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The Indian retail industry has emerged as one of the most dynamic and fastpaced industries due to the entry of several new players. It accounts for over
10 per cent of the countrys Gross Domestic Product (GDP) and around 8 per
cent of the employment. India is the worlds fifth-largest global destination in
the retail space.
Market Size:
Indias retail market is expected to nearly double to US$ 1 trillion by 2020
from US$ 600 billion in 2015#, driven by income growth, urbanisation and
attitudinal shifts.While the overall retail market is expected to grow at 12 per
cent per annum, modern trade would expand twice as fast at 20 per cent per
annum and traditional trade at 10 per cent#.
Indias Business to Business (B2B) e-commerce market is expected to reach
US$ 700 billion by 2020 whereas the Business to Consumer (B2C) ecommerce market is expected to reach US$ 102 billion by 2020.## Online
retail is expected to be at par with the physical stores in the next five years.
India is expected to become the worlds fastest growing e-commerce market,
driven by robust investment in the sector and rapid increase in the number
of internet users. Various agencies have high expectations about growth of
Indian e-commerce markets. Indian e-commerce sales are expected to reach
US$ 120 billion! by 2020 from US$ 30 billion in FY2016.Further, India's ecommerce market is expected to reach US$ 220 billion in terms of gross
merchandise value (GMV) and 530 million shoppers by 2025, led by faster
speeds on reliable telecom networks, faster adoption of online services and
better variety as well as convenience@.
Indias direct selling industry is expected to reach a size of Rs 23,654 crore
(US$ 3.51 billion) by FY2019-20, as per a joint report by India Direct Selling
Association (IDSA) and PHD.
Investment Scenario:
The Indian retail trading has received Foreign Direct Investment (FDI) equity
inflows totaling US$ 537.61 million during April 2000March 2016, according
to the Department of Industrial Policies and Promotion (DIPP).
With the rising need for consumer goods in different sectors including
consumer electronics and home appliances, many companies have invested
in the Indian retail space in the past few months.
Amazon India has opened six new fulfillment centres across Chennai,
Coimbatore, Delhi, Jaipur and Mumbai, which will open up 5.5 million
square feet of storage space for sellers on the marketplace who use
the Fulfilled by Amazon service.
Aditya Birla Fashion and Retail Limited (ABFRL) has announced that it
will acquire exclusive online and offline rights of Forever 21, an
American fast fashion brand, in the Indian market.
Amazon India expanded its logistics footprint three times to more than
2,100 cities and towns in 2015, as Amazon.com invested more than
US$ 700 million in its India operations since July 2014.
Adidas AG, reknowned for its Adidas and Reebok sports brands, has
become the first foreign sports company to get government approval
to open 100 per cent foreign-owned stores in India.
Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and
the fourth-largest supermarket retailer in the country, acquired Total
hypermarkets owned by Jubilant Retail.
Government Initiatives:
The Government of India has taken various initiatives to improve the retail
industry in India.
Group Vision:
Future Group shall deliver Everything, Everywhere, Every time for Every
Indian Consumer in the most profitable manner.
Group Mission:
Future Group shares the vision and belief that their customers and
stakeholders shall be served only by creating and executing future scenarios
in the consumption space leading to economic development.
Core Values:
Indian ness: Confidence in themselves.
Leadership: To be a leader, both in thought and business.
Respect and Humility: To respect every individual and be humble in their
conduct.
Introspection: Leading to purposeful thinking.
Openness: To be open and receptive to new ideas, knowledge and
information.
Valuing and Nurturing Relationships: To build long-term relationships.
Simplicity and Positivity: Simplicity and positivity in their thought,
business and action.
Adaptability: To be flexible and adaptable, to meet challenges.
Flow: To respect and understand the universal laws of nature.
Company overview:
Security check: At each exit of Big Bazaar, they use alarm systems or
Electronic Article Surveillance system, which detects the products that has
attached tags or not.
Organized Retailing:
Organized retailing got a leg up during 2004 with the opening of new format
stores, rapid growth of existing players, start-up of new generation shopping
malls, the Governments intention of allowing a certain level of foreign direct
investment in retail and the formation of the a retailers association. With
consumer sentiment positive during most of 2004, it led to substantial
spending across a number of categories such as consumer durables, clothing
and lifestyle, automobiles and telecom product. At the beginning of this
decade, organized retailing account for a mere $2.9 billion in India. This is
only 1.25 percent of the estimate total retail market. This share has already
grown to 2 percent. Growth projections for retail business vary widely. Some
studies estimated that by 2007, the share of organized retail in the retail pie
will jump three times to reach 5-6 percent.
Retail in India largest industry accounting for over 10% of the country GDP
and around 8% of the employment. Retail industry in India is at the cross
road. It has emerged as one of the most dynamic and fast paced industries
with several player entering the market. The future is promising the market
is growing government policies are becoming more favorable and emerging
technology and facilitating operations.
Some key facts retail in India largest industry accounting accounting for over
10% of the country GDP and around 8% of the employment.
