RETAIL GARMENT

INDUSTRY
IN INDIA
(ORGANISED SECTOR)
OVERVIEW
●
Background of retail industry
●
Share of various segments in organized retail

●
Present scenario of the industry in India
●
Major players
●
Key drivers for growth in the sector
●
Retailing formats

●
Process of the industry
●
SWOT analysis
●
Porters five force analysis
●
Conclusion
 What is Retail?
 Retail consists of the sale of goods or merchandise
from a fixed location, such as a department store, 
boutique or kiosk, or by mail, in small or individual
lots for direct consumption by the purchaser.

 In commerce, a "retailer" buys goods or products

 in large quantities from manufacturers or importers
, either directly or through a wholesaler, and then
sells smaller quantities to the end-user. Retail
establishments are often called shops or stores.
Retailers are at the end of the supply chain
 BACKGROUND
The
 Indian retail industry is divided into organised
and unorganised sectors.

Organised
 retailing refers to trading activities
undertaken by licensed retailers, that is those who
are registered for sales tax, income tax etc.

Unorganised retailing, on the other hand, refers to

the traditional formats of low-cost retailing, for
example, the local kirana shops, owner manned
general stores, shops, convenience stores, hand cart
and pavement vendors etc.
 Background(contd….)
 Retail is one of India’s largest industries,
contributing to about 10 per cent of the GDP

 Provides employment to 8 per cent of the nation’s

workforce

 Total sales generated due to retail were 6730

crores in 2009.
 Share of various segments in organised retail

16% clothing textiles and

fashion acessories
Food &Groceries
6% 38% Footwear
Consumer durables
7% Catering food
Furnishing ,furniture
home&office
9% Others

10% 11%
PRESENT INDIAN SCENARIO
 

Apparel retail industry in India varies from region to region

due to difference in culture and traditions and difference in
climatic conditions.

Over 4,000 new modern Outlets in the last 3 years

Over 5,000,000 sq. ft. of mall space under development

The top 3 modern retailers control over 750,000 sq. ft. of

retail space 

Over 400,000 shoppers walk through their doors every

week
(source:Indian Brand Equity foundation)
 Contd….
 The branded apparel market represents the largest source of
growth.

 The apparel market can be broadly segmented as men's wear,

women wear and kids and teen wear segment.

 These mainly include formal,casual,sports and wedding

trousseau in it.
 Contd….
 Nicheforeign retailers are making a beeline for the
Indian market.

 Internationalbrands such as Benneton, Lacoste,

LeviStrauss, Crocodile, Dockers, Lee, Wrangler,
Nike, Reebok, Adidas, Guess, Esprit, Mango, Hugo
Boss, Mark & Spencers and Tommy Hilfiger have
already built a retail presence in the country.

 Thepremium apparel segment in India is valued at

about Rs 1,900 crore and growing at 20 per cent.
 Major players in the industry
Shoppers' Stop
Westside (Trent)
Pantaloon (Big Bazaar)
Lifestyle
RPG Retail (Foodworld, Musicworld)
Crossword
Wills Lifestyle
Globus
Piramals ( Pyramid & Crosswords)
Ebony Retail Holdings Ltd.
Key drivers for growth in the sector
Changing consumer profile and demographics

 Against the backdrop of an ageing world, India

possesses the advantage of having a largely young
population
 The presence of a large number of working
professionals translates into a lucrative customer
base vis a vis other economies.

Economic development
 Has led to an increase in disposable income and
hence customer aspirations.
 Contd….
Increase in number of shopping malls
 increasing urbanization
 credit availability
 improvement in the infrastructure,
 increasing investments in technology and real
estate
 Resulted in building a world class shopping
environment and hence growth in the sector.
 Retailing Format in India
1.Department Store : This represents retail outlets
that stocks a wide range of merchandise. Stores
often provide customers with exclusive
membership cards on purchases up to a certain
value. The major players are Ebony, Globus, Life
Style, Shoper’s Stop and Westside.

2.Super market : They are self service stores which

concentrate on the price aspect to attract
customers like Food Bazaar, Subhiksha and Fab-
mall. Supermarket is a self-service store offering a
range of food and household articles.
 Contd….
3.Hyper market : It is a department store combined with
super market although in India the hyper markets are not
well developed still we have a few players like Reliance
retail, Big Bazaar and a few more.
 The latest to make a big splash in the retail scene is the
Aditya Birla Retail (ABRL), the retail arm of the $24-billion
Aditya Birla Group, which plans to invest between Rs 250
and Rs300 crore for setting up a dozen hypermarkets
under the brand name ‘More Megastore’ in the country.
The group also plans to open ‘Family Stores’ stocking
apparel from Madura Garments, the owner of Louis
Philippe, Van Heusen, Allen Solly and Peter England
brands and also distributes the international brand Esprit
in India.
 Contd…..
4. Discount Store : It is a department store except
that it sells products at a lower price for example
The Loot and My Dollar Store.
5. Specialty Store : They offer a large range of
selections within a single merchandise category for
example the Music World and Planet M.
6. Convenience Store : They stock most essential
and FMCG products like food items and several
products of daily use. The major players are Red
Shop and My Mart. Although world wide they are
open through out the day and night but this is not
so all the palyers within this format in India.
 7.Kiosk : they are small retails outlets which are
open on all sides and sell consumer goods like
edibles and snacks, newspapers and so on.
emphasis is on designing the kiosk façade-that
sport attractrive colour schemes. Some of the
players are Mr. Orange , Cookie Man, Corn Man
,Kidz on Wheelz and so on.
 Process of the industry

Front end
operations Back end operations

Logistics
Merchandising & Marketing
distribution
Store
operations Procure Corporate
purchases services
 Store operations
 Store operations play a critical role in shaping the
customer perceptions towards the store/mall.

