335.0 20,943.0

8,526.6 3,418.7 11,945.2

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 5 outlets

Store-Based Retailing Outlets by Channel: Units 2007-2012

2007 Grocery Retailers Non-Grocery Retailers

2008

2009

2010

2011

2012

11,913,149 12,058,689 12,162,927 12,236,756 12,303,700 12,366,016 1,462,876 1,570,252 1,634,283 1,724,893 1,837,064 1,953,026

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Store-based Retailing
Source:

13,376,025 13,628,941 13,797,210 13,961,649 14,140,764 14,319,042

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 6

Sales in Store-Based Retailing by Channel: % Value Growth 2007-2012

% current value growth, retail value rsp excl sales tax 2011/12 Grocery Retailers Non-Grocery Retailers Store-based Retailing
Source:

2007-12 CAGR 11.4 13.1 11.9

2007/12 Total 71.3 85.3 75.3

11.0 18.3 13.1

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 7 % unit growth

Store-Based Retailing Outlets by Channel: % Unit Growth 2007-2012

2011/12 Grocery Retailers Non-Grocery Retailers Store-based Retailing


Source:

2007-12 CAGR 0.7 5.9 1.4

2007/12 Total 3.8 33.5 7.1

0.5 6.3 1.3

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 8

Sales in Non-store Retailing by Channel: Value 2007-2012

Rs bn, retail value rsp excl sales tax 2007 Direct Selling Homeshopping Internet Retailing Vending Non-Store Retailing
Source: Note:

2008 37.0 5.8 24.6 67.3

2009 42.5 7.2 33.6 83.3

2010 49.6 8.8 45.4 103.7

2011 61.7 10.4 63.6 135.7

2012 76.8 11.5 86.3 174.6

31.9 4.5 17.6 54.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 9

Sales in Non-store Retailing by Channel: % Value Growth 2007-2012

% current value growth, retail value rsp excl sales tax 2011/12 Direct Selling Homeshopping Internet Retailing Vending Non-Store Retailing 24.5 10.2 35.8 28.7 2007-12 CAGR 19.2 20.8 37.4 26.5 2007/12 Total 140.9 157.0 389.6 223.4

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Source: Note:

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 10

Sales in Retailing by Grocery vs Non-Grocery: 2007-2012

% retail value rsp excl sales tax 2007 Grocery Non-Grocery Total
Source:

2008 62.0 38.0 100.0

2009 61.5 38.5 100.0

2010 62.0 38.0 100.0

2011 67.6 32.4 100.0

2012 71.2 28.8 100.0

63.5 36.5 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 11

Sales in Non-Grocery Retailers by Channel: Value 2007-2012

Rs bn, retail value rsp excl sales tax 2007 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2008 1,486.2 454.1

2009 1,668.5 495.0

2010 1,872.2 549.5

2011 2,115.5 613.9

2012 2,549.2 715.1

1,331.5 412.9

325.1 423.7 856.6

339.7 454.7 953.6

354.3 473.8 1,094.9

376.5 505.7 1,298.3

402.0 542.2 1,561.7

433.6 614.4 1,880.9

49.2 19.7 3,418.7

60.8 21.5 3,770.5

61.3 23.2 4,170.9

75.1 25.5 4,702.8

92.3 27.6 5,355.1

111.2 30.6 6,335.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 12 outlets

Non-Grocery Retailers Outlets by Channel: Units 2007-2012

2007 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal 413,426 46,000

2008 457,251 50,500

2009 494,327 53,050

2010 549,673 57,300

2011 610,137 61,598

2012 674,201 66,249

753,536 124,882 112,060

799,342 128,471 121,258

817,382 130,069 125,721

840,025 131,959 131,681

871,027 134,372 145,276

900,330 136,914 160,216

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Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

440 12,532 1,462,876

610 12,820 1,570,252

658 13,076 1,634,283

786 13,469 1,724,893

916 13,738 1,837,064

1,076 14,040 1,953,026

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 13

Sales in Non-Grocery Retailers by Channel: % Value Growth 2007-2012

% current value growth, retail value rsp excl sales tax 2011/12 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2007-12 CAGR 13.9 11.6 5.9 7.7 17.0 17.7 9.2 13.1

2007/12 Total 91.5 73.2 33.4 45.0 119.6 126.0 55.0 85.3

20.5 16.5 7.9 13.3 20.4 20.4 10.8 18.3

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 14 % unit growth

Non-Grocery Retailers Outlets by Channel: % Unit Growth 2007-2012

2011/12 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2007-12 CAGR 10.3 7.6 3.6 1.9 7.4 19.6 2.3 5.9