Target customers:
Big Bazaar targets higher and upper middle class customers because there
has been growth in Indian middle class that has so far been used to buying
apparel and groceries from small and cluttered neighborhood market shops
is fast realizing the joys of visiting malls that have redefined the freedom to
shop and entertain. Such malls are the new temples of leisure and weekend
entertainment. Indias National Council for Applied Economic Research
estimates that the nations middle class population currently comprises
about 17 million households 90 million people with annual earnings
ranging between $4,500 (2,400) and $22,000 (11,736). An additional 287
million could be termed as aspirers or those that hope to join the middle
class in the near term. Rising incomes, particularly in the lower and middleincome households, are impacting retail growth in India as these groups tend
to spend more on upgrading and diversifying their lifestyles, eating out and
moving on to processed and convenience foods.
Product:- Big Bazaar offers a wide range of products which range from
apparels, food, farm products, furniture, child care, toys, etc. of various
brands like Levis, Allen Solly, Pepsi, Coca-Cola, HUL, ITC, P&G, LG, Samsung,
Nokia, HP etc. Big Bazaar also promotes a number of in house brands like:1.DJ&C
2.TastyTreat
3.CleanMate
4.Sensei
5.Care Mate
6.Koryoand44otherbrands.
at
Big
Bazaar
is
based
on
the
following
techniques:-
Value Pricing ( EDLP Every Day Low pricing ):- Big Bazaar promises
consumers the lowest vailable price without coupon clipping, waiting for
discount promotions, or comparison shopping
Promotional Pricing:- Big Bazaar offers financing at low interest rate. The
concept of psychological discounting ( Rs.99, Rs.49, etc. ) is also used to
attract customers. Big Bazaar also caters on Special Event Pricing ( Close to
Diwali, Gudi Padva and Durga Pooja ).
Differentiated Pricing:- Differentiated pricing, i.e., difference in rate based
on peak and non-peak hours or days of shopping is also a pricing technique
used in Indian retail, which is aggressively used by Big Bazaar. For example,
Wednesday Bazaar.
Bundling :- It refers to selling combo-packs and offering discount to
customers. The combo-packs add value to customer and lead to increased
sales. Big Bazaar lays a lot of importance on bundling. For example 3 Good
Day family packs at Rs.60 ( Price of 1 pack = Rs.22 ), 5 kg oil + 5 kg rice + 5
kg sugar for Rs.599.
Place:- The Big Bazaar stores are operational across three formats
hypermarkets spread over 40,000 - 45,000 sq.ft. , the Express format over
15,000 - 20,000 sq.ft. and the Super Centers set up over 1 lakh sq.ft.
Currently Big Bazaar operates in over 34 cities and towns across India with
116 stores. Apart from the metros these stores are also doing well in the tier
II cities. These stores are normally located in high traffic areas. Big Bazaar
aims at starting stores in developing areas to take an early advantage before
the
real estate value booms. Mr. Biyani is planning to invest around Rs.350
crores over the next one year expansion of Big Bazaar. In order to gain a
competitive advantage Big Bazaar has also launched a website
www.futurebazaar.com, which helps customers to orders products online
which will be delivered to their doorstep. This helps in saving a lot of time of
its customers.
Promotion:- The various promotion schemes used at Big Bazaar include:1. Saal ke sabse saste 3 din.
2. Hafte ka sabse sasta din Wednesday bazaar.
3. Exchange Offers Junk swap offer.
4. Future card ( 3% discount ).
5. Shakti card.
6. Advertisement ( print ad, TV ad, radio ).
7. Brand endorsement by M S Dhoni and Asin.
8. Big Bazaar has come up with 3 catchy lines written on hoardings taking on
biggies like Westside, Shoppers stop and Lifestyle. They are:a) Keep West - aSide. Make a smart choice!
b) Shoppers! Stop. Make a smart choice!
c) Change your Lifestyle. Make a smart choice!
People:1. Well trained staff at stores to help people with their purchases.
2. Employ close to 10,000 people and employ around 500 more per month.
3. Well - dressed staff improves the overall appearance of store.
4. Use scenario planning as a tool for quick decision making multiple
counters for
payment, staff at store to keep baggage and security guards at every gate,
makes
for a customer friendly atmosphere.
Process:- Big Bazaar places a lot of importance on the process right from
the purchase to the delivery of goods. When customers enter the stores they
can add the products they which to purchase in their trolley from the racks.
There are multiple counters where bill can be generated for purchases made.
Big Bazaar also provides delivery of products over purchases of Rs.1000.
Physical Evidence:- Products in Big Bazaar are properly stacked in
appropriate racks. There are different departments in the store which display
similar kind of products. Throughout the store there are boards/written
displays put up which help in identifying the location of a product. Moreover
boards are put up above the products which give information about the
products, its price and offers. Big Bazaar stores are normally U shaped and
well planned & designed.
usual
price
Expectations And Consumers Satisfaction:Expectations are beliefs (likelihood or probability) that a product/service
(containing certain attributes, features or characteristics) will produce certain
outcomes (benefits values) given certain anticipated levels of performance
based on previous affective, cognitive, and behavioral experiences.
