Retail evolution trends & business ppt @ bec doms
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Transcript of Retail evolution trends & business ppt @ bec doms
Retail Evolution, Trends & Business Opportunities in India
India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story
The India Story
• Socialist policies – minimal private sector role
• Bureaucratic
• Protected market
• Small consumer markets
• Underdeveloped infrastructure
• One of the fastest growing economies ; 9%+ growth rate for 5 years prior to current crisis
• Resilient Economy – 5-6% growth at the peak of the global crisis
• Opening up sectors for investment
• Promising consumer markets
• Significant investment in infrastructure development
YESTERDAY
TODAY
• Largest democracy; Stable government.
• Dominant private sector; Increasing
withdrawal of government from business
• Robust banking sector; Capital markets
• World class IT & telecom infrastructure
• A ‘connected economy’; Economic efficiency &
quality of governance
An Enabling Environment
Demographic Dividend
• 2nd largest urban population: 29% of the total (2007)
• Projected to reach 37.8% by 2025.
• To register the largest addition to the working age population in the world by 2010.
• Largest working age population worldwide by 2050.
25
34 37 38
44
0
10
20
30
40
50
Ind
ia
Ch
ina
US
Russia
Jap
an
0-19 yrs41.8%20-59 yrs
50.7%
60yrs & above7.5%
• Enormous consumption force: Large youth population
• Global production force in service:
• Large pool of professionals and technocrats
• Largest pool of English speaking manpower after the US
• Manufacturing force: Labour costs, as a % of value added - one of the lowest among Asian countries.
Growing urban & Working population
Powerful production & consumption forceDemographic Profile
Population Median Age (In Years): 2008E
Present global crisis: An opportunity for India
Indian economy coped with the crisis better; Clear signs of
recovery
• Revised government growth projection for 09-10 at 6.9%; Q2 GDP
growth at 7.9%
• GDP forecast for 2010-11 is 7.9%
• 2010-11 to be a year of consolidation; launch into the high growth
mode
India’s long term strengths still valid
• Growth primarily driven by the strong domestic market.
• Domestic savings rate at more than 35%
• India projected to be the 5th largest consumer market by 2025, worth
over USD 1,500 Bn – CAGR of 7.3% (McKinsey Institute)
Macro Economic Environment Driving the unfinished agenda
Fiscal Balance
Driven by stimulus packages fiscaldeficit currently at 6.8% of GDP.
To be brought down to 3% over 5years
Tax Reforms
Indirect tax: GST roll out by FY11 To overcome the dual tax regime; simplified structure; creating a unified market.
Direct tax: Proposed Direct Tax code aiming at substantial increase in income tax limit
Disinvestment
Plans to dilute 10% in many profit making PSUs
A source of spending in social infrastructure
Social Programs
72% of population in rural areas
35% of govt. spending is towards rural schemes; spend has grown by 45% annually during last 2 yrs.
India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story
Founded in 1976 with an initial capital of $ 1000. Started with small scale manufacturing units
Started manufacturing telephones in technical collaboration with Siemens AGTie-up with Takacom corp., Japan for answering machines in 1986, LG, South Korea for cordless phones & Systema for telephone terminals in 1988
1985
Import of portable power generators from Japan for distribution in India
Formed a Consortium with Vivendi and others to bid for Cellular Licences
1976
Bharti Airtel – First mobile service operator in Delhi Best in class Global partners since beginning - Singapore Telecom, E M Warburg Pincus, USA, British Telecom, UK, Telia, Sweden, New York Life International, Asian Infrastructure Fund(AIF)
1995
1992
1982
Our Beginnings
Bharti AirtelIndia & SAARC Region
Telecom
SeychellesSeychelles IslandsJersey AirtelChannel Islands
Comviva
TechnologiesTelecom software
Bharti AXA Life InsLife Insurance
Bharti RealtyReal Estate
Indus TowersPassive Infra Sharing
Bharti TeletechComm. & Media Devices
Bharti RetailRetail
Guernsey AirtelChannel Islands
Bharti Wal-MartWholesale Cash & Carry
Bharti AXA Gen InsGeneral Insurance
Bharti InfratelPassive Infra
Bharti AXA
Investment
ManagersAsset Management
FieldFresh FoodsAgri Exports
Centum Learning
LtdTraining & Dev
TELECOM
SERVICESFINANCIAL
SERVICES
RETAIL /
WHOLESALE
EMERGING
BUSINESSES
Bharti Foundation CSR activities
Bharti Foundation CSR activities
Our Businesses
TELECOM
SERVICESFINANCIAL
SERVICES
RETAIL /
WHOLESALE
EMERGING
BUSINESSES
Our Partners
Bharti Group: Our Key Differentiators
Transformation• Significant impact on the lives of
people
• Attract and nurture top talent
Innovation• Business model
• Market offering
Focus on
Core
Competence•Outsourcing
•Scalability
Operating
Principles
Partnership•World-class
partnerships
India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story
Rising index of global investor confidence
Rising FDI flow despite conservative global market condition:
Increased to $27.3 Bn in 08-09 from $24.5 Bn. in 2007-08
World Investment Report placed India in top 5 most attractive locations for FDI for 2009-11 alongside China, the US, Brazil, and Russia.