2007/12 Total 63.1 44.0 19.5 9.6 43.0 144.5 12.0 33.5

10.5 7.6 3.4 1.9 10.3 17.5 2.2 6.3

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 15

Retailing Company Shares: % Value 2008-2012

% retail value rsp excl sales tax Company Titan Industries Ltd Future Value Retail Ltd Reliance Retail Ltd Pantaloon Retail India

2008 0.2 0.0 0.2 0.4

2009 0.3 0.0 0.2 0.4

2010 0.3 0.4 0.2 0.1

2011 0.4 0.4 0.3 0.1

2012 0.4 0.4 0.3 0.1

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Ltd Shopper's Stop Ltd Amway India Enterprises Pvt Ltd LG Electronics India Pvt Ltd Lifestyle International Pvt Ltd Vishal Retail Ltd Subhiksha Trading Services Pvt Ltd Others Total
Source:

0.1 0.1 0.1 0.1 0.1 0.2 98.5 100.0

0.1 0.1 0.1 0.1 0.1 98.7 100.0

0.1 0.1 0.1 0.1 0.1 98.5 100.0

0.1 0.1 0.1 0.1 98.4 100.0

0.1 0.1 0.1 0.1 98.3 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 16

Retailing Brand Shares: % Value 2009-2012

% retail value rsp excl sales tax Brand Company Tanishq Big Bazaar Reliance Amway Shoppers' Stop Lifestyle LG Shoppe Vishal Mega Mart Big Bazaar Subhiksha Others Total
Source:

2009 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.3 99.0 100.0

2010 0.2 0.3 0.2 0.1 0.1 0.1 0.1 0.1 98.8 100.0

2011 0.3 0.3 0.2 0.1 0.1 0.1 0.1 98.8 100.0

2012 0.3 0.3 0.2 0.1 0.1 0.1 0.1 98.7 100.0

Titan Industries Ltd Future Value Retail Ltd Reliance Retail Ltd Amway India Enterprises Pvt Ltd Shopper's Stop Ltd Lifestyle International Pvt Ltd LG Electronics India Pvt Ltd Vishal Retail Ltd Pantaloon Retail India Ltd Subhiksha Trading Services Pvt Ltd

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 17

Store-Based Retailing Company Shares: % Value 2008-2012

% retail value rsp excl sales tax Company Titan Industries Ltd Future Value Retail Ltd Reliance Retail Ltd Pantaloon Retail India Ltd Shopper's Stop Ltd LG Electronics India Pvt Ltd Lifestyle International Pvt Ltd Home Solutions Retail (India) Ltd

2008 0.2 0.2 0.4 0.1 0.1 0.1 0.0

2009 0.3 0.2 0.4 0.1 0.1 0.1 0.0

2010 0.3 0.3 0.2 0.1 0.1 0.1 0.1 0.0

2011 0.4 0.4 0.3 0.1 0.1 0.1 0.1 0.0

2012 0.4 0.3 0.3 0.1 0.1 0.1 0.1 0.0

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Vishal Retail Ltd Subhiksha Trading Services Pvt Ltd Others Total
Source:

0.1 0.2 98.6 100.0

0.1 98.8 100.0

0.1 98.6 100.0

98.5 100.0

98.4 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 18

Store-Based Retailing Brand Shares: % Value 2009-2012

% retail value rsp excl sales tax Brand Company Tanishq Big Bazaar Reliance Shoppers' Stop Lifestyle LG Shoppe Home Town Vishal Mega Mart Big Bazaar Subhiksha Others Total
Source:

2009 0.2 0.2 0.1 0.1 0.1 0.0 0.1 0.3 99.0 100.0

2010 0.2 0.3 0.2 0.1 0.1 0.1 0.0 0.1 98.9 100.0

2011 0.3 0.3 0.2 0.1 0.1 0.1 0.0 98.9 100.0

2012 0.3 0.3 0.2 0.1 0.1 0.1 0.0 98.8 100.0

Titan Industries Ltd Future Value Retail Ltd Reliance Retail Ltd Shopper's Stop Ltd Lifestyle International Pvt Ltd LG Electronics India Pvt Ltd Home Solutions Retail (India) Ltd Vishal Retail Ltd Pantaloon Retail India Ltd Subhiksha Trading Services Pvt Ltd

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 19 sites/outlets Brand Reliance Big Bazaar Tanishq LG Shoppe Shoppers' Stop Lifestyle Home Town Vishal Mega Mart Big Bazaar Subhiksha Others Total
Source:

Store-Based Retailing Brand Shares: Outlets 2009-2012

Company Reliance Retail Ltd Future Value Retail Ltd Titan Industries Ltd LG Electronics India Pvt Ltd Shopper's Stop Ltd Lifestyle International Pvt Ltd Home Solutions Retail (India) Ltd Vishal Retail Ltd Pantaloon Retail India Ltd Subhiksha Trading Services Pvt Ltd

2009 710 117 95 29 17 12 145 120 13,795,965 13,797,210

2010 830 150 120 100 36 25 13 150 13,960, 225 13,961, 649

2011 615 160 123 100 42 32 15 14,139, 677 14,140, 764

2012 620 185 148 105 55 33 17 14,317, 879 14,319, 042

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

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Table 20

Non-store Retailing Company Shares: % Value 2008-2012

% retail value rsp excl sales tax Company Amway India Enterprises Pvt Ltd Dell India Pvt Ltd Eureka Forbes Ltd Tupperware India Pvt Ltd Herbalife International India Pvt Ltd Oriflame India Pvt Ltd Myntra.com Forever Living Products India Pvt Ltd TV18 Home Shopping Network Ltd Future Value Retail Ltd Avon Beauty Products India Pvt Ltd Rediff.com India Ltd Jabong.com TVC Skyshop Ltd Modicare Ltd Telebrands India Pvt Ltd Times Internet Ltd AMC Cookware India Pvt Ltd Network18 Group Asian Sky Shop Ltd Others Total
Source: Note:

2008 17.6 5.5 10.9 4.0 0.9 3.1 1.6 2.1 1.3 1.1 1.5 1.8 1.3 1.7 1.6 1.2 1.3 1.3 40.3 100.0

2009 18.4 6.3 9.7 3.6 1.4 3.4 1.8 1.8 2.6 1.5 1.5 2.2 1.3 1.5 1.6 1.3 1.1 0.5 1.2 37.3 100.0

2010 17.4 7.4 8.6 3.2 2.4 3.4 2.0 1.8 3.5 2.0 1.7 2.2 1.3 1.0 1.3 1.3 0.9 0.6 1.1 37.0 100.0

2011 15.7 7.9 7.5 3.2 3.8 3.4 2.3 2.8 2.8 2.3 1.8 2.0 1.1 1.0 1.0 1.0 0.8 0.6 0.9 38.0 100.0

2012 14.6 7.2 6.7 3.3 3.3 3.0 2.7 2.3 2.3 2.1 2.0 1.8 1.4 0.8 0.8 0.8 0.8 0.7 0.7 0.7 41.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 21

Non-store Retailing Brand Shares: % Value 2009-2012

% retail value rsp excl sales tax Brand Company Amway Dell Eureka Forbes Tupperware Herbalife Oriflame Myntra Forever Living HomeShop18 Amway India Enterprises Pvt Ltd Dell India Pvt Ltd Eureka Forbes Ltd Tupperware India Pvt Ltd Herbalife International India Pvt Ltd Oriflame India Pvt Ltd Myntra.com Forever Living Products India Pvt Ltd TV18 Home Shopping Network Ltd

2009 18.4 6.3 9.7 3.6 1.4 3.4 1.8 1.8 2.6

2010 17.4 7.4 8.6 3.2 2.4 3.4 2.0 1.8 3.5

2011 15.7 7.9 7.5 3.2 3.8 3.4 2.3 2.8 2.8

2012 14.6 7.2 6.7 3.3 3.3 3.0 2.7 2.3 2.3

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Futurebazaar Avon India Online Jabong.com TVC Skyshop Modicare Telebrands Indiatimes Shopping AMC HomeShop18 Asian Sky Shop Others Total
Source: Note:

Future Value Retail Ltd Avon Beauty Products India Pvt Ltd Rediff.com India Ltd TVC Skyshop Ltd Modicare Ltd Telebrands India Pvt Ltd Times Internet Ltd AMC Cookware India Pvt Ltd Network18 Group Asian Sky Shop Ltd

1.5 1.5 2.2 1.3 1.5 1.6 1.3 1.1 0.5 1.2 37.3 100.0

2.0 1.7 2.2 1.3 1.0 1.3 1.3 0.9 0.6 1.1 37.0 100.0

2.3 1.8 2.0 1.1 1.0 1.0 1.0 0.8 0.6 0.9 38.0 100.0

2.1 2.0 1.8 1.4 0.8 0.8 0.8 0.8 0.7 0.7 0.7 41.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 22

