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About Big Bazaar

About Big Bazaar Hypermarket
Chain of Departmental Stores
Outlet 100 outlets in India
Located in 70 Cities
Parent group Pantaloon Retail Group (PRIL)
Subsidary of Future Group
Owner Kishore Biyani
Founded 2001
Headquarter Jogeshwari, Mumbai
Industry Retail
Website www.bigbazar.com
‘is se sasta aur achha kahin
Tag Line nahi’
 Main Features
 Understanding needs of Indian
Consumers
 Traditional bazaar ambience
 Create a Shopping experience
 Low Pricing of products
 Value for your Money
 Cater to every possible retail need of a
consumer
 Economies of Scale
 Products
Food

Apparels Farm
Products
Child Care
and Toys
Furniture Chill
Station
Other
Services
Fashion Home and
and Personal
Jewellery Electronics Care
 PRIL Profit and Loss
Statement
Fiscal Year Ending
June 30 2001 2002 2003 2004 2005
(USD millions)

Total Net Sales 41.65 65.80 102.54 151.78 250.41

Percent increase 58% 56% 48% 65%

EBITD 3.39 5.29 8.79 13.15 20.90

PRIL Balance Sheet
Walmart Statistics
 Traditional Retailing in India
• In 2005,Indian Retail Market was
world’s eighth largest and
represented 33.3% of Indian GDP.
• It was valued at $250 Billion and
projected to grow by more that 7%
annually
• India had over 12 million retail
outlets – more than the rest of the
world combined
 Traditional Retail Mix
• Traditional retailers dominated the
industry as it was highly fragmented.
• In 2003, 82% of the retail sales were
made through the local “kirana”
stores, small local and family
businesses
• They were a success because of their
location, low prices and offered
credits and the personal touch
factors
 Traditional Retail

Traditional Outlets

Proximity to Low Prices Personal Touch

Consume homes Credit Facilities Factors
 Modern Supermarkets
• The Retail supermarkets and hypermarket had
only 0.4% - 3.5% share of the retail sales in 2003
- 2005.
• Even though there was high volume of foot traffic
the conversion ratio was less than 5% which lead
to store closure due to high rentals.
• With the government easing restrictions on the
FDI, it became easier to import consumer goods
which added more variety to the Indian market.
• Still a long way to go due constraints of complex
taxes, high supply chain cost, infrastructure
problems, inflexible labor laws.
 FOREIGN DIRECT INVESTMENT
• Economic reforms in 1990 fueled growth as Govt
implemented broad liberalization policies relating to
imports and FDIs.
• GDP grew faster which stimulated increased demand for
consumer goods in rich and middleclass – leading to retail
sector growth.
• As a result, Foreign retailers entered India and began
expanding their operations
• Domestic retail community grew concerned as the new
competition would result in job losses and closures hence
-lobbied against FDI’s.
• Government banned FDI in 1997 but left loopholes which
allowed foreign retailers to enter Indian markets. Ex –
Macdonalds, M&S
FDI continued..
• In Feb – 2005 Indian Govt. passed 100%
FDI in construction and development
sector – paving the way for the foreign
investments to develop shopping malls
and warehouses.
• A year later, the cabinet approved policy
allowing “Single Brand” retailers to
operate.
• Analyst believe that entry of foreign
retailers is just a matter of time citing
2005 – 2009 as a window of opportunity
for domestic retailers to shape up
 MODERN RETAILING INDIA

Life style format

• Consisted of department stores and

single brand outlets and franchises
which sold “aspirational” merchandise

Value retail format

• Includes hypermarkets, food

supermarkets and discount retailers
who focused on offering low prices.
 STRUCTURE OF INDIAN RETAIL

•All Organized stores accounts for less than 2%.

•Big Bazaar Innovative promotions allowed Big Bazaar to draw in

consumers who had not yet shopped at organized retailers.