Expectations are often seen as related to satisfaction and can be measured
as follows:1. IMPORTANCE:- Value of the product/service fulfilling the expectation.
2. OVERALL AFFECT-SATISFACTION EXPECTATIONS:- Like/Dislike of
the product/service.
3. FULFILLMENT OF EXPECTATIONS:- The expected level of
performance vs. the desired expectations. This is Predictive
Fulfillment and is a respondent-specific index of the performance level
necessary to satisfy.
4.EXPECTED VALUE FROM USE:- Satisfaction is often determined by
the frequency of use. If a product/service is not used as often as
expected, the result may not be as satisfying as anticipated. For
example a motorcycle that sits in the garage, an unused year
subscription to the local fitness center/gym, or a little used season
pass to a ski resort would produce more dissatisfaction with the
decision to purchase than with the actual product/service.
3. Maha Bachat: - Maha Bachat was started off in 2006 as a single day
campaign with attractive promotional offers across all Big Bazaar stores. Over
the years it has grown into a 6 days bi-annual campaign. It has attractive offer
sin All its value formats such as Big Bazaar, Food Bazaar, Electronic Bazaar
and Furniture Bazaar - catering to the entire needs of a consumer.
4.
The Great Exchange Offer: - On February 12, 2009 Big Bazaar launched
The Great Exchange Offer", through which the customers can exchange their old
goods In for Big Bazaar coupons. Later, consumers can redeem these coupons
for brand New goods across the nation.
Retention Strategy:
Big Bazaar strive to foster a feeling of well-being in their employees
through care and respect, BigBazaar have several structured processes
including employee mentoring and grievance management programmers
which are intended to facilitate a friendly and cohesive organization
culture. O -site activities are encouraged to improve interpersonal
relationship. Big Bazaar also acknowledge the e orts exerted by their
employees by organization an annual celebration called 'Pantaloons Day'
where Big Bazaar recognize employees who have shown exceptional
talent, sincerity .
Pay-back Card: - At Future Group Big Bazaar, we believe in building longlasting relationships with customers. We encourage repeat customer visits
through our unique offers and special sale days. Future Group has taken the
whole concept of
Customer loyalty to the next level by joining hands with PAYBACK. PAYBACK
is Indias largest and one of Europes most successful multi-partner loyalty
programs. With PAYBACK, customers can shop, save and get rewarded. This
program enables consumers to collect millions of points across online and
offline partners with just a single card. Customers can accumulate points
across Future Group formats, thereby making shopping rewarding. Our
formats Big Bazaar, Food Bazaar, Pantaloons, Central, Home Town, zone,
Brand Factory and Future Bazaar are a part of the PAYBACK loyalty program.
T24 Program: - T24 will provide customers with a dual advantage all 24
hours of the day - Shop More, Talk More and Talk More, Shop More.
Shopping and talking on our mobile phones are among the two favorite
activities for all of us in India. With T24, we have been able to develop a
unique customer value proposition that combines these interests of the
aspirational Indian. Customers will get shopping benefits for talking and
talk-time benefits each time they shop. We believe that with our partners,
Tata Teleservices Limited, we have been able to develop a differentiated
offering in the crowded telecom space and also increase the loyalty we
enjoy among the millions of customers who patronize our stores. T24 ( Talk
24 ) tariff plans reflect the competitive per-second rates being offered for
pre-paid customers on Tata Teleservices Limiteds GSM network. In
addition,
marketing
to
greater
agency
accountability,
12.
Carefully linked
reminders, updated
messages
also
help
buyers
by giving
timely
During the year we added 102 new stores covering 1.5 million square feet of
space and expanded our presence in more than 100 cities across the country.
The total number of customer visits during the year touched 204 million and
same store sales growth in value retailing was 10.2% while in home retailing
was 9.1%.
While business was growing, so has been the profitability. Over the past nine
quarters, both gross margins and operating margins has shown a significant
and consistent improvement. Operating margins have grown from 7.7% to
11% during this period, while gross margins have gained 390 basis points to
28.5%. This has resulted in our EBIDTA growing by
29% during this financial year to ` 1143 crore from 12 months of previous
financial year.
I am also happy to share that not only our standalone retail business, but also
our key subsidiary and joint ventures showed steady transformation and have
Started yielding financial returns. Leading the pack among the non-listed
entities is our general insurance joint venture that posted a net profit of
` 60 crore and our supply chain subsidiary that posted a net profit of ` 25
crore.
As we look ahead, we are sure that we will still pursue growth, we will still aim
for audacious growth, but profitable growth. For us, growth from now on will
be disciplined growth. Growth from now on will come from playing on our
strengths. Growth not just from adding space but from a judicious mix of
organic and inorganic growth. Growth will come from partnerships, from
allocating resources in the optimum manner that generates higher return on
capital. We have created the plinth and the foundation. Every stage of growth
from now on will create incremental returns.