Non-Grocery Retailers Company Shares: % Value 2008-2012

% retail value rsp excl sales tax Company Titan Industries Ltd Pantaloon Retail India Ltd LG Electronics India Pvt Ltd Shopper's Stop Ltd Lifestyle International Pvt Ltd Tribhovandas Bhimji Zaveri Delhi Pvt Ltd Next India Retail Ltd Godrej & Boyce Mfg Co Ltd Infiniti Retail Ltd Reliance Retail Ltd MobileStore Ltd, The Vijay Sales Ltd Raymond Ltd Bata India Ltd Samsung India Electronics Ltd Reebok India Pvt Ltd Airplaza Retail Holdings Pvt Ltd Trent Ltd Aditya Birla Nuvo Ltd Spice Retail Ltd Vishal Retail Ltd Others Total
Source:

2008 0.8 0.4 0.5 0.3 0.2 0.2 0.2 0.3 0.2 0.1 0.3 0.2 0.2 0.2 0.1 0.2 0.2 0.1 0.1 0.4 94.8 100.0

2009 0.9 0.4 0.5 0.3 0.2 0.2 0.3 0.3 0.2 0.1 0.3 0.1 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.3 94.5 100.0

2010 1.1 0.5 0.4 0.3 0.3 0.2 0.3 0.2 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 94.0 100.0

2011 1.3 0.5 0.4 0.3 0.3 0.2 0.3 0.2 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 93.7 100.0

2012 1.3 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 93.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 23

Non-Grocery Retailers Brand Shares: % Value 2009-2012

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% retail value rsp excl sales tax Brand Company Tanishq Shoppers' Stop Lifestyle TBZ - The Original Interio Croma LG Shoppe Pantaloons Next The MobileStore Vijay Sales Bata Samsung Plaza Raymond Shop, The Reebok eZone Vishal Mega Mart Spice Hotspot Reliance Digital Westside Vishal Mega Mart Others Total
Source:

2009 0.7 0.3 0.2 0.2 0.3 0.2 0.4 0.2 0.3 0.3 0.1 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.3 95.2 100.0

2010 0.9 0.3 0.3 0.2 0.2 0.3 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.2 94.8 100.0

2011 1.0 0.3 0.3 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 94.5 100.0

2012 1.1 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 94.5 100.0

Titan Industries Ltd Shopper's Stop Ltd Lifestyle International Pvt Ltd Tribhovandas Bhimji Zaveri Delhi Pvt Ltd Godrej & Boyce Mfg Co Ltd Infiniti Retail Ltd LG Electronics India Pvt Ltd Pantaloon Retail India Ltd Next India Retail Ltd MobileStore Ltd, The Vijay Sales Ltd Bata India Ltd Samsung India Electronics Ltd Raymond Ltd Reebok India Pvt Ltd Pantaloon Retail India Ltd Airplaza Retail Holdings Pvt Ltd Spice Retail Ltd Reliance Retail Ltd Trent Ltd Vishal Retail Ltd

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 24 sites/outlets Brand

Non-Grocery Retailers Brand Shares: Outlets 2009-2012

Company Bata India Ltd MobileStore Ltd, The Reebok India Pvt Ltd Spice Retail Ltd Raymond Ltd Next India Retail Ltd adidas India Marketing Pvt Ltd Samsung India Electronics Ltd Benetton India Pvt Ltd Koutons Retail India Ltd Titan Industries Ltd Bombay Dyeing & Mfg Co Ltd Sony India Pvt Ltd Koutons Retail India Ltd Fabindia Overseas Pvt Ltd Airplaza Retail Holdings Pvt Ltd

2009 1,350 1,200 880 680 420 500 450 350 190 700 280 430 320 580 105 -

2010 1,330 1,300 1,050 780 530 590 700 390 270 520 300 410 280 430 133 -

2011 1,310 1,400 1,100 900 630 650 825 420 340 470 325 390 300 370 150 150

2012 1,460 1,200 900 800 750 730 650 425 425 400 381 350 305 224 190 150

Bata The MobileStore Reebok Spice Hotspot Raymond Shop, The Next adidas Samsung Plaza Benetton Koutons World of Titan Bombay Dyeing Sony Centre Charlie Outlaw Fabindia Vishal Mega Mart

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Tanishq Provogue LG Shoppe Reliance Trends Vishal Mega Mart Others Total
Source:

Titan Industries Ltd Provogue (India) Ltd LG Electronics India Pvt Ltd Reliance Retail Ltd Vishal Retail Ltd

117 126 95 15 145 1,625,350 1,634,283

120 150 100 35 150 1,715,325 1,724,893

123 170 100 55 1,826,886 1,837,064

148 133 105 100 1,943,200 1,953,026

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 25

Forecast Sales in Retailing by Channel: Value 2012-2017

Rs bn, retail value rsp excl sales tax 2012 Store-based Retailing Non-Store Retailing Retailing
Source:

2013 22,182.5 208.2 22,390.7

2014 23,568.5 240.3 23,808.8

2015 24,921.6 273.6 25,195.2

2016 26,458.1 308.5 26,766.6

2017 27,908.7 339.2 28,247.9

20,943.0 174.6 21,117.6

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 26

Forecast Sales in Retailing by Channel: % Value Growth 2012-2017

% constant value growth, retail value rsp excl sales tax 2012-17 CAGR Store-based Retailing Non-Store Retailing Retailing
Source:

2012/17 TOTAL 33.3 94.2 33.8

5.9 14.2 6.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 27

Forecast Sales in Store-Based Retailing by Channel: Value 2012-2017

Rs bn, retail value rsp excl sales tax 2012 Grocery Retailers Non-Grocery Retailers Store-based Retailing
Source:

2013 15,148.8 7,033.7 22,182.5

2014 15,751.5 7,817.0 23,568.5

2015 16,256.8 8,664.8 24,921.6

2016 16,871.8 9,586.2 26,458.1

2017 17,401.1 10,507.7 27,908.7

14,608.0 6,335.0 20,943.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 28 outlets

Forecast Store-Based Retailing Outlets by Channel: Units 2012-2017

2012 Grocery Retailers

2013

2014

2015

2016

2017

12,366,016 12,434,048 12,494,027 12,550,100 12,602,495 12,646,188

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Non-Grocery Retailers Store-based Retailing


Source:

1,953,026 2,079,241 2,212,134 2,349,623 2,482,358 2,616,791 14,319,042 14,513,289 14,706,161 14,899,723 15,084,853 15,262,979

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 29

Forecast Sales in Store-Based Retailing by Channel: % Value Growth 20122017

% constant value growth, retail value rsp excl sales tax 2012-17 CAGR Grocery Retailers Non-Grocery Retailers Store-based Retailing
Source:

2012/17 TOTAL 19.1 65.9 33.3

3.6 10.7 5.9

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 30

Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 20122017

% unit growth 2016/17 Grocery Retailers Non-Grocery Retailers Store-based Retailing


Source:

2012-17 CAGR 0.4 6.0 1.3

2012/17 Total 2.3 34.0 6.6

0.3 5.4 1.2

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 31

Forecast Sales in Non-store Retailing by Channel: Value 2012-2017

Rs bn, retail value rsp excl sales tax 2012 Direct Selling Homeshopping Internet Retailing Vending Non-Store Retailing
Source: Note:

2013 88.4 11.9 107.9 208.2

2014 101.3 12.4 126.7 240.3

2015 114.3 12.8 146.4 273.6

2016 127.7 13.4 167.5 308.5

2017 139.1 13.9 186.2 339.2

76.8 11.5 86.3 174.6

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 32

Forecast Sales in Non-store Retailing by Channel: % Value Growth 20122017

% constant value growth, retail value rsp excl sales tax 2012-17 CAGR Direct Selling 12.6 2012/17 TOTAL 81.0

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Homeshopping Internet Retailing Vending Non-Store Retailing


Source: Note:

4.0 16.6 14.2

21.5 115.6 94.2

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Vending data captures vending systems installed in public and semi-captive environments only. For further details refer to definitions.

Table 33

Forecast Sales in Non-Grocery Retailers by Channel: Value 2012-2017

Rs bn, retail value rsp excl sales tax 2012 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2013 2,868.5 781.1

2014 3,226.0 852.4

2015 3,610.4 929.1

2016 4,036.4 1,009.9

2017 4,473.6 1,095.8

2,549.2 715.1

433.6 614.4 1,880.9

441.9 656.6 2,119.5

455.8 707.1 2,380.9

472.3 764.5 2,659.9

491.7 830.6 2,950.8

512.1 898.4 3,218.5

111.2 30.6 6,335.0

133.9 32.1 7,033.7

160.7 34.1 7,817.0

192.1 36.5 8,664.8

227.0 39.7 9,586.2

266.1 43.2 10,507.7

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 34 outlets

Forecast Non-Grocery Retailers Outlets by Channel: Units 2012-2017

2012 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2013 740,273 70,555

2014 810,599 74,929

2015 885,174 79,050

2016 955,103 83,002

2017 1,026,736 86,737

674,201 66,249

900,330 136,914 160,216

936,491 139,767 176,552

973,528 143,002 193,981

1,009,216 146,741 212,846

1,043,136 151,139 232,872

1,076,680 156,196 252,775

1,076 14,040 1,953,026

1,268 14,335 2,079,241

1,502 14,593 2,212,134

1,784 14,812 2,349,623

2,131 14,975 2,482,358

2,557 15,110 2,616,791

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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Table 35

