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PRESENTATION ON

BIG BAZAAR

Presentation by

-Gurdeep Singh

-Pushpak Pandey

-Shaleen Agarwal

-Rohan Tandon

-Richa Kohli

Agenda

Retailing : An overview

Indian retail

The change factor

FDI in Indian retailing

Why FDI ?

How FDI ?

Big Bazaar- Company Profile

- Customer Segment

- Vision and Mission

- Swot analysis

- BCG Matrix

- Porter 5 Forces Model

Retailing: An overview

An overview

Retailing

World’s largest private industry

US$ 6.6 trillion sales annually

Fortune 100

9 Retailers

Carrefour, Ahold, Home Depot, Kroger,

Metro, Kmart-

Sears, Target, Albertsons’

Indian Retailing

Largest employer after agriculture - 8%* of population

Highest outlet density in world

Around 12 mn outlets

Still evolving as an industry

Long way to go

Evolution of Indian retail

Historic/Rural

Reach

Traditional/Pervasiv e Reach

Government

Supported

Modern Formats/

International

Exclusive Brand

Outlets

Hyper/Super Markets

Department Stores

Shopping Malls

Khadi Stores

Cooperatives

Weekly Markets

Village Fairs

Melas

Source of

Entertainment

Convenience Stores

Mom and

Pop/Kiranas

Neighborhood

Stores/Convenience

Availability/ Low

Costs /

Distribution

Shopping

Experience/Efficiency

Evolution of Indian retail

Informal retailing Sector

Typically small retailers.

Evasion of taxes

Difficulty in enforcing tax collection mechanisms

No monitoring of labor laws

Indian retail

Formal Retailing Sector

Typically large retailers

Greater mechanisms enforcement of

High level of labor usage monitoring taxation

Categories of Indian retail

Indian retail

Corporate Houses

Tatas: Tata Trent

RPG group: Food World, Health and

Glow, etc

ITC: Wills Life Style

Rahejas(ShoppersStop),

Hiranandani(Haiko), DLF(DT cinemas) etc.

Dedicated brand outlets

Nike, Reebok, Zodiac etc

Multi-brand outlets

Vijay Sales, Viveks etc

Manufacturers/ Exporters

Pantaloons, Bata, Weekender

Classifying Indian retail

Indian retail

Modern Format retailers

Supermarkets

Hypermarkets

Department Stores

Specialty Chains

(Foodworld)

(Big Bazaar)

(S Stop)

(Ikea)

Company Owned Company Operated

Traditional Format Retailers

Kiranas: Traditional Mom and Pop Stores

Kiosks

Street Markets

Exclusive /Multiple Brand Outlets

Large Indian retailers

Indian retailers

Hypermarket

Big Bazaar

Giants

Shoprite

Star

Department store

Lifestyle

Pantaloons

Piramyds

Shoppers Stop

Trent

Entertainment

Fame Adlabs

Fun Republic

Inox

PVR

The changing Indian consumer

Indian consumer

Greater per capita income

Increase in disposable income of middle class households

20.9%* growth in real disposable income in

’99-’03.

Growing high and middle income population

Growing at a pace of over 10%* per annum over last decade

Affordability growth

Falling interest rates

Easier consumer credit

Greater variety and quality at all price points

†From Euromonitor Retail Survey

The changing Indian consumer

The urban consumer

Getting exposed to international lifestyles

Inclined to acquiring asset

More discerning and demanding than ever

Indian consumer

No longer need-based shopping

Shopping is a family experience

Changing Mindset

Increasing tendency to spend

Post Liberalization children coming of age

100 mn 17-21 year olds*. Tend to spend freely.

Greater levels of education

*Data from NCAER

Anticipated growth

Anticipated growth

Market size

Current market size is roughly US$ 286 bn*

96% of the 12 Million stores are less than 500

Sq. ft.

Forecast Growth rate for the retailing industry is roughly 8.3% for 2003-2008

Sales from large format stores would rise by

24-49%**

Formal and modern format retailing would enjoy rapid growth

Industry dynamics

Low domestic competition

Because of fragmented nature of industry

Industry dynamics

Lack of exposure to global best practices

Low entry barriers for unorganized retailing

Moderate retailing entry barriers for organized

Wholesale system under-invested leading to

20-40% wastage

Non level playing field issues

Wide differences in treatment of small and large retailers

Industry dynamics

issues

Real Estate Costs

Supply Chain Inconsistency

Poor Infrastructure

Lack of Skilled Manpower

Growth factors

Growth factors

Growth determining factors

Government Policy

Infrastructure development

GDP growth

Employment generation and job creation

In several new sunrise industries

Implies greater purchasing power

The Indian advantage

Advantage

India

India ranked 1 st in the Global A.T Kearney

Retail Development Index

India

Russia

China

THE SIZE OF THE OPPORTUNITY

Products

Food & Grocery

Textiles & Apparel

Jewelry & Watches

Consumer durables

Pharmaceuticals

Home Solutions

Books, Music & Gifts

Others

Total

Total Retail

Rs. Billion

6422

980

554

415

364

351

115

1159

10360

Organised

Retail

Rs. Billion

50

185

30

43

10

32

15

111

476

Organised

Retail as % of Total

1

19

5

10

3

9

13

10

5

FDI in Indian retailing

FDI in Retail not permitted

Current Indian FDI Regime

FDI not permitted in retail trade sector, except in:

Private labels requiring

Hi-Tech items / items specialized after sales service

Medical and diagnostic items

Items sourced from the Indian small sector (manufactured with technology provided by the foreign collaborator)

For 2 year test marketing (simultaneous commencement of investment in manufacturing facility required)

FDI in Indian retailing

Metro Group of Germany

Cash-and-carry wholesale trading

Proposal faced strong opposition

Current FDI

Entities established prior to 1997

Allowed to continue with their existing foreign equity components.