•Big Bazaar also organize its Big Day specially on local religious
festivals to provide look and feel of organized stores for aspirational
consumers
 COMPONENTS OF US$ 250
BILLION RETAIL MARKET

In August, 2005, PRIL management noted same store growth of 30% in the
value retailing segment and 19% in the lifestyle

In march 2006, PRIL sold merchandise in 5 segments fashion, food, general

merchandise, leisure and entertainment. Fashion was the company’s leading
category and accounted 50% of its revenue
 OWNERS OF US$ 250 BILLION
MARKET

PRIL respond’s to the market with their well diverse retail portfolio consists of
four retail category : department stores, discount hypermarkets, grocery stores
and seamless malls.
• Pantaloons
“High fashion” family department, geared toward
Indian middle and upper classes. In 2005,
pantaloons rolled out a new merchandise and
brand communication campaign to position itself
as fashion trendsetter appeal to India’s youth.
• Central Mall
Positioned as destination where consumers could
“shop, eat and celebrate.
• Big Bazaar
In 2007, PRIL debuted its Big Bazaar hypermarket
concept, designed to blend elements of a typical
Indian bazaar with modern retailing features such
as parking, and air conditional shopping
environment and merchandise return privileges.
• Food Bazaar
Food Bazaar, a grocery retailer, opened its first
outlet in June 2002, within a Big Bazaar store, six
month later the chain had grown to 42 outlets: 18
stand alones.
 SHOPPING AT BIG BAZAAR

• Pantaloon considered itself a “Class-less” retailer,

appealing to all demographic and socio-economic
types.

• The average consumer at a Big Bazaar store

spent roughly $8 per visit and took around an
hour to complete the transaction

• With rising incomes, hectic lives, and often dual

career households, Indian families are frequently
constrained for times and want a no-hassle
shopping experience

• The management uses innovative promotions to

•Attractive tag lines like “Umeed se dugna” , “pahela
sasta, doosra usse bhi sasta” and “Joona do, naya lo”
are used to attract more aspirational consumers

•Pantaloons vision is to capture as much share of the

customer’s wallet as possible by retailing.
 Is Retail in India at the
crossroads?

“The Indian consumer is not yet ready for a store with clean linear layouts”,
Kishore Biyani, Owner Bigbaazar, Pantaloon group.

“We have to convince the consumer that we understand his or her needs the
way the neighborhood retail does” Arvind singhal of Technopak, a retail
consultancy.
 MANAGING SUPPLY CHAIN FOR
PACKAGED CONSUMER GOODS AT
FOOD BAZAAR

•Food bazaar stores were located within

big bazaar stores occupying 15,000 sqf
in a 50,000 sqf store

•Biyani thought that Food bazaar & Big

bazaar were the crown jewels In PRIL’s
portfolio
Aggressive growth –Food bazaar

Company planned to grow to over

100 FB stores by 2008 and annual
revenues of $350 million

•To rent properties from shop owners in

exchange of profits generated from
store

•purchase food grains directly from

manufactures

•to develop private label brands and

devote 60 % shelf space to it.
TRADITIONAL SUPPLY CHAIN-FMCG
FACTORY •LOCAL ENTREPRENEUR
•INTERFACE BETWEEN
STATE GOVT &
•4.75% margin MANUFACTURER
for traditional C & F AGENT •1% COMPANY SALES
retailer /TON
•Net margin of
0.5% DISTRIBUTO
R

Wholesal Modern
Large
er trade
retailer
retailer
8% 15%
gross gross
Small margin margin
retailer
Adv of traditional supply chain for
food bazaar

•Distributors did not impose on

minimum order quantity and shipments
were made in small batches

•Oder quantity could be changed a day

or two in advance of delivery

•For premium products ,Food bazaar

received
1%-2%of sales – DISPLAY INCOME
4% - DISCOUNT FROM
MANUFACTURE
3% - DISCOUNT FROM DISTRIBUTOR
 Shroff concern....