Forecast Sales in Non-Grocery Retailers by Channel: % Value Growth 20122017

% constant value growth, retail value rsp excl sales tax 2012-17 CAGR Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2012/17 TOTAL 75.5 53.2 18.1 46.2 71.1 139.4 41.4 65.9

11.9 8.9 3.4 7.9 11.3 19.1 7.2 10.7

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 36

Forecast Non-Grocery Retailers Outlets by Channel: % Unit Growth 20122017

% unit growth 2016/17 Apparel Specialist Retailers Electronics and Appliance Specialist Retailers Health and Beauty Specialist Retailers Home and Garden Specialist Retailers Leisure and Personal Goods Specialist Retailers Mixed Retailers Other Non-Grocery Retailers Non-Grocery Retailers
Source:

2012-17 CAGR 8.8 5.5 3.6 2.7 9.5 18.9 1.5 6.0

2012/17 Total 52.3 30.9 19.6 14.1 57.8 137.6 7.6 34.0

7.5 4.5 3.2 3.3 8.5 20.0 0.9 5.4

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

APPENDIX Operating Environment


Foreign direct investment in retail Foreign direct investment in India was allowed for wholesale retailing in 1997 where one required approval from the government. The approval process was made automatic in 2006. This was followed with approval of 100% FDI in single brand retailing in the first quarter of 2012 and 51% in multi-brand retailing along with 49% in aviation in the last quarter of 2012. At the beginning of 2012, the government of India approved 100% foreign direct investment (FDI) in single brand retailing thereby allowing companies such as Prada, Gucci, Louis Vuitton and others to have complete control over their India operations. However, the approval in single brand was passed along with a condition that 30% of all sourcing needs were to be done via

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small and medium domestic companies. In the last quarter of 2012, the government of India also allowed 51% FDI in multi-brand retailing so that international players are allowed to have the controlling partnership once they enter India. The government in power in 2012 is pro-FDI in the country and hence continued to push FDI to be allowed in India till the permission was passed. The government believes FDI in India will be helpful to revive the growth in the economy along with improvement of the fiscal deficit of the country. The primary challenge that international retailers face in entering India is the lack of proper infrastructure facilities in the country such as roads, electricity and internet. Secondly, the local players have a very strong hold in retailing where 95% of total retailing is contributed by independent retailers in the country. To break this hold on retailing by the local players will be extremely challenging for the international players. Thirdly, the rural population who constitute nearly 60% of the total population were not comfortable with modern retailing even in 2012, both grocery and non-grocery, and preferred the local domestic stores. Informal retailing According to a survey by Federation of Indian Chambers of Commerce and Industry (FICCI) estimated counterfeiting and piracy is one of the fastest-growing practices in India especially in consumer electronics and appliance, apparel and footwear, beauty and personal care, tobacco products, consumer health, packaged food and alcoholic beverages. Due to the increased demand for imported and branded products among consumers, informal retailing is also thriving. Media products such as CDs/DVDs for movies and books are the most popular and successful product for informal trading as the cost of manufacturing the pirated versions for these products is low. Pirated CDs/DVDs are available in semi-urban parts of the country. Consumer electronics and appliance specialists, apparel and footwear specialists, personal accessories and eyewear specialists, leisure and personal goods specialists and media products specialists are particularly affected by piracy. This is because consumers are particularly brand-conscious about these products. Informal retailing is prevalent across the country both in urban and semi-urban areas. However, as the awareness regarding brands is higher in urban areas, piracy for consumer electronics and appliances, apparel and footwear, personal accessories and eyewear, leisure and personal goods is higher in cities. However, piracy for movies is rampant in semi-urban and rural areas of the country. Informal retailing attracts and focuses on consumer base of the low to lower-middle economic sections of society. This consumer base has low knowledge regarding the authenticity of brands and how to detect piracy and the need to own brands with minimum expense is high. The government has the following acts: Trademarks Act 1999, Copyright Act 1957, Designs Act, the Geographical Indications Act 1999, Customs Act 1962, Indian Penal Code, the IT Act 2000, Drugs and Cosmetics Act 1940 and a few more in order control piracy and counterfeiting in India. In 2012, Confederation of Indian Industries (CII) hosted the 6th International Conference on Anti-Counterfeiting and Anti-Piracy in order to discuss how to handle the issues and control the problem as much as possible. The Union Government of India in November 2012 assigned Rs20 million in order to control piracy in the audio-visual sector under the 12th Five Year Plan. Opening hours The standard daily operating hours of retailers in India across different states varies between 08:00hrs to 20:00hrs depending on the state and commercial laws. Retailers in metropolitan