No FDI restrictions in the retail sector pre-

1997

Foodworld

51:49 JV between RPG and Dairy Farm

International,

Leading food retailer in India now

Mc Donalds

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Hypermarket

The chain of retail stores of the

Pantaloon Retail

(India) Ltd.

89 outlets in India

Headquarter in

Mumbai

Focusing on Value of Money

COMPANY PROFILE

Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India’s leading business houses with multiple businesses spanning across the consumption space. While retail forms the core business activity of Future Group, group subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics.

Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square feet of retail space in 71 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloon

Retail employs around 30,000 people and is listed on the Indian stock exchanges. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In the value segment, its marquee brand, Big

Bazaar is a hypermarket format that combines the look, touch and feel of

Indian bazaars with the choice and convenience of modern retail.

In 2008, Big Bazaar opened its 100th store, marking the fastest ever organic expansion of a hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, Hyderabad and Bangalore.

• The group’s speciality retail formats include, books and music chain,

Depot, sportswear retailer, Planet Sports, electronics retailer, eZone, home improvement chain, Home Town and rural retail chain, Aadhaar, among others. It also operates popular shopping portal.

• Future Capital Holdings, the group’s financial arm provides investment advisory to assets worth over $1 billion that are being invested in consumer brands and companies, real estate, hotels and logistics. It also operates a consumer finance arm with branches in 150 locations.

Customer Segment

• Big Bazaar target to upper middle class and higher customers.

• The large and growing young working population is a preferred customer segment.

• Big Bazaar specially target working women and home maker who are the primary decision maker.

Mission & Vision

• Future Group shall deliver Everything, everywhere, every time for every Indian

Consumer in the most profitable manner.

• We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development

SWOT ANALYSIS

STRENGTHS

• EVERY DAY LOW PRICING

• GOOD INFRASTRUCTURE

• CONSUMER PREFERENCES

• DIVERSE MARKET COVERAGE

• AWRENESS ABOUT THE BRAND HIGH AMONG

MASSES

OPPORTUNITIES

• SUB URBAN UNTAPPED MARKET

• “ONE STOP” CONCEPT UNKNOWN YET

• EVOLVING CONSUMER ORIENTATION

• CO BRANDING AND FRANCHISING FOR

FASTER GROWTH

SWOT ANALYSIS

WEAKNESS

• LOW PERCEPTION AMONG CONSUMERS

• LESS AVAILABILITY OF STORES

• SUPPLY CHAIN BOTTLENECKS-

(FRAGMENTED MARKETS)

THREATS

• NEW ENTRANTS AND FOREIGN PLAYERS

• UNORGANISED RETAIL MARKET

5 FORCES PORTER MODEL

RIVALRY AMONG COMPETITORS

• RELIANCE,MORE,VISHAL,NEXT,SPENCERS

NEW ENTRANTS

• WALMART,CARREFOUR,METRO,IKEA

• FOREIGN PLAYERS ALLOWED TO SOME

EXTENT

BARGAINING POWER OF SUPPLIERS

• SUPPLIERS HAVE A HUGE UNORGANISED

SECTOR TO CATER TO

Contd…

BARGAINING POWER OF

CONSUMERS

• PRICE SENSITIVE CONSUMERS

• MORE AVAILABLE CHOICES

THREAT OF SUBSITUTES

• UNORGANIZED RETAIL

BCG MATRIX

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MARKETING

7 P

s ANALYSIS

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PRICING

§

Value Pricing (EDLP)

§

Promotional Pricing

Low Interest Pricing

Psychological Pricing

Special Event Pricing (Republic Day)

§

Differentiated Pricing

Time Pricing

§

Bundling

PRICING COMPARISION

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TIME PRICING

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LOW INTEREST FINANCING

PSYCHOLOGICAL PRICING

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PROMOTION

• “

SAAL KE SABSE SASTE 3 DIN

FUTURE CARD (Discount Upto 3%)

SHAKTI CARD

JUNK SWAP OFFER

BRAND AMBASSADOR: M.S. DHONI

ADVERTISMENT (Print Ads, T.V., Radio)

POINT OF PURCHASE PROMOTION

GIFT TO EVEY 100 th

CUSTOMER (Seasonal)

BANNERS AND POSTERS

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PEOPLE

People Are The Customers Which Are The

Biggest Asset Of A Company.

Well Trained Staff.

Appearance.

Presently Around 10000 Workers Are Working

And Around 500 Workers Are Recruited Every

Month.

High Security For Safety Of Customers.

Problems ahead

Reduction in consumer spending

Slow construction of malls

Difficulty in raising working capital

High rentals

Lowering margins

New emerging competitors

THANK YOU

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