The Top 5 sectors attracting FDI inflows (Apr 2000 – Oct 2009) are: Services ($22 billion) Computer Hardware & Software ($9.4 billion) Telecom ($8.4 billion) Housing & Real Estate ($7.5 billion) Construction ($6.7 billion)
Enabling environment: 100% foreign investment allowed except for sensitive sectors like retail and
insurance
Key emerging sectors in India
InfrastructureStepping up spending; 5% in 2006-07 to 9% of the GDP by end of 2012.
Total investment projected - USD514 billion (2007-2012).
Increasing share of private sector:
• From 20% in total spend in 2002-07 to 30% by 2012
• Successful execution in the PPP mode
• Over 60% private sector contribution in ports, airports and telecom
EducationLargest capitalized space in India with $30 Bn of government spend (3.7% of GDP).
Private education is currently estimated at $50 Bn (14%CAGR over FY08-FY12E); expected to reach $115 Bn in he next 10 years
100% FDI allowed through the automatic route,
Future potential:
• Massive shortfall
• Emerging segments
Health CareGrowth of 9.3% between 2000-2009
Current size is USD 35 billion; Projected to grow 23% per annum to touch $77 billion by 2012
Healthcare facilities to contribute to 70% of the total sector touching a figure of $54.7 billion by 2012.
Investment of $14.4 Bn needed by 2025 to increase its bed density to at least two per thousand population.
Insurance 4th largest insurance market in Asia excluding
Japan.
Rapid growth over years; Life Insurance at 31% CAGR over the last six years, General Insurance at 16% over the last six years
Low penetration with huge potential:
Life insurance was 4% of GDP in 2009 up from 1.7% in 2000
General Insurance was 0.6% of GDP in 2009
Large untapped rural market
India: An Emerging Economic Power
Evaluating New Business Opportunities
Indian Retail: Potential and trends
The Bharti Story
Retail Sector poised for phenomenal growth
Source:India Shopping Trends, 2008 - Technopak
ORGANISED RETAIL EXPECTED TO GROW 35-40% CAGR
The Indian
Retail Sector,
currently the
Fifth largest in
the world, is
poised for
phenomenal
growth in the
coming years
Size & Position in the current Scenario
Current Size & Future growth of Organized Retail in India
The Indian Retail Landscape
Organized retail has grown from USD 2 Bn in 2002 to USD 37 Bn today in a total of USD 350 Bn
Impact on the consumer; low price and assured quality through supply chain efficiency
Impact on producers, farmers; direct sourcing from SME’s and farmers; providing critical connect to market place
Investments in the range of USD 30+ Billion expected by 2011 in Retail and Supply Chain
Scale: Size of organized retail likely to touch USD 70 billion by 2011
Employment: Over 850K direct jobs to be created in Retail in the next 5 years.
Source: India retail report 2009 by Images Retail, CII BCG report on India’s demographic dilemma Dec’08
Key Challenges
Immense ethnic diversity
Absence of Infrastructure and good retail space
Workforce Management (talent crunch)
IT Infrastructure
Supply Chain
Legal
Key Opportunities
Supply Chain Investments
• Setting up logistics and supply chain infrastructure
• Import of know how and logistics techniques from developed retail countries
IT Infrastructure
• IT is the enabler behind communication, collaboration with suppliers, and an efficient supply chain
Manpower
• Potential tie-ups with universities and setting up dedicated retail institutes
• Utilize experience of international retailers to train local talent
Large Rural market
Thank You