 Store operations involve selling, management of

goods flow, store maintenance, customer service
and transaction processing.

 The sales person plays an important role in

technology goods, high value high involvement
goods such as jewellery, watches, etc.

 Customer service includes delivery, repair,

 warranty work and handling of customer returns
 Merchandising

 It involves selecting and displaying of the

assortment of goods to be sold.

 The right mix/kind of merchandise plays an

important role in selection of a particular store by
the customer and is a key differentiating factor.

 It is a dynamic activity which has to be in

resonance with customer trends
 Logistics:

 The infrastructure bottlenecks in India i.e., road

conditions, poor warehousing facilities, are well
documented.

 These bottlenecks add up to the logistics cost both

in terms of time and money.

 Logistics plays an important role for Organised

Retail as the economies of scale are mainly on
account of centralised sourcing systems.
 Marketing:

 Marketing strategies of a firm shape both pulling

the target audience to the store through advertising
and pushing merchandise to the customers through
sales promotion programmes.

 The challenge for Organised Retail is to ensure

both high footfalls and conversion ratio.

 Effective CRM strategies such as loyalty

programmes play an important role in achieving the
aforementioned objectives.
 Purchase:

 Centralised purchasing is important for the organised

retailers to get advantage of their scale of
operations.

 Retailing often involves a number of products and

SKUs which make this task even more difficult.

 Purchasing function has to work in co-ordination with

logistics and merchandising.

 The function also takes care of Vendor selection and

development
 Corporate services
Corporate services are support functions such as
HR,IT and Administration.

IT and HR functions are increasing importance.

IT plays a important role in the efficiency as well

as CRM activities.
 SWOT ANALYSIS
STRENGTHS
 Current Indian population consists of large number
of young people with median age of 24 years. So
they are going to be the key growth drivers
 Low cost of operations

 Abundant availability of skilled labour

 Weaknesses

 Less Conversion level : Despite high footfalls, the

conversion ratio has been very low in the retail outlets in
a mall as compared to the standalone counter parts

 Customer Loyalty: Retail chains are yet to settle down

with the proper merchandise mix for the mall outlets.
Since the stand-alone outlets were established long time
back, so they have stabilized in terms of footfalls &
merchandise mix and thus have a higher customer loyalty
base.
 Opportunities
Potential untapped market

Rural retailing : India's huge rural population has caught the eye of the retailers
looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga"
offering a diverse range of products from FMCG to electronic goods to automobiles,
attempting to provide farmers a one-stop destination for all their needs."

Percolatingdown: The 'retail boom', 85% of which has so far been concentrated in
the metros is beginning to percolate down to these smaller cities and towns. The
contribution of these tier-II cities to total organized retailing sales is expected to
grow to 20-25%.

 
 
 
 
 
 THREATS
Shopping Culture: Shopping culture has not developed
in India as yet. Even now malls are just a place to hang
around with family and friends and largely confined to
window-shopping.

 Inadequate infrastructure
 
Ownership of retail chain is allowed only to the extent
of 49% but without FDI, the sector is deprived of access
to foreign technologies and faster growth
 
Competition from unorganized sector
Porters five force analysis
Buyer power
Moderate
Rivalry
High

Supplier
power
Low

Substitutes
High

New entrants
High
 Increasing power of organised retail
Retailers can increase their power in several ways.
 They can invest efforts in developing their own
store brands.

 Secondly they can invest in supply chain, buy

directly from the sources and eliminate middlemen.

 Thirdly they can attempt to obtain volumes in

buying by aggregating the requirements of various
stores, and bargaining for better prices by placing
large orders.
 Retailers can also obtain several benefits from
using information technology. They can monitor
their stocks and sales using IT and thus manage
their working capital more efficiently.

 They can also analyse data about customers and

their buying habits and be in a position to develop
marketing strategies and promotional offers to
increase customer purchasing at the outlet
 Conclusion

While answering to the question Why Indian

organized apparel retail is at the brink of
revolution? the apparel retail segment in India has
come out with following notes:

(i) Scalable and profitable retail models are well

established in apparel sector
(ii) Rapid evolution of new-age young Indian consumers

(iii) Retails space is no more a constraint for growth

(iv) partnering among brands, retailers, franchisees,

investors and malls

(v) India is on the radar of global retail suppliers. But

domestic retailers in the sector have the advantages in terms
of knowledge of domestic retail and market, low overhead
costs, support from local community and understanding of
domestic politics and economics. However, global retailers
would be ahead of them in supply chain management and
technology.
THANK YOU