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cities such as Bangalore, Delhi and Mumbai tend to be open for longer hours as compared to tier 2 and tier 3 cities. Each state in the country has separate laws for shops/establishments based on the number of people working in the establishment. At any given time, none of the employees are supposed to work for more than 10 hours a day expect on the days of stock replenishing. However, these laws are not followed very stringently and most of the retailers are open seven days week for a minimum of 10 hours. However, independent retailers who contribute nearly 95% of all retailers open and close depending on the requirement of the city and state and in some cases, such as in tier 2 and tier 3 cities, these retailers are open seven days a week from 07:00-23.00hrs. 24-hour retailing exists mainly for chemists/pharmacies in the country. That too is limited to cities and metropolitan areas. A few convenience stores are open 24 hours a day; however, the number of such convenience stores is quite low and restricted to cities. This is likely to change and more retailers, especially modern grocery retailers, will stay open 24 hours a day as the changing lifestyle and job schedules are creating a demand for such retailers in the country. Outlets, both organised and independent, also open on Sundays. However, the working hours are fewer with the independent stores opening later at 9:00-19.00hrs in the evening. Modern grocery retailers such as hypermarkets, supermarkets and convenience stores and non-grocery retailers are open for the same number of hours as the week days. Rural retailers, due to lack of proper infrastructure like electricity and security issues, do not stay open beyond 20.00hrs in most cases. Also, the concept of 24 hour retailing is still not present in the rural parts of the country. As rural Indians tend to start the day early and finish early, many retailers are open from 06.00hrs. Retail landscape Retailing in urban India since 2008 shifted primarily to shopping malls. This resulted in independent retailers facing tough competition from the organised retailers. Non-grocery shopping in India in 2012 was more of a leisure activity done by consumers with family and friends. Especially in places like Delhi and Mumbai where the weather for the majority of the year is very hot, the convenience of shopping for both grocery and non-grocery items along with clean and air-conditioned environment, safe parking and options to eat at the food court after shopping made shopping malls extremely popular in urban India. The shopping malls are located in the main areas in cities like Delhi and Bangalore to area away from the city such as the Delhi-NCR region and Whitefield in Bangalore. In fact, the latter locations are more popular as real estate locations for shopping malls as these areas are firstly cheaper than the main city areas and secondly, larger space is available for building the mall compared to the crowded main city areas. Major shopping malls vary from city to city. Major shopping destinations in the country vary depending on branded and non-branded products. For branded products especially for apparel, footwear, personal accessories and eyewear Mumbai is the most sought-after shopping destination in the country, followed by Delhi and Bangalore. However, for non-branded products popular shopping destination varies from region-specific popularity of products. Luxury retailers are primarily located in expensive shopping malls in urban parts of the country such as UB City in Bangalore and Ambience Mall in Delhi-NCR. The second popular location for luxury retailers is within 5-star hotel compounds where both guests and consumers can purchase products. Traditional retail destinations are becoming smaller with few local independent retailers and the average consumer base being the ones who are physically closer to these destinations.