•In case of a Product-specific promotion,

volumes would swamp a distributors
capabilities

•Wall mart & Reliance were likely to

enter market with modern supply chain
•(Reliance to invest $2.2 in billion hyper
markets with
•60 supply centres)

•Project is expensive and financial returns

are uncertain
•Cannot achieve economics of scale by
operating in diff states
•Biyani likely to remain loyal to TSC
 Charting the Future
• Creator, Preserver & Destroyer

• SWOT Analysis

• Organizational Life Cycle

• Organizational / Customer Value Matrix

• 4P Market Mix

• Future Challenges . .
SWOT Analysis of Big
STRENGTH
Bazaar
•High Brand Equity in WEAKNESS
•Unable to meet store
evolving retails markets
•State-of-art infrastructure opening target so far
•Falling revenue per
of Big Bazaar outlets
•POP to increase the square feet
purchase
•One stop shop for variety
of products, increasing
customer time and
available choices
THREAT
OPPORTUNITY •Competitors, global big
•Organized retail is just
players planning to
4.15%of total pie of
foray into market
Indian retail market •Unorganized retail
•Evolving Customer
market of India
preferences in recent •Government policies
years
are not well-defined in
India
 Life Cycle

INTRODUCTORY GROWTH STAGE MATURITY DECLINE

STAGE STAGE STAGE

TOTAL MARKET
SALES
S
A
L
E
S

TIME
Organization Value & Customer
Value Matrix

•High •High
Organization Organization
Value Value
•Low Customer •High Customer
Value Value

•Low •Low
Organization Organization
Value Value
•Low Customer •Low Customer
Value Value
 4P Marketing Mix
Product
Offers wide range of products, range from
apparels, food, farm products, furniture,
child care, toys, etc.
All Major Brands
Fashion, electronics and travel segments
made up about 70% of sales.
Many In-house brands promoted by Big
Bazaar.
 4P Marketing Mix Contd..
Price
Economics of scale
Pricing objective is to get "Maximum Market Share”
Value Pricing
• EDLP - Every Day Low Pricing
Promises consumers the lowest available price

Differentiated Pricing:
• Time pricing, i.e., difference in rate based on peak and
non-peak hours or days of shopping

Bundling:
• Combo-packs
• Value to customer.
 4P Marketing Mix Contd..
• Promotional
Pricing:
Psychological
discounting (Rs.
99, Rs. 49, etc.)
Special Event
Pricing (Close to
Diwali, Gudi Padva,
and Durga Pooja)
 4P Marketing Mix Contd..
Place
• Stores are located in 50 cities and 100 stores in
operation
• Presence in almost all the major Indian Cities.
Aggressive on their expansion plans.
Promotion
• New and innovative cross-sell and up-sell
strategies in Indian retail market.
• Future Card (the card offers 3% discount)
• Endorsement by M. S. Dhoni
• Point-of-Purchase Promotions.
• Advertising in Print media, TV, Radio (FM) and
Road-Side Bill-Boards.
 Promotion..
• “Is se sasta aur accha kahin nahi ”

• “Umeed se duguna”

• “pehla sasta, doosra usse bhi sastaa”

• “Joona do naya lo”

• “Saal ka sabse sasta 3 din”- Republic

Day Promotion
“Joona Do, Naya Lo”
 “Sabse Saste 3 Din”
Republic Day Sales Images
25-26-27 Jan 2006
 Future Challanges
• Need Infrastructure Development,
Own Logistic Solutions
• Global Big Players and Competitors
Planning to foray into Market
Bharti-Wal-Mart, Carrefour is all set to
gain its foothold in India
• Government Regulations and
Taxation
FDI, Taxes & Duties
 Preparing For Future
• Endless Opportunities to Serve Indian
Market
India's retail market is forecast to double
in another six years from the current $375
billion
• Introduced Management Training
Programme in Retailing for
Employees
• Lack of Malls problem is being taken
care of by Property Funds managed
by PRIL
 Questions!!!
• Should he slow down?

• Should he focus on the company and

let a few retail opportunities go by?

• Should he let the momentum propel

him forward?