Fab Mart
Fab Mart
Fab Mart
Consumption will grow 4x over 2005 2025. Urban India will account for more than two-thirds of this growth as urban household income will grow 3.3x over the same period.
35,913
18,896
16,695
378,170
300,000
250,000
6.1%
2.9%
86,351
115,620
1995
2005E
2015F
2025F
Tier 1
Major cities
Tier 2
Mainstream cities
Tier 3
Climbers
Tier 4
Large towns
8 cities
Population > 4 million
26 cities
Population > 1 million
33 cities
Population > 500,000
33 cities
5,094 towns
* Population for each city estimated using the average urban household size Source: The Great Indian Middle Class, NCAER; MGI India Consumer Demand Model (v1.0); MGI analysis
16(29%)
8(15%)
1,064 (14%)
136
670 (9%)
Tier3 Climbers
Tier3 Climbers
114
Tier3 Climbers
3,009 (39%)
Note: Disposable Income estimated using income distribution of households from NCAER and model estimates of average household income; Figures are rounded to the nearest integer and may not add up to 100% Source: The Great Indian Middle Class, NCAER; MGI India Consumer Demand Model, v1.0; MGI analysis
SUMMARY OF OPPORTUNITY
This leaves a huge unmet demand in serving the needs of affluent customers in smaller towns.
Existing mom-and-pop stores are not able to meet the demands of affluent customers in towns. Organized retail chains are yet to penetrate these towns. Ecommerce is not yet a viable channel given that customers are not tech savvy, psychological barriers and limited infrastructure.
Aspirers
2
3 4
Strivers
Seekers
Globals
Tier 1
Tier 2
Tier 3
Tier 4
COMPETITIVE ANALYSIS
In the target towns E-commerce
Mom & Pop stores The typical mom-and-pop store serving customers in the town Pros: Convenience Trust Instant gratification Large format retail Large format retail stores that are occasionally seen in some tier 3/4 towns Pros: Convenience Trust Instant gratification Variety and deals Cons: Is not present in most of the target towns E-commerce chains such as Flipkart, Myntra etc.
Comments
Pros: Variety and good deals Cons: Various links in the value chain (from a small
town point of view)
are not yet mature i.e. Technology, Logistics, Payments etc., Trust deficit Familiarity with online shopping required No touch-and-feel experience Low-Medium
Comparative
Threat
Low-Medium
Low
High
The Team
Alphonse Reddy Founder & CEO,
12 years industry experience spanning sales, marketing, strategy and finance. BE (BITS, Pilani) and MBA (INSEAD Business School)
Investors/Advisory Team
Hemu Javeri Executive Director, Forum Synergies, a $150m PE fund.
Previously CEO of Madura Garments, Nike and Home Solutions.
Anand Morzaria
Ashish Agarwal