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Cash and Carry


Organised cash and carry outlets in India are comparatively new and are rapidly gaining popularity in the country. Unorganised wholesalers are present across the country and supply both businesses and consumers with no membership required. However, organised cash and carry retailers are new with Metro Cash & Carry being the first wholesale retailer to enter India in 2003. This was followed by Wal-Mart entering the country along with a 50% partnership with Bharti Airtel in 2009. By 2012, Metro had 16 outlets across the country, Bharti Wal-Mart had 20 outlets, Booker Wholesale and Carrefour had four outlets each that entered India in 2009 and 2010 respectively. Cash and carry outlets in India existed for decades, however, these outlets only catered to business requirements. They are positioned quite low in price compared to normal retailers. The location of the independent wholesalers is generally one huge open market area where one can buy everything at wholesale prices. These market areas are further divided into grocery and non-grocery sections. The organised retailers are located in areas with huge space which is generally available away from the heart of the city. The big cash and carry retailers focussed on tier 2 and tier 3 cities across the country in 2012. Tier 2 cities such as Agra, Meerut, Ludhiana and more are the focus locations to open new stores by the wholesalers. Carrefour opened two new outlets in Meerut and Agra where Metro Cash and Carry was also present. The reason for these locations being sought-after were firstly, most of the tier 2 and tier 3 cities are where companies have their regional offices or manufacturing plants, therefore the corporate clientele is large in these locations and secondly, larger space for the outlet is available. The organised cash and carry companies allow only businesses to purchase products from their stores. One needs to apply for a membership card after producing papers such as business licences, sales tax registration certificate, central excise tax registration certificate, service tax registration certificate and a few other documents. Companies such as Carrefour, Bharti Wal-Mart and Metro Cash & Carry operate completely in business to business manner. They issue a primary main card for one authorised person of the company and 2-3 add-on cards authorised to people from the same company. These companies do not allow membership to consumers and have a pure business to business model of selling their products. However, there are a few independent wholesaler markets in the country such as Sadar Bazar in Delhi, where one can purchase products irrespective of one being a business entity or individual customer. The trend in 2012 will make tier 2 and tier 3 cities the hub of cash and carry companies. These companies will enhance their product stock, number of add-on cards issued and start giving delivery options for companies which are not located near the outlet. In order to survive and perform well, cash and carry companies will have to compete directly with the local wholesalers in the country. The local wholesalers have long-standing links with the independent retailers and hence have an advantage over the organised retailers. However, if the companies increase their private label products which are cheaper than national brands, more retailers will probably start storing these brands in order to earn higher margins. Metro Cash & Carry is the leading cash carry operator in the country with 16 outlets as of 2012. They established their presence with new outlets and also enjoy the first mover advantage in the retail channel in India. The leading cash and carry operators still do not have a lot of competition against each other as there are very few players and large opportunities to grow in the country. As these operators only use the business to business model they are not competing against other retail channels. All the organised cash and carry operators in India up to 2012 were international. They were quite successful in the market and adapted to the local tastes in terms of products stored, the

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promotional techniques in local languages and the staff to help the shop keepers obtain membership. Table 37 Company (NBO) Infiniti Retail Ltd Metro Cash & Carry India Pvt Ltd Bharti Wal-Mart Pvt Ltd Carrefour India Booker India Pvt Ltd
Source: Note:

Cash and Carry: Number of Outlets by National Brand Owner: 2009-2012 Brand(s) Woolworths Metro Best Price Modern Carrefour Booker 2009 4 5 1 2010 6 5 5 1 1 2011 6 12 17 1 2 2012 6 16 20 4 4

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources Sales value excludes VAT, sales tax

DEFINITIONS
This report analyses the market for Retailing in India. For the purposes of the study, the market has been defined as follows: Store-based retailing Grocery retailers Modern grocery retailers Convenience stores Discounters Forecourt retailers: Chained forecourt retailers; Independent forecourt retailers Hypermarkets Supermarkets Traditional grocery retailers Independent small grocers Food/drink/tobacco specialists Other grocery retailers Non-grocery retailers Apparel specialist retailers Electronics and appliance specialist retailers Health and beauty specialist retailers Chemists/pharmacies Parapharmacies/drugstores Beauty specialist retailers Other healthcare specialist retailers Home and garden specialist retailers Furniture and homewares stores Home improvement and gardening stores Leisure and personal goods specialist retailers Jewellery and watch specialist retailers Media product stores Pet shops and superstores

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Sports goods stores Stationers/office supply stores Traditional toys and games stores Other leisure and personal goods specialist retailers Mixed retailers Department stores Variety stores Mass merchandisers Warehouse clubs Other non-grocery retailers Non-store retailing Vending Homeshopping Internet retailing Direct selling Explanations of words and/or terminology used in this report are as follows: Enter local word/terminology and explanation Other terminology: GBO refers to global brand owner, which is the ultimate owner of a brand. NBO refers to national brand owner, which is the company licensed to distribute a brand on behalf of a GBO. The NBO may be a subsidiary of a GBO or it may be a completely separate company. Share tables at both GBO and at NBO level are provided in the report. Reference to shares in the report analysis is at NBO level.

SOURCES
Sources used during the research included the following: Summary 1 Research Sources Official Sources Trade Associations

Ministry of Statistics & Programme Implementation Clothing Manufacturers' Association of India, The Indian Direct Selling Association Internet & Mobile Association of India (IAMAI) Retail Association of India Retailers Association of India

Trade Press

Business Standard Domain B E Retail Biz Economic Times, The Equity Master, The Financial Express Food & Beverage News

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Hindu Business Line ICICI Direct IIFL Images Retail India Retail News India Retailing IndiaRetailBiz Inside Franchising Money Control Nam News News 4 sites News Vision Newsvision Retail Report Pitch Retail Angle Retail Yatra Retailbiz Retailing 360 Telegraph
Source: Euromonitor International

Euromonitor International